Tilray Archives - Page 2 of 7 - Green Market Report

Debra BorchardtOctober 7, 2021


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


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


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


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.


Debra BorchardtJune 8, 2021


Tilray, Inc. (NASDAQ: TLRY) is launching a new medical marijuana product called Symbios. The company said that the new brand was developed to provide a broader product at a better price point. Potency will 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).

Tilray said that the difference between the Aphria flower and Symbios flower is potency. All Aphria flower is hand-selected, hand-packed and guaranteed to be above 18% potency whereas Symbios’ potency will 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.

Irwin D. Simon, Tilray’s Chief Executive Officer, said, “Medical cannabis innovation and patient care are core to the new Tilray’s business and global growth strategy. As we look ahead, we remain focused on building momentum across our three medical brands – Symbios, Aphria, and Tilray — while meeting the large and growing demand for new, high-quality cannabis products that promote health, wellness, and wellbeing.”

In addition to launching Symbios, Tilray also announced new high-potency, medical cannabis topicals under the Aphria brand designed to target inflammatory joint disease by regulating tissue inflammation when applied topically to the skin. They are made from a vegan and cruelty-free cream formulation and include CBD 750 (containing 750mg of CBD) and Balance 750 (containing 375mg of THC and 375mg of CBD).

Jim Meiers, President, Tilray Canada, added, “Symbios and our new Aphria topical treatments are exciting new additions to our medical portfolio in Canada, providing our patients with a broader selection of unique product formats to meet their needs and preferences. Our industry is only in the early stages of creating and bringing to market cannabinoid medicine options that meet patient needs. We are committed to building our leadership position in Canada now and into the future.”

Symbios and Aphria’s new high-potency topicals join a range of other products, including cannabis oils, soft gels, oral sprays, whole dried flower, and vapes that are now available to all medical patients through the Aphria online medical patient portal.

Debra BorchardtMay 3, 2021


Tilray, Inc. and Aphria Inc. have officially completed the previously announced merger. The combined company, which will be known as Tilray, is considered to be the leading cannabis-focused consumer packaged goods company with the largest global geographic footprint in the industryThe combined company had a market cap of approximately $8.2 billion based on the closing stock prices on April 30, 2021.

“Our focus now turns to execution on our highest return priorities including business integration and accelerating our global growth strategy,” said Irwin D. Simon, the company’s Chairman and Chief Executive Officer. “Covid-19 related lockdowns have presented unique challenges across Canadian and German markets. As these markets begin to re-open, Tilray is poised to strike and transform the industry with our highly scalable operational footprint, a curated portfolio of diverse medical and adult-use cannabis brands and products, a multi-continent distribution network, and a robust capital structure to fund our global expansion strategy and deliver sustained profitability and long-term value for our stakeholders.”

The new Tilray logo blends both Aphria and legacy Tilray’s branding into a design that reflects the new company’s growing portfolio of brands across cannabis-lifestyle and wellness product categories, including medical, adult-use, hemp foods, and beverages. The continued use of “Tilray” as the Company’s name evokes hard work and hope – til shortened from tilling the soil and ray as in a ray of sunshine. Tilray is a pioneer navigating toward the end of prohibition and built to deliver on the collective wellbeing of the company’s employees, consumers, patients, partners, and local communities.

Share Transaction

Tilray’s class 2 common stock will continue to trade on the Nasdaq Global Select Exchange (NDAQ) under the ticker symbol “TLRY” and will begin trading on the Toronto Stock Exchange under the ticker symbol “TLRY” on May 5, 2021. Each Aphria shareholder received 0.8381 of a Tilray Share for each Aphria common share held on April 30, 2021, the effective time of the transaction. Existing shareholders of Tilray will continue to hold their Tilray shares with no adjustment as a result of the transaction.

