Tilray Archives - Green Market Report

Debra BorchardtApril 12, 2022
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Tilray Brands Inc. (NASDAQ: TLRY) is leaning into its Hexo Corp. (NASDAQ: HEXO) debt buying with the announcement that it would buy Hexo’s remaining $193 million senior secured convertible note. The deal is expected to close by the end of May 2022. The Note will be amended to include conversion rights at a price of C$0.85 per Hexo Share, which would allow Tilray Brands to acquire a significant equity ownership position in Hexo and participate directly in its growth opportunities.

Irwin D. Simon, Tilray Brands’ Chairman and CEO, said, “We know that winning in Canada means a relentless focus on product innovation and operational excellence. The agreement with Hexo delivers on both fronts as it facilitates collaboration, the sharing of best-practices, and yields quantifiable operating efficiencies between two companies with unparalleled global cannabis expertise. In addition, we believe the timing is right given Hexo’s progress executing its operational turnaround plan that could deliver tangible value to Tilray Brands shareholders upon equity conversion of our investment. We look forward to working with Hexo to deliver on the promise and the potential of this partnership for our shareholders, consumers, and employees.”

Immediately Accretive

Tilray said the purchase is expected to be immediately accretive to the company. The agreement provides that Hexo will pay Tilray Brands an annual fee of $18 million for advisory services with respect to cultivation, operations, and production matters. The terms of the Note, as amended, provided that the Note shall bear interest at a rate of 5% per annum, beginning on the date of transaction closing. In addition, Tilray Brands shall have the flexibility to either be paid the principal amount of the Note plus any accrued interest and payment-in-kind upon the maturity of the Note or, prior to maturity, convert such amount into a substantial ownership position in Hexo. Hexo will not receive any proceeds as a result of Tilray Brands’ purchase of the Note from HTI.

Tilray To the Rescue

Tilray had originally announced in March that it was buying $211 million of the troubled company’s debt. The senior secured convertible notes were issued by Hexo and were held by funds affiliated with HT Investments MA LLC. Tilray said that the notes would be amended to permit Tilray Brands to exercise conversion rights at a price of C$0.90 per Hexo share.

In December, Hexo warned that the company was in trouble. Hexo noted in its filing that “existing funds on hand, when combined with operational cash flow, would not be sufficient to fund the potential Senior Secured Convertible Note redemption payments. Additionally, the ability to fund capex budgets, convertible debt, and other commitments may be at risk due to cash payments towards the Senior Secured Convertible Note. Management is exploring several options to secure the necessary financing, which could include the issuance of new public or private equity or debt instruments, supplemented with operating cash inflows from operations. Subsequent to October 31, 2021, management has resumed the previous at-the-market public offering. Nevertheless, there is no assurance that certain sources of additional future funding will be available to the company or will be available on terms which are acceptable to management.”

 

 

 


Debra BorchardtApril 6, 2022
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Tilray Brands, Inc. (Nasdaq: TLRY) reported financial results for the third fiscal quarter ending February 28, 2022. Tilray‘s ret revenue increased 23% to $152 million during the third quarter from $124 million in the prior-year quarter. However, it fell sequentially from the second quarter’s revenue of $155 million and slightly missed the revenue estimates by roughly $4.7 million. The increase was driven by a 32% growth in cannabis revenue to $55 million, 64% growth in beverage alcohol revenue to $20 million, and wellness revenue of $15 million.

The company also reported a net income of $52 million. and earnings per share of $0.09, which beat estimates by $0.17. However, this net income improvement was almost entirely from a $76M non-cash adjustment to the company’s warrant liability and the future value of convertible debentures(which occurs due to the share price falling). Thus, the $54.7 million of operating losses turned into $5.8M in positive net income.

“Our third quarter results reflect progress and momentum across all of our key business segments and geographies, setting the stage to achieve our target for $4B in revenue by the end of fiscal 2024,” said CEO Irwin D. Simon. “Tilray Medical – which now operates under a cohesive strategy and mission – has a near 20% share in Germany, providing clear benefits in its own right as well as a first-mover advantage that we will leverage as Germany and the EU move towards broader adult-use and medical use legalization. In Canada, we maintained our leading market share position amid intense competition – and believe that our strong capital position, operational excellence and pricing and marketing adjustments will work in concert to help ensure we reclaim share in the coming quarters. This effort will gain further support from the fundamental appeal of our brands and product innovation which, as stores continue re-opening, will resonate powerfully with consumers. In the U.S., our SweetWater Brewing, Breckenridge Distillery, and Manitoba Harvest businesses are profitable, growing and emerging as nationwide, iconic brands with loyal followings that will be home to THC-based products upon U.S. federal legalization.”

