Tilray (TLRY) CEO Brendan Kennedy fueled the fire around cannabis stocks with talk of more big corporate tie-ups in the space in his first Wall Street call since taking his company public.
With speculation around a major investment by Diageo (DEO) in the space driving up shares of Tilray and other cannabis stocks in recent sessions, Kennedy predicted pharmaceutical, tobacco, beverage and consumer product giants will wade in.
“I expect more strategic investors to enter this industry in coming months,” Kennedy said on the pot producing company’s earnings call with analysts late Tuesday after the companyreported earnings.
Kennedy said he could not comment on specific companies taking a look at the sector, but he said consumer package companies and others “are in a desperate search for growth” and that cannabis is already disrupting their business models.
Kennedy’s comments came as Tilray reported a 95% jump in second-quarter revenue to $9.7 million, ahead of the Wall Street estimate of $9 million, in its first earnings release since it went public on July 19. The company’s net loss was 17 cents a share, compared to the analyst estimate for a loss of 9 cents a share.
The pharmaceutical industry sees cannabis as a replacement for opioids, Kennedy said. Alcohol companies are “terrified” and have already made investments in the space.
Consumer packaged goods companies are looking at CBD-infused water products and exercise recovery drinks.
While Tilray has been more active in Canada, Portugal and supplying medical cannabis in the U.K. and Germany, the U.S. market is also on its radar.
“We’re a lot closer to federal legalization in the US than most people realize,” Kennedy said. “Whenever it happens, Tilray will be ready.”
Meanwhile, the Toronto company expects its growth to accelerate as it ramps up production of cannabis and looks to boost its international sales.
High Park Holdings, its subsidiary for the pending adult-use market in Canada, will supply seven provinces. Tilray is working to set up alliances with retailers for the private retail market in Ontario. It will supply the Ontario government with cannabis for legal online adult use sales after October 17. It’s advancing its Tilray medical products in Canada and getting ready to boost cannabis producction in Portugal. It’s also hiring more executives and refinancing its debt.
Shares of Tilray have moved up sharply in recent days on reports that Diageo was in talks to ink a marijuana drink deal. Earlier this month, Constellation Brands (STZ) and Canopy Growth (CGC) teamed up to launch cannabis products, just weeks after Molson Coors(TAP) also inked a pact with a Canadian firm.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.