Tilray Brands reported a net loss of US$61.6 million in its most recent quarter as the cannabis company temporarily slowed production due to the “longer-than-expected march to legalization” in some markets.
Among the markets whose timing is hampering the growth of the Leamington, Ontario-based company is the United States, where Tilray “doesn’t [s’attend] not expect legalization to happen at any time in the near future,” its chief executive said Monday.
“In the United States, participation in the recreational cannabis market has always been very important to us and is an integral part of our long-term strategy,” Irwin Simon told analysts on a conference call.
“However, as long as cannabis remains federally illegal in the United States, we will not directly engage in activities that affect the cannabis plant in order to fully optimize the value and strength of our business in the United States. »
Cannabis is legal for medical purposes in approximately 39 states, and it is permitted for recreational use in 19 jurisdictions, including that of the District of Columbia. However, federal law still considers it a Schedule 1 controlled substance with a high risk of abuse, placing it in the same group as harder drugs, such as heroin and LSD, and thus disallowing any use. medical.
But last year, US President Joe Biden revealed he would expunge all cannabis possession convictions under federal law for cannabis possession and review the drug’s status as a Schedule substance. 1.
The United States has also seen discussion around the Safe Banking Act, a Democratic bill with some Republican support that would allow financial institutions to work with cannabis companies without fear of reprisal, and the Marijuana Opportunity Reinvestment and Expungement ( MORE) Act, which would pave the way for federal legalization.
“I am frustrated with the legalization […]nothing has happened in the area of cannabis,” Simon said.
Even so, the mere talk of such measures has sparked enthusiasm from cannabis companies such as Tilray, Canopy Growth and Aurora Cannabis. They have long been buying stakes in American brands in anticipation of the easing of cannabis regulations in the United States and legalization on a federal basis.
A loss at 2e quarter
Tilray posted a second-quarter loss of US$61.6 million on Monday, which compared with a net profit of nearly $5.8 million for the same period a year earlier.
The producer’s loss per share was 11 US cents for the three months ended Nov. 30, compared with net income of zero US cents a year earlier.
Net revenue for the quarter totaled US$144.1 million, down from US$155.2 million in the prior second quarter.
Tilray’s cannabis business generated revenue of US$49.9 million, down from $58.8 million in the second quarter a year earlier, while the distribution business saw revenue slip to 60.2 million, compared to 68.9 million a year earlier.
As for alcoholic beverages, Tilray generated revenues of US$21.4 million, compared to 13.7 million in the previous second quarter. Wellness activities generated revenue of 12.7 million, down from 13.8 million in the same period a year earlier.
Excluding one-time items, Tilray posted an adjusted net loss of US$35.3 million, or 6 cents per share, for its most recent quarter, compared to an adjusted net loss of US$38.8 million, or 8 US cents per share, in the previous second quarter.