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Nanaimo cannabis producer Tilray sees sales triple in fourth quarter

Loss was wider than expected, but CEO sees market opportunity in medical marijuana exports
tilraygrowroom
Workers view cannabis in a Tilray grow room | submitted

Fast-growing Nanaimo-based cannabis producer Tilray (Nasdaq:TLRY) after hours on March 18 revealed a tripling of revenue during its fourth quarter, but a larger loss than expected prompted shares to slump more than 2.5% on March 19.

In the full year for 2018, revenue increased to US$43.1 million, up 110% compared with 2017. Bulk sales, accelerated wholesale distribution in medical marijuana exports and the start of recreational cannabis sales in the Canadian market helped Tilray see the increase in sales.

“Looking ahead, we remain committed to pursuing global growth opportunities and will be disciplined in deploying capital, particularly in the U.S. and Europe, where we believe we have multiple paths for value creation,” said CEO Brandon Kennedy in a release.

Despite the strong sales, expenses racked up. Tilray lost US$67.7 million, or $0.82 per share, compared with US$7.8 million, or US$0.10 per share in 2017.

The company sold 6,478 kilograms of cannabis, or 114% more than the 3,024 kilograms of cannabis that it sold the previous year. The price per gram also increased: to US$6.61 in 2018 from US$6.52 the previous year.

Many cannabis investors remember Tilray for its spectacular performance following its July 19 initial public offering on Nasdaq, when it went public at a price of US$17.

By the end of that first day of trading, Tilray's shares had closed at US$22.39, up 31.7%.

Steady gains then pushed shares to close on September 19 at US$214.06, which worked out to be a 1,159% return in its first two months of trading and a market capitalization more than US$19 billion.

Shares hit an intraday peak of US$300 – a value that was 1,664% more than the IPO price.

Tilray shares in late morning Pacific time on March 19 were US$70.23.

The excitement over Tilray's stock was initially partly because Tilray was the first cannabis-sector company to launch an IPO on a major U.S. stock exchange. It is not the only cannabis company to list on a major U.S. stock exchange, as other Canadian cannabis companies, such as Canopy Growth Corp. (NYSE:CGC) and Cronos Group Inc. (Nasdaq:CRON), are already listed on major U.S. exchanges. Those other companies, however, were public in Canada before they listed south of the border.

Seattle-based Privateer Holdings, which last year owned 76% of Tilray, is backed by controversial technology entrepreneur Peter Thiel.

Thiel, who supported U.S. President Donald Trump during the last U.S. election, is likely best known for co-founding PayPal in 1999 and steering that fintech venture to be acquired by eBay in 2002 for US$1.5 billion.

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@GlenKorstrom