Canadian cannabis producer Tilray Brands said Wednesday that it has reached a distribution deal with supermarket giant Whole Foods and that it remains on track to hit its revenue target.
In its earnings call Wednesday morning before the market opened, Tilray reported $152 million in net revenue and $39.8 million in gross profit for the third quarter, with the company saying it posted a profit in the latest quarter. That “included $72.7 million in net non-operating income, compared to a non-operating expense of $220 million in the year-ago quarter,” according to MarketWatch.
It made for what market analysts dubbed a “surprise profit.”
Tilray’s net revenue and gross profit for the third quarter represent an increase of 23 percent and 31 percent respectively compared to the prior year quarter.
Irwin D. Simon, the company’s chairman and chief executive officer, said that the results of the company’s third quarter earnings “reflect progress and momentum across all of our key business segments and geographies, setting the stage to achieve our target for $4B in revenue by the end of fiscal 2024.”
“As the global economy re-opens, we are confident that the global cannabis powerhouse at the heart of the Tilray Brands’ value proposition will deliver sustained and tangible shareholder value,” Simon told investors.
Tilray Brands Pens Deal with Whole Foods
Tilray’s deal with Whole Foods announced Wednesday involves the cannabis giant’s subsidiary Manitoba Harvest, which makes products derived from hemp.
Under the partnership, Manitoba Harvest’s “Hemp+ Matcha and Supergreens powders” will be sold exclusively at Whole Foods in North America. According to MarketWatch, Manitoba Harvest’s hemp powders “will be exclusively available at 300-plus Whole Foods Market locations nationwide for the next 90 days as part of a tie-up between the two companies,” and that after the 90 days are up, “the products will continue to be available at Whole Foods and other locations across the U.S. and Canada.”
News of the partnership with Whole Foods and the unexpected profit gave a boost to Tilray’s stock on Wednesday, rising as high as 12.5 percent after the earnings call.
“We’re diversified in regards to cannabis; plus we’ve got our spirits business and the Whole Foods deal,” Simon told MarketWatch. “There’s a lot of components there. Crap will happen out there. Again, we do have multiple levers to pull when that happens. That’s what’s important. I hope the stock is up because of the competence and confidence we’ve expressed in achieving these things.”
Leading Canada’s Cannabis Industry
In Tilray’s home base of Canada, Simon said that the company has maintained its “leading market share position amid intense competition,” and that it believes that its “strong capital position, operational excellence and pricing and marketing adjustments will work in concert to help ensure we reclaim share in the coming quarters.”
Among the third quarter highlights the company said, its leadership position in Canada remained at the top due to its “10.2% cannabis market share driven by Tilray’s comprehensive portfolio of adult-use brands, and growth in pre-roll and vape product categories.”
The company continues to expand its footprint south of its border with U.S.-based subsidiaries like Manitoba Harvest, SweetWater Brewing and Breckenridge Distillery.
Simon told investors on Wednesday that those three businesses “are profitable, growing and emerging as nationwide, iconic brands with loyal followings that will be home to THC-based products upon U.S. federal legalization.”
In his interview with MarketWatch, Simon said that investors who are anticipating federal legalization to arrive in the United States soon are still deciding “which horse they’re gonna get behind.”
The House of Representatives last week passed a bill that would end the longstanding federal prohibition on cannabis, and the Senate has said it aims to produce its own legalization bill by the end of the month.