Cannabis Weekly Round-Up: Tilray Posts US$61.6 Million Loss

Tilray reports quarterly loss, loses top pick status

The Canadian cannabis market continues to struggle, with a leading publicly traded company posting a severe loss.

On Monday (January 9), Tilray Brands (NASDAQ:TLRY,TSX:TLRY) shared results for the second quarter of its 2023 fiscal year, reporting a quarterly net loss of US$61.6 million, or US$0.11 per share, for the period ended November 30, 2022.

In the same quarter last year, the firm reported a net income line of US$5.8 million.

In a call with analysts, Tilray CEO Irwin Simon expressed annoyance at the lack of progress in US cannabis reform, which he believes could unlock the American market for Canadian operators such as Tilray. "I'm frustrated that legalization, whether it's SAFE Bank, whether it's MORE Act, whether it's descheduling — nothing has happened within cannabis," he said.

Additionally, the executive speculated that progress for adult cannabis sales in Germany, another market Tilray is interested in, would be moving faster were it not for the current conflict in Europe.

"I'm sure if Ukraine didn't happen, Germany might be legal today, but we're ready and will be ready," he said.

Tilray's loss was noticed by market participants — BNN Bloomberg reported that the top cannabis analyst at CIBC's (TSX:CM) investment arm has changed his top cannabis pick from Tilray to Village Farms International (NASDAQ:VFF).

Recently, Charles Taerk, president and CEO of Faircourt Asset Management, told the Investing News Network that Village Farms is his top pick for cannabis growers in Canada because of its agricultural know-how.

Simon noted that Tilray continues to work on streamlining activities. “We are close to achieving our increased annualized cost savings target of US$130 million, consistent with our commitment to building a lean, efficient, and dynamic business that will realize tangible and immediate benefits as the market improves,” he said.

Connecticut launches recreational cannabis sales

The state of Connecticut opened its doors to recreational cannabis sales this past week. On Tuesday (January 10), legal sales of adult-use cannabis products officially kicked off with 40 dispensaries in the state.

State regulators celebrated the launch, which brought US$251,276 in sales and a “smooth” process in stores, according to a tweet from the Connecticut Department of Consumer Protection (DCP).

“We have had no reported issues at any of our retailers, and we are proud of the successful launch of the regulated adult-use market,” Michelle H. Seagull, commissioner of the DCP, said.

In statements, a few cannabis operators celebrated the opening of the Connecticut market.

“We expect Connecticut will be a booming adult-use market,” Peter Caldini, CEO of Acreage Holdings (CSE:ACRG.A.U,OTCQX:ACRHF), said.

For his part, Matt Darin, CEO of Curaleaf (CSE:CURA,OTCQX:CURLF), commended the governor of Connecticut, Ned Lamont, for his leadership in getting the state’s cannabis policies to where they are now.

A forecast from cannabis data researcher Headset indicates that the state’s adult-use market is set to produce US$215 million in revenue during its first year of operation.

Cannabis company news

• Delta 9 Cannabis (TSX:DN,OTCQX:DLTNF) will attempt to save between C$3 million and C$4 million. According to the firm, 40 employees at its Winnipeg facility will face “a temporary layoff” as output in the facility will drop 40 percent. “This was a very difficult decision, but it is a key component of executing on our strategic plan and one we believe best positions Delta 9 for profitable growth,” CEO John Arbuthnot said.

• Jushi Holdings (CSE:JUSH,OTCQX:JUSHF) confirmed significant management turnover with the appointment of Michelle Mosier as CFO, as well as the resignation of Leonardo Garcia-Berg as chief operations officer.

• Akerna (NASDAQ:KERN) sold its Cannabis 365 software platform to 365 Holdco for approximately US$2.8 million.

• Cannara Biotech (TSXV:LOVE,OTCQB:LOVFF) proposed the consolidation of all its issued and outstanding common shares. The proposal will be up to approval from investors, who are set to meet on January 25.