Tilray said it maintained its number one leadership position in Canada with a 10.2% cannabis market share driven by its portfolio of adult-use brands, and growth in pre-roll and vape product categories. Cost synergies from Aphria-Tilray combination has achieved on a run-rate basis to date $76 million. The company said it expects to reach the $80 million synergy target by May 31, 2022, five months ahead of schedule, and to generate an additional $20 million in synergies in fiscal 2023.

Mr. Simon continued, “We also continued sourcing and executing strategic and shareholder-friendly transactions that provide value with notable upside. Our most recent example is the proposed agreement to purchase the HEXO senior secured convertible notes, which provides a path for meaningful future equity ownership of HEXO as it executes on its transformation. The proposed HEXO transaction is also expected to facilitate complementary commercial and product innovation and drive production and operating efficiencies. 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.”


Debra BorchardtMarch 3, 2022
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Tilray Brands, Inc.  (Nasdaq: TLRY) is striking up a partnership with Hexo Corp. (Nasdaq: HEXO) by buying $211 million of its debt. The move will bring together Canada’s top two cannabis market share leaders, strengthening their respective positions and setting the stage for increased production efficiencies amid competitive market dynamics. Tilray’s stock was slipping slightly in early trading on the news.

The senior secured convertible notes were issued by Hexo and are currently held by funds affiliated with HT Investments MA LLC. Tilray said that the notes would be amended to permit Tilray Brands to exercise conversion rights at a price of C$0.90 per HEXO Share and acquire a significant equity ownership position in HEXO.

The acquisition of the Notes by Tilray Brands would be immediately accretive to Tilray Brands said the company in a statement. Hexo will not receive any proceeds as a result of Tilray Brands’ proposed purchase of the Notes from HTI.

“We believe this proposed Transaction would be a win-win for Tilray Brands and HEXO as it would launch a strategic partnership between two leading Canadian cannabis producers with complementary brand portfolios,” said Irwin D. Simon, Tilray Brands’ Chairman and CEO. “For us, it provides a path for meaningful future equity ownership of HEXO, and enables us to participate in HEXO’s share price appreciation as it continues to execute on its growth initiatives. We also expect to realize further commercial and production efficiency savings of up to C$50 million within two years, which would be shared equally and would allow us to continue being the leading, low-cost Canadian producer.”

The proposed alliance between Tilray and Hexo is further expected to deliver up to C$50 million of cost synergies, to be shared equally, within two years of the completion of the deal. Both companies have been working together to evaluate cost saving synergies as well as other production efficiencies, including with respect to cultivation and processing services, certain Cannabis 2.0 products, including pre-rolls, beverages and edibles, as well as shared services and procurement.

Troubled Hexo

In December, Hexo warned that the company was in trouble. Hexo noted in its filing that “existing funds on hand, when combined with operational cash flow, would not be sufficient to fund the potential Senior Secured Convertible Note redemption payments. Additionally, the ability to fund capex budgets, convertible debt, and other commitments may be at risk due to cash payments towards the Senior Secured Convertible Note. Management is exploring several options to secure the necessary financing, which could include the issuance of new public or private equity or debt instruments, supplemented with operating cash inflows from operations. Subsequent to October 31, 2021, management has resumed the previous at-the-market public offering. Nevertheless, there is no assurance that certain sources of additional future funding will be available to the company or will be available on terms which are acceptable to management.”


Debra BorchardtFebruary 8, 2022
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Tilray Brands, Inc. (Nasdaq: TLRY) is combining its medical marijuana brands and naming it Tilray Medical. Tilray said it is bringing together the medical divisions from Aphria and Tilray for one global medical platform. Tilray Medical will feature the brands with one strategy, mission, and vision.

