Business

Embattled cannabis company Tilray (TLRY) is finally gaining momentum


FAfter a torrential implosion in market value since February last year, cannabis company Tilray (US:TLRY, CA:TLRY) has finally given its stakeholders a reason to smile. Management reported encouraging developments for its fiscal year 2022, including double-digit revenue growth and a positive cash flow forecast for fiscal year 2023. Additionally, the legalization of medical marijuana in Switzerland theoretically expands the market total addressable for cannabis companies. Tilray is particularly specialized in exploring the therapeutic potential of the plant.

According to the company’s press release, Tilray posted net sales of $628 million, a 22% increase over the prior year tally. At constant exchange rates, net sales increased by 29% compared to the result of the 2021 financial year. During the fourth fiscal quarter (ended May 31, 2022), Tilray generated net sales of 153 million dollars, an increase of 8% compared to the level of the previous year. Adjusted for currency fluctuations, net income increased 14% to $163 million.

In addition, management expects Tilray to generate between $70 million and $80 million of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and show positive free cash flow in its operating units. in fiscal year 2023.

Following the above disclosure in the early morning hours of July 28, TLRY stock gained 12% from the previous day’s session. In the month between July 5 and August 4, stocks soared more than 24%.

Adding to the optimism for TLRY stock and other cannabis players is a Forbes report that Switzerland has legalized medical cannabis from August 1st. Additionally, new legislation will allow Swiss companies to export medical marijuana for commercial purposes.

In September 2018, Tilray made headlines by announcing a partnership with the University of California, San Diego. As part of the agreement, researchers at the University of California School of Medicine conducted a new clinical trial to “examine the safety, efficacy, and pharmacological properties of cannabis as a potential treatment for adults with essential tremor (ET).Currently, ET is treated with repurposed drugs originally developed for high blood pressure or seizures.Surgery is another option.

In its publication for the 2022 financial year, Tilray declared to be the leader in the European medical cannabis sector, with a 20% market share in Germany. Irwin D. Simon, President and CEO of Tilray Brands, said, “Over the past year, we have accelerated the optimization of our operations and refined execution against our most important core business opportunities. profitable in the areas of medicine, adult, wellness and alcoholic beverages. everywhere in Canada, Europe and the United States »

Although investors have plenty of positive details to digest, Tilray admitted to incurring a net loss of $457.8 million in the fiscal fourth quarter, compared to net income of $33.6 million in the quarter. of the previous year. To explain this dichotomy, Tilray cited challenges such as “market conditions including higher borrowing rates and lower exchange rates.”

The admission of rising borrowing costs comes as the consumer price index hit 9.1% in the year ending June 2022. Additionally, the purchasing power of the dollar decreased by 12.92% since the start of the COVID-19 pandemic until June this year.

By Joshua Enomoto for Fintel.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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