The senior management team will now be the following:

  • Irwin D. Simon, Chairman and Chief Executive Officer
  • Carl Merton, Chief Financial Officer
  • Denise Faltischek, Head of International and Chief Strategy Officer
  • Jim Meiers, President, Canada
  • Jared Simon, President, Manitoba Harvest and Tilray Wellness
  • Rita Seguin, Chief Human Resources Officer
  • Dara Redler, Interim Chief Legal Officer and Corporate Secretary
  • Berrin Noorata, Chief Corporate Affairs Officer
  • Lloyd Brathwaite, Chief Information Officer
  • Freddy Bensch, Chief Executive Officer, SweetWater

Mr. Simon continued, “Our global team is laser-focused on turning potential into performance and addressing consumer and patient needs for safe, innovative, and high-quality products. We are eager to get to work and want to thank both the Aphria and the Tilray Boards of Directors and especially Brendan Kennedy for his spirit of partnership and irrepressible belief in the art of ‘what’s possible.’ We will benefit enormously from his legacy and continued service on the Tilray Board.”

Debra BorchardtApril 12, 2021


Aphria Inc.  (NASDAQ: APHA) stock was getting slammed in early trading after the company reported that revenue dropped versus the last quarter and reported a whopping net loss of $361 million. In addition to that, Aphria missed analysts’ estimates for earnings and revenues. Shares slid over 9% to sell at $14.70.

Aphria delivered its financial results for the third quarter ending February 28, 2021 in Canadian dollars with net revenue increasing 6.4% to $153.6 million versus $144.4 million for the same period last year. However, revenue fell sequentially by 4.3% versus the second-quarter net revenue of $160.5 million. It also missed estimates by roughly $9 million. The company blamed the decline on a decrease in net cannabis and distribution revenue, which was partially offset by an increase in net beverage alcohol revenue from the acquisition of SweetWater.

Aphria also reported a net loss for the third quarter of $361.0 million, or a loss of $1.14 per share versus a net loss of $120.6 million, or a loss of $0.42 per share in the second quarter. This missed the analyst’s estimate by $1.09.  Last year in the third quarter Aphria posted a net income of $5.7 million, or earnings $0.02 per share. The company said that on an adjusted basis excluding the impacts of the items noted that it actually recorded a net loss for the third quarter of the fiscal year 2021 of $47.9 million, or a loss of $0.15 per share.

“The duration and impact of lockdowns across many of the regions we operate in, particularly in Canada, were greater than we initially anticipated for the cannabis industry and our business; however, we believe Aphria remains well-positioned with our leading brands and market share to experience a robust increase in our top-line as the market improves,” said Irwin D. Simon, Chairman, and Chief Executive Officer. “In the U.S., we had a solid first full quarter of contribution from SweetWater even with lower on-premise sales compared to the prior-year quarter as many foodservice industry establishments were still operating with limited capacity. Going forward, we are excited about the strategic opportunities for incremental growth as we look to parlay our branded consumer products into additional complementary product offerings in Canada, the U.S., and internationally.”

Covid & Falling Prices

The pandemic continues to weigh on the company. Aphria said that it had to lower its inventory levels due to lockdowns.  Aphria said it believes this is a transitory reduction in demand during the quarter.  “These provincial government measures resulted in decreased orders from provincial boards and product returns of approximately $5.0 million. The Company mitigated a portion of the product return by finding alternative distribution channels for some of the products but experienced a reduction in net cannabis revenue as a result of $4.1 million.”

The company also noted that the average retail selling price of medical cannabis, before excise tax, decreased to $6.69 per gram in the quarter, compared to $6.96 per gram in the prior quarter. In a statement, Aphria said that the decline was a result of specific pricing programs offered to assist patients in need who have been negatively impacted by the COVID-19 pandemic, along with other promotional programs. The average selling price of adult-use cannabis, before excise tax, decreased to $3.82 per gram in the quarter, compared to $4.29 per gram in the prior quarter, primarily due to consumer trends towards the purchase of large-format and price compression in the market.

Mr. Simon continued, “We remain excited with the opportunities created for both Aphria shareholders and Tilray stockholders in completing our proposed business combination with Tilray, and believe that together, we will create one of the strongest global cannabis and consumer packaged goods companies in the world.  We expect to have a tremendous runway for long-term sustainable growth as we build upon our existing foundation in Canada and internationally by increasing the scale of our global operations. We expect Aphria and Tilray’s complementary cultures of innovation, brand development, and cultivation to further set us apart from others in the industry along with the strength of our balance sheet and cash availability as we enhance value for all stakeholders.”