“Tilray is the global leader in the advancement of cannabinoid-based medicine, with a focus on providing research-backed medical cannabis products to physicians, pharmacies, and patients,” said Denise Faltischek, Head of International and Chief Strategy Officer. “By unifying the global medical divisions of Tilray and Aphria under a cohesive strategy and mission, Tilray Medical emerges as the premier global supplier of a portfolio of high-quality, effective medical cannabis brands and products for patients in need around the world.” Tilray acquired Aphria and officially closed the deal in May of 2021.

Leaning Into Medical

Tilray has been leaning into the medical marijuana side of the industry. Not long after Tilray acquired Aphria, it launched a value medical line called Symbios. The company said that the new brand was developed to provide a broader product at a better price point. Potency is set to range from 15%-18% and all flower is grown in the same Greenhouse as Aphria-branded flower. Current strains include Nordle, Treasure Island, Sour Kush, Jack Herer, Exodus Cheese, and Grower’s Blend (milled flower).

At the time, Tilray said that the difference between the Aphria flower and Symbios flower was potency. All Aphria flower was hand-selected, hand-packed, and guaranteed to be above 18% potency whereas Symbios’ potency was intended to be slightly lower but priced at a more affordable price-point. The difference between the brand’s oils, which are made in Aphria’s greenhouse facility is that Aphria’s CBD oils are made with full-spectrum oil, meaning it’s as close as you can get to the whole plant in oil form. This means that it contains plant matter, terpenes and some minor cannabinoids, helping to create the “Entourage effect”. Symbios oils, on the other hand, are distillate-based, meaning it’s a pure representation of that specific cannabinoid. Because it’s a purer form of the cannabinoid, most terpenes and minor cannabinoids have been removed.

In January, Tilray announced the expansion of its medical cannabis product offering in Australia and a new medical cannabis e-learning platform for healthcare providers. Denise Faltischek, Head of International and Chief Strategy Officer, said, “Tilray is transforming the industry globally with our highly scalable footprint and portfolio of diverse cannabis products. As medical cannabis demand increases worldwide, we remain committed to providing healthcare professionals and patients with safe and reliable access to the highest-quality medical cannabis products.” Ms. Faltischek continued, “After listening to patient feedback and leveraging learnings from our operations in Germany, we are excited to be introducing new products in Australia that meet consumer needs.”

 


Debra BorchardtJanuary 10, 2022
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Tilray, Inc.  (Nasdaq: TLRY) stock is popping over 11% in early trading as the company turned in a solid earnings report for the second fiscal quarter ending November 30, 2021. As shares were lately trading at $7.25, Tilray reported revenue increasing approximately 20% to $155 million versus last year’s $129 million for the same time period. However, analysts had estimated Tilray would report revenue of roughly $170 million causing the company to miss expectations for the second quarter in a row.

Tilray outlined the increases with a 7% growth in cannabis revenue to $58.8 million, net beverage alcohol revenue of $13.7 million from SweetWater, and wellness segment revenue of $13.8 million from Manitoba Harvest. The net income increased to $6 million from a net loss of $89 million in the previous year’s quarter. The earnings per share came in flat, which did beat analysts’ estimates that ranged from a loss of ($0.08) to a loss of ($0.13.)

The company also noted that the adjusted EBITDA was $13.8 million in the second quarter 2022. This was an 8% growth compared to the preceding prior quarter, and the eleventh consecutive quarter of positive Adjusted EBITDA. Tilray also announced a new parent name, Tilray Brands, Inc., which the company said reflected its evolution from a Canadian LP to a global consumer packaged goods company powerhouse with a market-leading portfolio of cannabis and lifestyle CPG brands.

“Our second-quarter performance reflects notable success building high-quality and highly sought-after cannabis and lifestyle CPG brands which, coupled with our scale, operational excellence, and broad global distribution, enabled us to increase sales and maintain profitability despite sector-specific and macro-economic headwinds, said Chairman and CEO Irwin D. Simon.
U.S. Operations
Tilray also noted that its U.S. operations, SweetWater, which is the 11th largest craft brewer in the nation, and CBD company Manitoba Harvest generate roughly $100 million in revenue and are EBITDA and cash flow positive. The company said it will expand in the near term into CBD adjacencies and THC-based products upon legalization. Tilray said it continues to build its U.S. platform, including through its prior acquisition of a majority of the outstanding senior secured convertible notes of MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) – which marked a critical step towards delivering on its objective of leading the U.S. cannabis market upon federal legalization.

