Cannabis Weekly Round-Up: Tilray Drops US$4 Billion 2024 Sales Forecast
A leading Canadian cannabis producer has slashed its financial forecast due to market difficulties.
A new report shows a leading Canadian cannabis producer will no longer meet its bold sales target by the end of 2024.
Also this week, Health Canada issued a warning to a cannabis producer after a new product caught the attention of regulators.
Keep reading to find out more cannabis highlights from the past five days.
Tilray no longer sees itself reaching 2024 sales target
Tilray (NASDAQ:TLRY,TSX:TLRY) will not meet its US$4 billion sales forecast by the end of 2024 due to poor market conditions.
According to MJBizDaily, Pablo Zuanic, managing director at Cantor Fitzgerald, told investors in a note that the cannabis producer is facing financial difficulties due to “delayed” cannabis policy reform in the US.
The analyst shared his thoughts following a conversation with the management team of the cannabis producer.
“The $4 billion sales target by the end of (fiscal year) 24 was conditioned upon federal legalization of cannabis in the U.S. — with a projected $100 billion market — as well as adult-use legalization in Germany,” a Tilray spokesperson told MJBizDaily.
Tilray first outlined its ambitious plan back in July 2021. At the time, the firm was bullish on its international opportunities and was hopeful about domestic progress for the industry. Since then, Tilray has lost its leadership position in the Canadian sales market.
The entire cannabis industry is set to face a dangerous 2023, with expected pullbacks in operations and other plans. The segment, particularly in Canada, has already faced severe layoffs and financial difficulties.
Dispute of cannabis edibles THC limits
It appears Aurora Cannabis (NASDAQ:ACB,TSX:ACB) has found itself on the wrong end of Health Canada’s attention.
The national regulator issued a notice targeting specific products for not following the rules for edible items.
The issue lies in an edible item denominated by the producer as “chewable extract.” By attempting to brand it this way, the producer thought it could sidestep the THC limits for edibles.
Called Glitches, the product was created under a sub-brand called Drift and contained 100 milligrams of THC.
“Health Canada has identified edible cannabis products erroneously being classified and marketed as cannabis extract products,” spokesperson Tammy Jarbeau told the Toronto Star. “These non-compliant products do not meet the controls in the Cannabis Act and Cannabis Regulations which serve to mitigate against public health and public safety risks associated with edible cannabis.”
On Aurora’s sales page, the tag for Glitches now shows no products available.
“Health Canada is in the process of working with implicated licence holders to return them into compliance with the Act and its regulations,” Jarbeau added.
An Aurora spokesperson conceded to Health Canada’s regulations. “We respect Health Canada’s oversight and continue to have regular, open dialogue about moving forward,” Michelle Lefler told the Toronto Star.
Cannabis company news
- TerrAscend (CSE:TER,OTCQX:TRSSF)expanded its portfolio of stores by closing a deal worth US$10 million in cash for Allegany Medical Marijuana Dispensary, a store in Cumberland, Maryland.
- Flora Growth (NASDAQ:FLGC)shared new revenue guidance of between US$90 million and US$105 million for its 2023 fiscal year. “Our 2023 forecasted revenue range represents anticipated growth in excess of 100% over last year and highlights our continued momentum, despite a challenging macroeconomic backdrop that has disproportionately impacted the cannabis industry,” Luis Merchan, chairman and CEO of Flora, said.
- High Tide (NASDAQ:HITI,TSXV:HITI)issued its 2022 financial results, reporting a revenue uptick of 97 percent year-on-year to US$356.9 million. However, the company reported a net loss for the entire year worth US$70.8 million. “Considering the challenging macro environment and where our equity value stands today, we have meaningfully slowed down our M&A activity and are primarily looking at smaller, highly accretive bricks-and-mortar opportunities to focus on free cash flow generation from our existing business lines,” Raj Grover, president and CEO of High Tide, said.
- Aleafia Health (TSX:AH,OTCQB:ALEAF)signed a new one year agreement with a European cannabis distribution partner for approximately C$1 million. “The Company is involved in overseas markets because international success leverages both its products and brands, and the addressable European cannabis market is high potential,” said Aleafia CEO Tricia Symmes.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.