In December Aphria and Tilray announced that the two companies would be merging. Aphria shareholders will receive 0.8381 shares of Tilray’s for each Aphria stock they own. Aphria will own about 62% of the combined company, however, the merged company will supposedly be known under the Tilray name and would trade with the TLRY stock ticker. In November, Tilray reported that its total revenue for the third quarter was flat at $51.4 million and up 2.0% sequentially.

Debra BorchardtFebruary 18, 2021

Tilray, Inc. (Nasdaq: TLRY) reported financial results for the full fiscal year and fourth quarter ended December 31, 202 following the close of the market on Wednesday.
The company said that total revenue increased 20.5% to $56.6 million versus the fourth quarter of 2019. Cannabis segment revenue increased 46% to $41.2 million, mainly driven by the acceleration of International Medical sales (+191%) and Canadian Adult-Use sales (+49%). Canadian medical sales grew 26% and there were no bulk sales to other licensed producers.
The company also delivered a net loss of $(3.0) million, or $(0.02) per share versus the net loss of $(219.8) million, or $(2.14) per share, in the fourth quarter of 2019 and a net loss of $(2.3) million, or $(0.02) per share in the third quarter of 2020. With sales jumping about 46%, driven by international demand, which increased by 191%, Tilray posted a better-than-expected loss of 2 cents per share, which stands in stark contrast to the $2.14 loss at the same time last year.”
Brenda O’Farrell, senior analyst at Investing.com said, “With Tilray poised to become the biggest cannabis company in the world since announcing its merger with Aphria in December, all eyes in the sector were on the company’s fourth-quarter earnings unveiled after the close on Wednesday. And the company did not disappoint. In fact, it offered a stellar performance, beating analyst estimates, while showcasing its international reach.”
The company said that the average cannabis net selling price per gram increased to $5.97(C$7.99) compared to $1.88 (C$2.52) in the fourth quarter of 2019 and decreased from $6.15 (C$8.15) in the third quarter of 2020. Tilray attributed the increase versus 2019 to a continued shift in distribution channels and product mix, including growth in International Medical sales, a shift in sales to higher potency and higher-priced products in the Adult-Use market, and the continued growth of Cannabis 2.0 products in Canada. The decrease from the third quarter of 2020 was due to the accelerated sales growth of cannabis flower products in the Canadian Adult-Use channel during the fourth quarter of 2020.
“Over the course of 2020, and despite COVID-19 related challenges, we transformed and strengthened Tilray, delivered solid full year results, significantly reduced net loss, and achieved our stated goal of delivering break even or positive Adjusted EBITDA in Q4 2020,” said Brendan Kennedy, Tilray’s Chief Executive Officer. “We did so by generating meaningful revenue growth across our core businesses, particularly international medical and Canadian adult-use in Q4, and reducing costs by $57 million on an annualized basis compared to Q4 of 2019. As a result, we now operate with a more focused, efficient and competitive cost structure. We also strengthened our balance sheet and positioned Tilray for growth and success in the future in combination with Aphria.”

Full Year 2020

The company reported that total revenue increased 26% to $210.5 (C$281.9) million during 2020 from $167.0 million in 2019. The increase was driven by $26.5 million or 25% growth in the Cannabis segment, and $17.0 million or 28% growth in the Hemp segment. The Hemp segment increase was partially due to the timing of the Manitoba Harvest acquisition in 2019 which resulted in 10 months of sales in 2019 compared to 12 months in 2020.

The net loss for the year decreased to $(271.1) million, or $(2.15) per share, compared to $(321.2) million or $(3.20) per share in 2019 largely due to the cost optimization measures undertaken during 2020. “In 2020, we recorded non-cash impairment charges of $61.1 million and $38.4 million of inventory valuation adjustments, as well as a non-cash charge of $100.3 million related to warrant valuations, partially offset by non-cash gains on debt conversion of $(61.1) million.”

O’Farrell went on to say, “As the cannabis sector overall continues to find its footing, one of the big questions the industry is wrestling with is: Is bigger better? Well, Tilray’s results are taking the guesswork out of that query. And investors were quick to notice. Tilray shares shot up more than 10% in after-hours trading. And although one quarter doesn’t make a trend, the winds are in the sector’s sails, as optimism linked to U.S. federal legalization continues to blow.”

