Cannabis producer Tilray brands reported a jump in sales on Wednesday as the company diversifies its portfolio and moves deeper into the beer industry.
The company reported fiscal first quarter net sales of $177 million, up 15% year over year. The cannabis division reported net sales of $70 million, up 20% year-over-year.
Additionally, net loss narrowed to $55.9 million in the quarter, compared to a loss of $65.8 million a year ago.
Tilray is a multinational cannabis company based in Canada but has increasingly diversified into other segments, particularly the U.S. craft beer industry, as it navigates an uncertain legal environment for marijuana around the world.
The company said it increased cannabis sales in Canada by 16.5% and strengthened its leading market share position in the country to 13.4%. Canada is one of the few major markets where recreational cannabis is federally legal.
Workers inspect cannabis plants in the cultivation room at Aphria Inc.’s Diamond facility in Leamington, Ontario, Canada, on January 13, 2021.
Annie Sakkab | Bloomberg | Getty Images
In an earnings call on Wednesday, CEO Irwin Simon said the company’s recent mergers and acquisitions in the beverage space will accelerate growth and expand the company’s footprint beyond its recreational cannabis business as the drug expands into key markets around the world, including at the federal level in the USA, remains illegal and in large parts of Europe.
“We’re waiting for legalization in the United States,” Simon said separately during an appearance on CNBC’s “Squawk on the Street” on Wednesday. “If it happens, it will be great and we will be in a good position.”
If legalization doesn’t happen in the US, Simon says the company will fall back on its booming beverage business.
In recent years, the company has been on a buying spree, making deals in what it says are fast-growing markets like craft beers and cannabis-infused beverages.
Earlier this week, Tilray completed the acquisition of eight beer brands Anheuser-Busch InBev that it had announced in the summer. The company said the deal makes it the fifth-largest in the U.S. craft beer market.
Around the same time, the company acquired the remaining 57.5% stake in cannabis beverage maker Truss Beverage from Molson Coors Canada.
Transaction prices for both deals were not disclosed.
Tilray’s beverage alcohol sales rose 17% to $24 million in the first quarter, compared with $21 million in the year-ago period. The company cited, among other things, the growth of its subsidiary Montauk Brewing Company. Tilray acquired Montauk, a fast-growing brewery in the New York metropolitan area, in 2022.
“We have strategically diversified our business globally in recent years and as a result, Tilray is now ideally positioned to capitalize on a broad range of opportunities across multiple industries,” Simon said in the earnings release.