As Tilray Brands, Inc. (Nasdaq: TLRY; TSX: TLRY) continues its evolution from a Canadian licensed producer to a global consumer packaged goods company its cannabis sales continue to dip but its alcohol beverage and wellness sales have increased.
On Wednesday, the Canadian cannabis giant published its financial statements for the third fiscal quarter ended Feb. 28 this year and reported a slight decrease in Q3 net revenue by 2 per cent to US$151.9 million from US$155.2 million in the previous quarter.
Revenue from cannabis sales went down by 6 per cent to US$55 million from US$58.8 million in the second quarter. Alcohol revenue went up by 43 per cent to US$19.6 million from $13.7 million last quarter and now makes 13 per cent of the company’s total revenue.
Around 41 per cent of the company’s revenue came from its distribution revenue which contributed US$62.5 million this quarter. Cannabis sales now contribute 36 per cent of total revenue came which is a drop of 2 per cent compared to 38 per cent in the last quarter.
Revenue coming from its wellness operations accounted for 10 per cent of total revenue for a total of US$13.8 million
In the third quarter, adjusted earnings before interest, taxes, depreciation and amortization went down by around 27 per cent to US$10.1 million from US$13.8 million in the second quarter. This is the twelfth time the company achieves a positive adjusted EBITDA.
The company also saw a gross profit increase of 22 per cent to US$39.8 million from US$32.8 million in the last quarter.
Operating expenses in Q3 totalled US$59.6 million a 32 per cent reduction from US$87.5 million in the last quarter.
The company has 10 per cent market share in the Canadian market, according to Hifyre data.
Company stock went down by 8 per cent Thursday to US$6.64 on the NASDAQ Exchange.
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CEO Irwin D. Simon said Tilray Medical has nearly 20 per cent of the German market share with its dried flower, extracts and Dronabinol products. He explained this will leverage the company as Germany and the European Union move towards cannabis legalization. Tilray is the only company supplying the German government with cannabis grown in-country.
Early last month, Tilray announced its alliance with cannabis producer Hexo Corp. (TSX: HEXO) (Nasdaq: HEXO) where Tilray has agreed to acquire US$211 million of senior secured convertible notes that were originally issued by Hexo to HT Investments MA LLC, and acquire a significant equity ownership position in Hexo.
Simon says the transaction provides a path for meaningful future equity ownership of HEXO and facilitates complementary commercial and product innovation while driving production and operations.
“As the global economy re-opens, we are confident that the global cannabis powerhouse at the heart of the Tilray Brands’ value proposition will deliver sustained and tangible shareholder value,” Simon added.
This month, the company’s subsidiary Manitoba Harvest, announced an exclusive partnership with Whole Foods Market to launch the brand’s Hemp+ Matcha and Supergreens powders to be sold at the grocery store locations.
It also announced the launch of Solei Bites which is the first THC edible available in Quebec. Each Solei Bites package contains 5 milligrams of THC and 10 milligrams of CBD.
This February, Tilray consolidated its legacy in-house and Aphria therapeutic cannabis divisions into Tilray Medical.
In January, the company announced its new parent name, Tilray Brands, Inc., saying it wants to evolve from a Canadian cannabis producer to a global consumer packaged goods company.
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