Piper Sandler analyst Michael Lavery cut his Tilray rating (TLRY) to neutral from overweight citing the unlikelihood of further upside given the current valuation. The stock was lately trading at $31 far from its 52-week high of $67. Still, the analyst raised his price target from $15 to $26. Lavery said he believes that the merger with Aphria will improve profitability, deal synergies, and lead to an increase in higher-margin international sales. But he expressed concern that it could still be a year or two before marijuana is legally allowed on a federal level in the U.S. “and there is still little visibility on THC’s plan to enter U.S. THC markets.”


Debra BorchardtDecember 17, 2020


Stifel analyst Andrew Carter has downgraded Aphria (NASDAQ: APHA) from Buy to Hold and upgraded Tilray (NASDAQ: TLRY) from Sell to Hold following the announcement of the company’s merger. In the merger agreement, Aphria shareholders will receive 0.8381 shares of Tilray’s for each Aphria stock they own. Aphria will own about 62% of the combined company, however, the merged company will supposedly be known under the Tilray name and would trade with the TLRY stock ticker.

He said that the merger with Tilray offers compelling long-term potential but limited near-term upside. He raised the target price from C$8.25 to C$9.90 for Aphria based on the company’s 62% of the new combined company.

“We are taking a positive approach to this merger given the long-term potential. But pursuing this merger attracts scrutiny,” he wrote in his note. “Aphria has successfully achieved a leadership position in the Canadian adult-use market organically, and we question the opportunity cost of capital/management bandwidth for undertaking this acquisition. We believe the shares are likely to remain in a holding pattern over the near-term as investors gain confidence with the combined platform’s long-term potential. Against the incremental contribution, we are reducing our revenue estimates for the distribution business assuming the 1Q21 run-rate of C$82 million as the appropriate run-rate going forward. With our outlook suggesting discount will be a more fulsome percentage of sales, our estimates consider a higher level of excise taxes pressuring both net sales and EBITDA.”

Tilray’s price target was raised to $9.20 from $5. He wrote, “We believe Tilray offers a difficult case for standalone value creation with Tilray not showcasing, in our view, an enduring right-to-win for new market opportunities particularly in the U.S. with the increasing competitiveness of the Canadian market likely challenging the company’s ability to offer a profitable template for investors. We believe Tilray is contending with underappreciated liabilities and liquidity needs that would otherwise challenge the company’s ability to drive investor enthusiasm. But this merger provides Tilray shareholders participation in a platform offering truly impressive growth potential with the initial announcement suggesting a 23% premium to Tilray’s December 15th closing price.”

Carter believes the combined company will generate $890 million in combined 2021 net revenue with cannabis sales approaching $500 million with the combined portfolio offering mid-teens revenue growth and a combined margin profile comparing well with traditional consumer assets (~20% EBITDA margin).

“While we believe the combined platform will offer investors an impressive growth profile and a well-positioned vehicle for capitalizing on the growth of the global cannabis category, we believe the prevailing valuation fully considers the platform’s potential with the focus now on successfully completing a complex integration,” he said in his research report.


Debra BorchardtDecember 16, 2020


Aphria (APHA) and Tilray (TLRY) have announced the two companies would be merging. Aphria shareholders will receive 0.8381 shares of Tilray’s for each Aphria stock they own. Aphria will own about 62% of the combined company, however, the merged company will supposedly be known under the Tilray name and would trade with the TLRY stock ticker. Both stocks moved higher on the news, which neither company has commented on.

The combined revenue of the two companies would be approximately $685 million, making it the largest in terms of sales, but the combined market cap is still lower than competitor Canopy Growth (NASDAQ: CGC). Aphria said in a statement that the implied pro forma equity value of the Combined Company is approximately C$5.0 billion (US$3.9 billion), based on the share price of Aphria and Tilray at the close of the market on December 15, 2020. Aphria’s current Chairman and Chief Executive Officer, Irwin D. Simon, will lead the Combined Company as Chairman and Chief Executive Officer. The board of directors will consist of nine members, seven of which, including Mr. Simon, are current Aphria directors and two of which will be from Tilray, including Brendan Kennedy, and one of which is to be designated.