Mr. Simon continued, “Looking at performance highlights across key markets, we maintained our #1 cannabis market share position in Canada – despite market saturation and related competitive challenges — on the strength of our brands and adept pricing and marketing adjustments. Importantly, we believe these adjustments will enable us to aggressively recapture share when the market right-sizes. In Germany – Europe’s largest and most profitable medical cannabis market – our nearly 20% share leads the market. We believe this, coupled with our infrastructure, will also allow us to capture the adult-use market as legalization accelerates under the new coalition government. Turning to the U.S., SweetWater Brewing and Manitoba Harvest continued to invest in product innovation and acquisitions to enhance awareness and distribution. These profitable businesses further provide an opportunity to launch THC-based products upon federal legalization in the U.S. Subsequent to the end of the fiscal quarter, we also expanded our spirits portfolio through the acquisition of Breckenridge Distillery, deepening our presence in the fast-growing spirits sector while also providing an immediate contribution to earnings.”


StaffDecember 8, 2021
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Tilray, Inc. (NASDAQ: TLRY) is buying Breckenridge Distillery, a leading distilled spirits platform located in Breckenridge, Colorado that is widely known for its award-winning bourbon whiskey collection and innovative craft spirits portfolio. Tilray didn’t disclose the price it paid for the company but it did say that the acquisition will be immediately accretive to EBITDA.

The Breckenridge Distillery joins Tilray’s SweetWater Brewing Company as the cornerstones of the company’s beverage alcohol segment and further diversifies its net revenue mix. Breckenridge Distillery is expected to immediately margin accretive by generating adjusted EBITDA margins of approximately 25%.

“Tilray’s strength lies in our ability to identify and significantly expand leading CPG lifestyle brands that resonate powerfully with consumers,” said CEO Irwin D. Simon. “Breckenridge Distillery is an iconic addition to our platform in this respect based on its portfolio of award-winning spirits, passionate consumer engagement, and a strong sales and distribution network. We see tremendous potential for Breckenridge and our existing SweetWater brand to complement each other, expanding their respective reach and driving further profitable growth in our beverage alcohol segment.”
Tilray said in a statement that buying Breckenridge Distillery will help the company create non-alcoholic distilled spirits, including bourbon whisky, that is infused with cannabis. With more than 85% of its revenue generated in Colorado, Tilray said that Breckenridge Distillery has enormous potential to expand its customer base and grow throughout the U.S. as a true national brand. To that end, Tilray said it plans to leverage SweetWater’s existing nationwide infrastructure to accelerate Breckenridge Distillery’s and create new, greatly-expanded consumer awareness and product adoption.

Mr. Simon continued, “More generally, the Breckenridge Distillery transaction is consistent with Tilray’s strategy of leveraging our growing portfolio of U.S. CPG brands to launch THC-based product adjacencies upon federal legalization in the U.S. These significant, diversified revenue streams are key to delivering on our ultimate goal of industry leadership with $4 billion in revenue by the end of the fiscal year 2024.”

Bryan Nolt, Breckenridge Distillery’s Founder and Chief Executive Officer, added, “We are excited to join Tilray and drive revenue growth as part of its global and leading CPG and cannabis-lifestyle platform. The award-winning spirits that have driven our success will unquestionably benefit from access to Tilray’s global distribution network and opportunities to expand into cannabis and edible-related products in the U.S.”


Debra BorchardtOctober 7, 2021
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Tilray, Inc. (Nasdaq: TLRY) reported financial results for the first fiscal quarter ending August 31, 2021 with net revenue increasing 43% to $168 million from $117 million in the same time period in 2020. Tilray missed the average analyst estimate for revenue of $172 million according to Yahoo Finance. Tilray said the increase in revenue was driven by a 38% growth in net cannabis revenue to $70 million, net beverage alcohol revenue of $15 million following the SweetWater acquisition on November 25, 2020, and wellness revenue of $15 million from Manitoba Harvest.

Still, the company reported an increase in the net losses to $34.6 million from last year’s net loss of $21.7 million. The company met the average earnings estimate from analysts which was for a loss of $0.08 per share. The company noted in its earnings statement that it had a cost-saving synergy of $55 million that was achieved on a run-rate basis to date, with actual cash savings close to $20 million. Tilray also said it was on track for at least $80 million in cost savings from the Aphria and Tilray business combination synergies.

