Tilray reports $66 million loss as cannabis sales decline

Cannabis and alcohol company Tilray Brands lost $65.8 million (90 million Canadian dollars) in the first quarter ended Aug. 30 as net revenue declined 9% year-over-year to $153.2 million.

Tilray was hit by volatile currencies in the quarter, which shaved as much as $13.3 million off the company’s sales figure in the June-August period, the Ontario- and New York-headquartered company announced early Friday.

Revenue would have come in at $166.5 million on a constant currency basis, Tilray said.

On a call with stock analysts, CEO Irwin Simon said the company also took a revenue hit from wholesale disruptions in two of Canada’s largest markets.

“With (British Columbia) being on strike and our (wholesale) issue in Ontario … you’ll see those pick up in this quarter and next quarter,” he said.

Regarding U.S. President Joe Biden’s announcement Thursday calling for a review on whether marijuana should remain a Schedule 1 drug, Simon told analysts that “it is important to recognize these initiatives for what they are – relatively modest, but any sign of progress is important at this time.”

“It doesn’t change anything for us that we can own U.S. assets,” he said.

Tilray’s cannabis business fell sharply year-over-year, even though the overall Canadian market grew 18% by consumer sales.

Tilray’s cannabis sales in the quarter were $58.6 million, 17% lower than the same period last year.

Distribution and wellness revenue both fell 10% year-on-year, respectively, to $60.6 million and $13.4 million in the quarter.

The lone bright spot was Tilray’s beverage alcohol business.

Beverage alcohol revenue soars 33% year-over-year to $20.7 million in the first quarter.

By market channel, and compared to the same period last year, sales were:

$6.5 million for Canadian medical cannabis products (-28%).
$58.4 million for Canadian adult-use cannabis products (-16%).
$392,000 for wholesale cannabis products (-77%).
$10.4 million for international cannabis products (+1%).

Executives sounded an optimistic note.

“Tilray Brands’ top and bottom-line results during the first quarter reflect successful realignment of the business to maximize revenue and market share gains across core business segments and geographies,” CEO Simon said in a statement.

“Most notably, we are now the leader in net cannabis revenue worldwide, highlighted by medical cannabis leadership globally and adult-use cannabis market share primacy in Canada.”

On the call with analysts, Simon said Tilray maintained the top position in Canada’s competitive recreational cannabis market in the first quarter, with an 8.5% share nationally.

However, that’s 50% lower than last summer, when Tilray commanded 16% of Canada’s market.

After adjusting for interest, taxes, depreciation and amortization (EBITDA), Tilray reported a positive $13.5 million, which is the 14th straight quarter of positive adjusted EBITDA, according to the company.

Tilray’s shares trade as TLRY on the Nasdaq and Toronto Stock Exchange.

Matt Lamers can be reached at matt.lamers@mjbizdaily.com.

Source: https://mjbizdaily.com/tilray-reports-66-million-loss-as-cannabis-sales-decline/