“This is an exciting day for both companies including our 2,500 employees, for the cannabis industry, and for patients and consumers around the world.  We are bringing together two world-class companies that share a culture of innovation, brand development and cultivation to enhance our Canadian, U.S., and international scale as we pursue opportunities for accelerated growth with the strength and flexibility of our balance sheet and access to capital,” said Mr. Simon. “Our highly complementary businesses create a combined company with a leading branded product portfolio, including the most comprehensive Cannabis 2.0 product offerings for patients and consumers, along with significant synergies across our operations in Canada, Europe, and the United States.  Our business combination with Tilray aligns with our strategic focus and emphasis on our highest return priorities as we strive to generate value for all stakeholders.”

Tilray’s Sales Have Been Disappointing

In November, Tilray reported that its total revenue for the third quarter was flat at $51.4 million and up 2.0% sequentially. The company attributed the disappointing results to the discontinuation of bulk sales and a slight decrease in Canada medical sales which caused cannabis segment revenue to fall by 11% to $31.4 million. Total cannabis kilogram equivalents sold decreased 53% to 5,107 kilograms from 10,848 kilograms in the prior year’s third quarter. Adult-Use and International Medical sales grew 26% and 42%, respectively. Excluding the year-over-year impact related to bulk sales, total cannabis revenue increased by 24%. Hemp segment revenue increased 28% to $20.0 million (C$26.5 million).

Mr. Kennedy, Tilray’s Chief Executive Officer added, “We are thrilled to bring together two cannabis industry leaders. At this nascent stage of development and expansion of the global cannabis market, we believe companies with leading geographic scale, product range and brand expertise are most likely to benefit long-term.  By leveraging our combined strengths and capabilities, we expect to be able to meet the needs of consumers more effectively all over the world and advance patient care. With a strong financial profile, low-cost production, leading brands, distribution network and unique partnerships, we believe the Combined Company will be well-positioned to deliver sustainable, attractive returns for stockholders. I look forward to working with Irwin and the Combined Company’s management team to make our consumer products more accessible around the world.”

Aphria’s Position Of Strength

Aphria has been delivering much better results as the company reported in October that its gross revenue was $69.6 million in the first quarter for the fiscal year 2021. This represented strong growth, showing a 23% increase from the prior quarter, as well as the sixth consecutive quarter of growth. The company’s net cannabis revenue totaled $62.5 million, showing a whopping increase of 103% from the same quarter last year. The company reported an adjusted EBITDA of $10.4 million for the cannabis business, representing an 11% increase from the prior quarter.

Aphria’s total net revenue from the first quarter reached $145.7 million, an increase of 16% from last year’s quarter. The company did report a 4% decrease in total net revenue from the prior quarter, however, this is solely due to circumstances and lower distribution revenue stemming from COVID-19, specifically from CC Pharma in Germany. Especially considering the COVID-19 curve balls that every company has had to navigate, Aphria ended the first quarter with a bang. They finished with a strong balance sheet and liquidity; which includes $400 million of cash and cash equivalents to fund the company’s growth, both in Canada and internationally.

Aphria in November said it would enter the U.S. via an agreement to buy craft brewer Sweetwater Brewing Co. for around $300 million. SweetWater is known for beers that use terpenes and hemp flavoring. Aphria said the brand was “closely aligned with a cannabis lifestyle.” Tilray owns Manitoba Harvest, a hemp company that sells products in the U.S. and Canada.

Combined Company

In the Aphria statement, the company said that on a pro forma basis, for the period August to October 2020, the Combined Company would have held a 17.3% retail market share, the largest share held by any single Licensed Producer in Canada and 700 basis points higher than the next closest competitor.  In the United States, Aphria said that the Combined Company will have a strong consumer packaged goods presence and infrastructure with two strategic pillars, including SweetWater, a cannabis lifestyle branded craft brewer, and Manitoba Harvest, a pioneer in branded hemp, CBD and wellness products with access to 17,000 stores in North America.

The combination of Aphria and Tilray is expected to deliver approximately C$100 million of annual pre-tax cost synergies within 24 months of the completion of the transaction. The Combined Company expects to achieve cost synergies in the key areas of cultivation and production, cannabis and product purchasing, sales and marketing, and corporate expenses.


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