“Tilray’s first quarter 2022 results affirm that, amid the paradigm shift towards global cannabis legalization, we are unquestionably executing against two key objectives,” said Irwin D. Simon, Tilray’s Chairman, and Chief Executive Officer. “The first is maximizing near-term profitability through leadership in both higher-margin international medical markets and in Canada, complemented by incremental growth at SweetWater and Manitoba Harvest in the U.S. These efforts are augmented by the cost benefits of our increased scale that we are realizing through our integration process. The tangible results include our tenth consecutive quarter of positive adjusted EBITDA and meaningful net revenue growth despite continued impacts from COVID-19 in Canada as retail cannabis stores only began opening in mid-June.”

Beverage Business

Tilray continues to build out its beverage business, which now accounts for 9% of the company’s revenue. In the U.S., Tilray has a strong consumer packaged goods presence with SweetWater, the 11th largest craft brewer in the nation. In July, SweetWater Brewing Company announced the launch of 420 Imperial IPA, the first line extension of its flagship 420 brands. SweetWater also announced a new Colorado Brewery and the opening of SweetWater Mountain Taphouse at Denver International Airport.

International Business

Tilray noted that 11% of its revenues in the quarter came from the international business which didn’t exist a year ago. It says it is the market leader in Germany with medical cannabis extracts. In July Tilray completed and shipped the first successful EU GMP-certified medical cannabis harvest grown in Germany for German distribution.

Mr. Simon continued, “The second objective is to fully realize the promise and potential of Tilray by capitalizing on the nearly $200 billion global cannabis market opportunity. We believe we are ideally positioned to succeed due to our global consumer-packaged goods expertise and scale, our diverse portfolio of brands, our reputation as a trusted supplier of high-quality cannabis, battle-tested leadership, and a relentless focus on driving sustainable shareholder value. We look forward to accelerating our momentum as we build the leading CPG business in the global cannabis industry.”


Debra BorchardtSeptember 3, 2021
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The saga of the once-promising cannabis company iAnthus (OTC: ITHUF) continues as the company has now turned against its lender (and one-time savior) Gotham Green Partners. The latest move comes just as a New York court dismissed a shareholder lawsuit led by Hi-Med LLC that claimed iAnthus had the money to make its debt payments to Gotham Green but instead defaulted and created a situation that would allow Gotham Green to take the company from shareholders. Green Market Report was able to view the case filed by iAnthus against Gotham Green for this story.

iAnthus Wants Gotham Gone

The new case is filed by current iAnthus CEO Randy Maslow in the Ontario Supreme Court against Gotham Green after the lender asked the court to give it an indefinite amount of time to restructure. When iAnthus didn’t make its debt payments to Gotham Green, the lender moved to take over the company. The problem that the reorganization is facing is that Gotham Green has investments in many of the cannabis companies competing against iAnthus. Several states have restrictions against cross-ownership and so Gotham Green is having trouble getting approvals in many states. States often don’t want one company owning too many licenses in any given area so that there is healthy competition and opportunities for less-funded applicants.

The case stated, “Despite the passage of a further two months, approval is still outstanding from four of the five U.S. state regulators, specifically those in Florida, Maryland, Massachusetts and New York. These states represent over 80% of iAnthus’ storefronts and over 70% of iAnthus’ operational facility space. Their importance is only expected to increase in the coming years.” The original restructuring agreement occurred in July 2020 and gave the company a year to get the approvals. iAnthus also accuses Gotham of causing the delays leaving the company in limbo. The only state that has given its approval is Nevada.

MedMen is specifically mentioned as an issue of cross-ownership problems. The case says that Gotham owns approximately 60% of the MedMen voting shares due to the financing Gotham provided the company. Confusing this situation, even more, is that Tilray (NASDAQ: TLRY) just announced it was buying the majority of the outstanding senior secured convertible notes of MedMen that were originally held by Gotham Green. However, Tilray can’t remain on the Toronto Stock Exchange if it owns a U.S. cannabis company, so it can’t convert the shares until cannabis is federally legal. So,  MedMen and GGP amended the restrictive covenants and extended the debt maturity to 2028, and said claimed it was meant to give MedMen more time execute its strategy, but it also buys Tilray more time. Still, Gotham Green will continue to 0wn 9% of MedMen even after the sale and continue to have a board member.

