Tilray stock prices plummeted on January 10 amid a weak earnings report due to the issues of cannabis legalization in the US. Its value declined by -6.44% to $2.76 on Tuesday. It had a net revenue of $144.10 million, and it is on a constant currency basis of $157.60 million.
Also, the company’s earnings per share were down by -$0.06, in line with expectations, below the preliminary figures of -$0.13. Besides, the revenue fell to $144.10 million from the $156.85 million forecast. Despite that, it maintained a solid financial position with $433.50 million in cash and marketable securities. Moreover, it stood at the number one position in Canada with an 8.30% cannabis market share.
Additionally, Tilray increased its gross margin by 22.00% year-on-year to $40.10 million. As a result, the adjusted gross profit jumped to 29.00% compared to the quarter a year ago. Furthermore, it marked its 15th consecutive quarter of positive adjusted EBITDA of $11.70 million.
According to Tilray Chairman and Chief Executive Officer Irwin D. Simon, they took a path to long-term profitability. Moreover, the cannabis company is close to hitting its increased annualized cost savings target of $130.00 million. However, its investors were not happy with a reported quarterly loss and a miss in revenue expectations.
Alcohol Sector Becomes New Focus of Tilray
The US cannabis legalization has not progressed as Simon expected, leading them to shift to alcohol goods.
If ever the Tetrahydrocannabinol becomes federally legal in the US, Tilray plans to set up potential distributions in the country. However, the lack of political actions can blur this possibility from happening. For that reason, the marijuana-based company focuses on a growing capacity of fruits and vegetables. The shift will only be short-term as they plan for more alcohol distributions in America. This led to the stock being down by 56.30% in the last 12 months and a loss of six cents a share.