TLRY Earnings
Currently, TLRY is a poorly capitalized roll-up run by a CEO that blew up that last company he ran. I documented the disaster that was HAIN and looked forward to documenting his antics at TLRY. The promotional CEO stated that his target is to have $4.0 billion in revenues by 2024. The can only happen if he gets shareholders to approve a significant increase in the shares outstanding, to nearly 1.0 billion shares. Thus, leading to future dilution for existing shareholders. TLRY reported a net income of $33.6 million or $0.18 per share for the quarter, compared to a net loss of $84.3 million or $0.39 per share last year. In Q4, TLRY's ability to generate net income was related to recognizing $121.5 million in net non-operating income. This was due to an unrealized gain on the convertible debentures driven primarily by the decline in the share price and the change in the trading price of the convertible debentures. So the operating loss for 4Q was ($73.7 million) versus ($75.8 million) last year, yet the company was rewarded with a short-covering rally of 25% yesterday. More to come on this!
IL Licensing On-Track
Last week, I wrote about a Michigan-based business suing the state of Illinois for having an unconstitutional lottery to decide who receives the licenses. Thankfully for the other cannabis companies in Illinois waiting for a license, this lawsuit was dropped. However, the lawsuit could disrupt the lottery, which will begin today and have two more lotteries on August 5th and August 9th. The lottery today will award 55 licenses to qualifying applicants with a score of at least 85% of the 250 application points. In total, the state will release 185 licenses to various companies. This process has been long-awaited as there have been many delays by the state of Illinois. The average dispensary in Illinois has the highest annual revenue compared to any other state at $16.5 Million due to the lack of licenses. However, this will soon change once more licenses are added these next few weeks.
Cuomo Vs. DeBlasio
New York City Mayor Bill DeBlasio has been blasting New York State Governor Andrew Cuomo over the slow rollout of the state's new pot legalization law. “The state of New York needs to get in gear here. We had a big, long, multi-year discussion over legalizing cannabis. We saw the state legislature act; now the state needs to do something about it, [and] they still haven’t. It’s time for the state to wake up and do its job on this really important issue,” de Blasio said." Governor Cuomo's office responded by simply saying: “After all these years, I can’t believe that the mayor still doesn’t know how state government works.” However, as of last Sunday, Cuomo is yet to nominate an executive director for the Office of Cannabis Management or name appointees to the Cannabis Control Board. Even after the Gov. nominates individuals for these positions, they will still need to be confirmed by the senate. The NY Senate has not been in session recently; these nominations will need to go through once they are back. There still seems like a long road for New York state before recreational sales actually begin.