Gotham has claimed that the pandemic among other things was the reason for the delays. In Florida, Gotham cited the Surfside condominium collapse as a reason as well as vacations.

New Lenders?

Back in 2020, iAnthus was in a cash crunch and convinced shareholders that the only way out was to let its lender take over. Now it seems other lenders are happy to step in and help. The case stated, ” the Company has received at least three unsolicited written offers (and multiple unsolicited telephonic expressions of interest) to recapitalize the Company, all of which would
provide for a full and immediate payment of all principal, interest and fees owing to the Lenders and meaningfully better terms for Existing Shareholders than the 2.75% equity interest
contemplated by the Recapitalization Transaction. The debt repayments contemplated by these offers would result in the Secured Lenders receiving a return on investment of over 15% and the Unsecured Debenture Holders receiving a return on investment of approximately 8%. In addition to the Lenders’ return on their debt instruments, the Secured Lenders and Unsecured Debenture Holders hold approximately 15.9 million warrants and 3.7 million warrants, respectively. ”

Hi-Med Loss

Hi-Med was one of iAnthus’ largest shareholders. It alleged in its case that an escrow account set up by iAnthus to cover interest payments was never tapped. Hi-Med also alleged that there was a conspiracy between iAnthus’ former CEO Hadley Ford and Gotham Green to trigger a default.  On April 6, 2020, iAnthus announced it had defaulted on $4.4 million in interest payments to the private equity firm Gotham Green Partners because of the coronavirus pandemic, as well as a decline in cannabis markets overall. The investors said there was an escrow of more than $5.7 million to pay one year’s interest on the 2018 debentures in the event of an iAnthus default. That agreement was amended in September to provide an additional $20 million to iAnthus, according to court documents.

The loss though hinged on the definition of the shares being traded. The investor’s case said that the iAnthus’ shares they bought are listed on the Canadian Stock Exchange and also trade in the U.S. on the OTCQX market. However, the Judge overseeing the case said that the OTC didn’t qualify as an exchange transaction. Still, Hi-Med was given until September 30 to file amended complaints.

iAnthus Gets Stronger

Since the cash crunch of 2019, iAnthus has continued to operate and get stronger by the quarter. iAnthus has reported $227 million in revenue (representing 110% growth) and positive adjusted EBITDA in the five publicly reported quarters since it defaulted in April 2020. Last month the company reported its financial results for the quarter ending June with revenue increasing 57% to $54.2 million. The company trimmed its net losses to $15.3 million, or a loss of $0.09 per share, versus a loss of $24.8 million, or a loss of $0.14 per share, in the same quarter in the prior year.

 


Debra BorchardtJuly 28, 2021
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Tilray, Inc. (Nasdaq: TLRY) reported financial results for the full fiscal year and fourth quarter ending May 31, 2021. In the fourth quarter, net revenue increased 25% to $142.2 million from $113.5 million for the same time period last year. Cowen & Co. had estimated revenue to be $163 million for the quarter making this a fairly large earnings miss. Investors though seemed pleased with the results as the stock was trading higher by over 10% in early trading to lately sell at $14. Cowen’s price target is $23.

Tilray said the increase was driven by 36% growth in net cannabis revenue to $53.7 million, which included four weeks of contribution from legacy-Tilray, a 10% decline in distribution revenue, net beverage alcohol revenue of $15.9 million following the SweetWater acquisition on November 25, 2020, and wellness revenue of $5.8 million from Manitoba Harvest. The net income of $33.6 million during the fourth quarter was a big improvement over last year’s net loss of $84.3 million.

Full Year Results

Tilray reported that its fiscal 2021 full-year net revenue increased 27% to $513.1 million from $405.3 million in 2020. This also missed the Cowen & Co. estimate for a full fiscal year of revenue at $685 million. The company said the increase was driven by 55% growth in net cannabis revenue to $201.4 million, which included four weeks of contribution from legacy-Tilray, 1% growth in distribution revenue to $277.3 million, net beverage alcohol revenue of $28.6 million following the SweetWater acquisition on November 25, 2020, and wellness revenue of $5.8 million from Manitoba Harvest due to the Tilray reverse acquisition on April 30, 2021. The net loss of $336.0 million in 2021 was much higher than the net loss of $100.8 million in 2020. The company said this was driven by $63.6 million of transaction costs related to out-of-pocket fees to consummate the business combinations and $170.5 million of non-cash unrealized loss on our convertible debentures.

