Tilray Brands (TLRY) Announces 1Q23 Earnings.
TLRY reported 1Q23 results on Friday and put up net revenue of $153.2M with gross margins improving to 51% in the quarter compared to 43% at this time last year. This represents a YoY revenue decline of 9% and a cannabis revenue decline of 17%. What helped Tilray's quarter was the fact that their alcohol beverage revenue jumped 34% YoY. They are at $108M of their target goal of $130M in annualized cash savings to date with the company having $500M in cash on their balance sheet. Excluding the U.S., Tilray Brands now has the leading cannabis revenue in federally legal markets across the global cannabis industry – uniquely enviable positioning as legal cannabis continues to take hold globally. Tilray's international revenue grew 2% YoY compared to their Canadian revenue number declining 10%YoY.
Management continued to harp on the growth story in Germany, "Germany in particular, is taking concrete steps towards adult-use legalization, with German lawmakers from the country recently touring Canada and California cannabis businesses to hear from provincial leaders, state officials, experts and advocates about lessons learned from cannabis legalization. With two EU GMP certified operations positioned ideally in Portugal and Germany, Tilray is positioned for significant advantages as legalization spreads." They continued to speak about the opportunity, "The European market, which is estimated to be worth as much as $37 billion by 2027, has already embraced a medical cannabis business and is nearing broad-scale adult-use legalization."
We have to be honest, this is not the quarter that Tilray was hoping for on almost every account. The company's largest revenue streams continue to decelerate and miss even street estimates for the company. We wrote earlier in the week that the international market is starting to get more and more competitive which does not paint a great picture for Tilray as that is there are positive segments (minus beer, which is only a small part of their revenue contribution). When the core of your business, Canadian Cannabis, is slowing at the rate that Tilray's core is slowing, it is a massive red flag. This is not a company you want to be owning while we see pricing pressure across the world in the cannabis market and a consumer slowdown in the near-term future. The stock was down ~19% on the day of its earnings release.
Curaleaf Opens in Scottsdale.
Curalead Holdings (CURLF), announced last week the opening of its Scottsdale dispensary. Curaleaf Scottsdale is the Company's largest retail location in Arizona and one of its 16 dispensaries in the Grand Canyon State. Located across the street from the world-renowned Tournament Players Club, Curaleaf Scottsdale is dedicated to providing high-quality cannabis products and services to patients and customers at all stages of their cannabis journey. The new location offers a wide array of products, including high-quality flower and pre-rolls, Curaleaf Plant Precision gummies and topical gel, Select X Bites, Select Squeeze, Select Cliq and B NOBLE pre-rolls. "Following the completion of our Tryke acquisition this week, we are excited to deepen our roots in Arizona with the opening of Curaleaf Scottsdale," said Matt Darin, CEO of Curaleaf. "Not only is it our largest retail location in the state, but it is also led by a team of dedicated, knowledgeable professionals who are eager to serve the Scottsdale community."
AYR Haze Heading For Florida.
Ayr Wellness (AYRWF) announced last week the rollout of its premium live resin concentrates and vapes brand HAZE in Florida. Having recently celebrated surpassing 50 retail stores throughout Florida, the introduction of Hydrocarbon Extractionproductsto its menu marks another major milestone for Ayr in the Sunshine State. “Ayr has carefully crafted a brand portfolio that appeals to a wide array of consumers throughout the value spectrum, providing quality products at every price point,” said Jonathan Sandelman, Founder and CEO of Ayr. “HAZE represents a premium experience at an attractive price point, enabled by the cultivation and production improvements since we took over the Liberty Health Sciences’ Gainesville facility last year.”HAZE premium live resin concentrates and vapes are formulated for rapid onset and deliver a full-sensory experience. Products available at launch include live resin vape cartridges, live badder and live sugar. Strains include WAP #27, Caesar, 8” Bagel, Gorilla Glue, Mr. Nasty and Ruby Slippers.
