Cannabis Weekly Round-Up: Tilray Reports Profitable Quarter, Canada to Set Up Industry Panel

Tilray reports profit, but loses Canadian market share

On Wednesday (April 6), Canadian producer Tilray issued results for its third 2022 fiscal quarter. It reported a net revenue line of C$152 million, representing a 23 percent uptick year-on-year. According to a report from Barrons, analysts expected C$156.2 million in revenue from Tilray for the period.

The company was able to find its way to a profitable quarter this time around, bucking a trend of sizeable losses for Canadian producers. Tilray reported net income of C$52.5 million, and gross profits for Tilray rose approximately 31 percent to a final tally of C$40 million.

CEO Irwin Simon said the company is still set to achieve C$4 billion in revenue by its 2024 fiscal operating year.

The company celebrated the fact that still leads in market share for Canada. However, its portion of the space is shrinking — as reported in its financial results, Tilray has a 10.2 percent share of the Canadian adult marketplace.

A Canadian Press report indicates that in a call with analysts Simon said February was the “lowest” decline in market share the company has seen. In Tilray's financial report, he said he believes the company’s tactics will allow it to regain a stronger leadership position.

“In Canada, we maintained our leading market share position amid intense competition — and believe that our strong capital position, operational excellence and pricing and marketing adjustments will work in concert to help ensure we reclaim share in the coming quarters,” Simon commented.

As far as the trading week went, Tilray’s value jumped right after its promising results came out.

On Wednesday, the company saw an uptick in value of over 10 percent during the trading session; ultimately Tilray closed with an increase of 3.88 percent and a price per share of C$9.10. As of Friday (April 8) at 10:15 a.m. EDT time, the company was down 1.35 percent in value for a price per share of C$8.03.

Canada to set up panel for dialogue with cannabis reps

Canada's new federal budget includes funding for a panel within the Department of Innovation, Science and Economic Development.

The new entity has been tasked with engaging and holding an ongoing discourse with industry insiders, according to BNN Bloomberg. The news is timely as cannabis industry members have been looking for opportunities to advocate for changes in the Canadian market.

Players in the Canadian market have struggled as domestic sales went from promising to very limited in the eyes of investors and analysts, especially in comparison to the US marketplace.

Some financial experts have told the Investing News Network (INN) they are worried about the growing likelihood of bankruptcies and other doom scenarios for struggling cannabis players in Canada.

“The analogy that I would use is that there are 300 passengers on the boat, (but) the boat can only fit 50,” Andrew Udell, a financial expert with popular research group the Cannalysts, told INN in a 2020 interview.

Tilray’s top executive recently said he doesn't want fellow cannabis producers to “blow themselves up” and go out of business. "Look how many jobs we created, look at the tax dollars coming out of all the companies," Simon said.

Cannabis company news

• TerrAscend (CSE:TER,OTCQX:TRSSF)confirmed the opening of its third dispensary in Michigan, done in collaboration with cannabis edibles firm Cookies. Jason Wild, executive chairman of TerrAscend, said Cookies is the most recognized brand in the cannabis industry.

• Aleafia Health (TSX:AH,OTCQX:ALEAF)issued an update on its cost-saving efforts as the firm pursues its net revenue guidance of between $53 million to $63 million. “These organizational realignments helped create a leaner, more nimble workforce optimized to accelerate revenue velocity and maximize margin,” Aleafia Health CEO Tricia Symmes said.

• The Valens Company (NASDAQ:VLNS,TSX:VLNS)released a letter to shareholders addressing the rationale behind its recent nearly US$30 million financing deal. “Companies with innovative products and the financial flexibility to execute against their strategic focus are best positioned to survive these challenges and be the leaders of the industry who will benefit in future years to come,” the letter from CEO Tyler Robson and President Jeff Fallows reads.

• Avicanna (TSX:AVCN,OTCQX:AVCNF)expanded a collaboration agreement with Bio-Gate for the development of cannabis-based cosmetics. The announcement also indicates the launch of a new product line in Europe. Aras Azadian, CEO Avicanna, celebrated the added product availability and the new terms for its partnership with Bio-Gate.