“Early results from the new Tilray affirm that, while the global cannabis market remains in its early stages, our vision, scale, access to resources, and operational excellence position us optimally to capitalize on the opportunity,” said Irwin D. Simon, Tilray’s Chairman and Chief Executive Officer. “In a very short period of time since our business combination was finalized, we transformed and strengthened Tilray, delivered solid results amid continued COVID-19 lockdowns and restrictions, and achieved $35 million in synergies to date – well on our way to delivering $80 million in cost savings over the next 16 months.”

Since the Quarter Ended

The company has made progress with its SweetWater brand. In July, it announced the launch of 420 Imperial IPA, the first line extension off of its flagship 420 brand. The company also announced its West Coast expansion including a new Colorado Brewery and the opening of SweetWater Mountain Taphouse at Denver International Airport. In June, the company announced the first cross-brand product collaboration between Canadian craft-cannabis brand Broken Coast and SweetWater to launch U.S. distribution of “Broken Coast BC Lager” and introduce the cannabis brand to consumers across the country.

Tilray completed and shipped its first successful EU GMP-certified medical cannabis harvest grown in Germany for German distribution. In Canada, Tilray launched its new medical cannabis brand, Symbios. Symbios is the inaugural brand from the ‘new’ Tilray developed to offer patients a broader spectrum of medical cannabis formats and cannabinoid ratios at a better price point.

Looking Ahead

Looking ahead, Tilray said it expects to deliver significant cost synergies totaling approximately $80 million within eighteen months of closing the Aphria Tilray business combination and plans to achieve cost synergies in the key areas of cultivation and production, cannabis and product purchasing, sales, and marketing, and corporate expenses. To date, Tilray said it has achieved $35 million in synergies.


Debra BorchardtJune 29, 2021
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Tilray, Inc. (NASDAQ: TLRY) distributed a proxy statement, which included an open letter to shareholders from CEO Irwin Simon. The company wants to increase the number of authorized shares of common stock, so that it may use its stock to acquire and finance attractive businesses that Tilray says will help it grow and create value for stockholders. Tilray is also asking stockholders to approve certain amendments and modifications to Tilray’s organizational documents to provide for increased shareholder rights.

The proposals are to be voted on at the Special Meeting of Tilray stockholders, scheduled for July 29, 2021. the company currently has 446 million shares outstanding and a market cap of over $8 billion. The company also has $425 million in cash on hand.

So far, it seems shareholders don’t mind the plan. Shares were trading slightly higher in early trading. The cannabis industry has had a busy year for mergers and acquisitions. According to Viridian Capital, they have tracked 156 transactions year-to-date in 2021, compared to 35 in the same period last year. Public companies were the buyers in 83% of 2021 deals YTD compared to 91% in 2020.

The text of the letter is as follows:

Dear Fellow Shareholders,

We need your help to ensure Tilray grows – and to ensure YOU are able to participate in our success in a meaningful, constructive manner. Please take a few minutes to read this letter, the accompanying materials detailed in the proxy, and then submit your vote online, by telephone, or mail.

Through our recent combination with Aphria Inc., we have ushered in a new era for the global cannabis industry. We now have the largest geographic footprint and leading cannabis-focused portfolio of consumer-packaged goods in the world.

We Have Substantial Growth Opportunities Ahead and We Need Your Support: To go from potential to performance, however, we need your help. Specifically, we will be addressing two important matters at the upcoming Special Meeting of Shareholders, both of which will be critical to driving value for our Shareholders. If you are a Shareholder of record as of June 22, 2021, you have the opportunity to vote on these proposals, which include:

  • Authorized Shares Proposal – Help Tilray Grow: This proposal would authorize additional shares of our common stock so that we can move quickly to accelerate growth through potential acquisition and financing opportunities. Importantly, approval does not mean that the authorized shares will be issued, only that they are available if needed in pursuit of these important corporate initiatives to drive shareholder value.
  • Governance Proposals – Expand Your Rights: Following the combination of Tilray and Aphria, our Board undertook a comprehensive review of our corporate governance, taking into consideration the views held by the investment community on important matters of governance. As a result, the Board is proposing to expand the rights of our Shareholders; but to do so, we need your approval on several amendments to our organizational documents.

 


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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