Tilray revenue up 86%, but growth expenses substantially deepen loss

Marco Green
November 14, 2018

The company has entered into eight supply agreements for the Canadian recreational market. (TLRY) are down over 5.5% in early trading on Wednesday following the British Columbia-based company's most recent quarterly earnings report.

However, the price of cannabis could increase in the future because demand is beginning to outstrip supply as Canada and many USA states have legalized marijuana.

Tilray posted revenue up 86% YOY to $10.05 million, just short of the consensus at $10.1, according to FactSet.

The reported a net loss of 8 cents per share, which was narrower than the 12-cent loss expected by the Street. Results included stock-based compensation charges and higher operating expenses. The quarter did not include the impact of Canada's legalization of recreational marijuana, which took effect October 17.

Tilray shares fell 2.3 per cent in extended trading in NY.

The stock had closed 1.7 per cent lower at $111.55 on Tuesday, compared with its initial public offering price of $17.

The higher volume offset the revenue decline from a lower average net selling price, which fell from $9.31 per gram in the same quarter a year ago to $6.21 per gram. Net income came in at C$105.5 million, up from C$3.56 million a year ago, largely because of unrealized gains on securities. The company attributed most of its revenue growth to medical cannabis demand, as opposed to the adult-use market, in which Tilray said it made no sales in Q3, as well as markets outside Canada and sales to other domestic producers. Much of the cannabis sales the three companies reported last quarter came from medicinal marijuana.

Gross margins fell to 31 per cent from 55 per cent a year ago, the company said. Aurora Cannabis Inc.'s average net selling price was $9.19 in the same period.

Tilray, like many of its peers, has been struggling to meet demand in the wake of Canadian pot legalization, which took effect October 17.

"Over the previous year we kept hearing about all this capacity that people were building out and when we went to buy some of that supply, it's just not available, people tended to exaggerate their capacity", he said.

Other reports by Click Lancashire

Discuss This Article