Stock Tilray: Cannabis ‘Blue Chip’ Surges After Profits

Tilray (TLRY) – Get the report from Tilray, Inc. posted solid numbers in its second quarter results. The Canada-based marijuana company surprised Wall Street estimates by report a reversal of the $ 89 million net loss recorded in the same period last year to $ 6 million in net income.

In addition, Tilray increased revenues by 20% from the previous quarter and posted its 11th consecutive quarter of positive earnings before interest, taxes, depreciation and amortization (EBITDA).

According to CEO Irwin Simon, the positive performance in the quarter is due to “high quality and highly sought after CPG cannabis and lifestyle brands”. The success of the company’s distribution and global operations has enabled Tilray to increase sales and profitability while overcoming industry-specific and macro headwinds.

Simon also said, “Our overall performance, outlook and global platform make the Tilray Brands opportunity more compelling than ever, driven by our success as a cannabis and lifestyle. [consumer packaged goods] powerhouse and our relentless focus on creating shareholder value. “

TLRY shares responded by rising as much as 17% after profits.

Figure 1: Tilray Headquarters in Toronto, Canada.

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Tilray plans for global leadership

The company has recently experienced a small loss of market share in Canada. But with 10.8% of the market, it continues to hold the largest share due to the performance of its brand.

Tilray is also the market leader in Germany, with a share of 20%. Germany is considered the largest and most lucrative medical cannabis market in the EU.

The company is not the leader in these countries by chance. Tilray has a bold plan to achieve global leadership in the cannabis industry and has completed acquisitions and mergers, including a merger with Aphria and the acquisition of cannabis company MedMen, which has 29 outlets in seven states. Americans.

Looking to the future, Tilray will have huge opportunities here in the United States once the federal government legalizes cannabis. And in the meantime, it is developing in the spirits sector with the acquisition of Breckenridge Distillery. This should immediately contribute to Tilray’s income.

The opportunity for legalization in the United States

In order to achieve global leadership in the cannabis industry, Tilray has yet to dominate the US market, where it faces numerous regulatory hurdles.

According to In Statista, sales of legal recreational cannabis in the United States are expected to reach approximately $ 25 billion by 2025. And the medical cannabis market will reach more than $ 11 billion by 2024.

Tilray’s own management has confirmed that legalization in the US has taken longer than expected. The election of President Biden had raised high hopes in the industry, but little progress has actually taken place.

If legalized in the US, even taking into account stiff competition from other marijuana companies such as Canopy Growth (CCG) – Get the report from Canopy Growth Corporation, Tilray will be well placed.

It is already well positioned with the acquisition of MedMen and its SweetWater Brewing and Manitoba Harvest brands. And the well-executed distribution and scale-up of Tilray’s brands in the Canadian market has given the company a lot of practice for legalization in the United States.

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