Weather alerts issued for 7 provinces, 1 territory
Warnings of up to 60 millimetres of rain and other alerts have been issued for seven Canadian provinces and one territory ahead of the Easter weekend.
Tilray Brands Inc. saw its share of the Canadian retail cannabis market slip recently, but says it is feeling encouraged because the recent dips are less significant than it previously experienced.
Blair MacNeil, the Leamington, Ont. pot company's president of Canadian operations, said Wednesday that in the company's third quarter, its retail market share fell to 10.2 per cent from 12.8 per cent.
He blamed the decrease on the company changing its flower strategy and struggling with availability of product in that category, the use of vaccine passports in Quebec that impacted pot sales, and the dissolution of a partnership with Marley Natural, a cannabis brand associated with musician Bob Marley.
"Still we maintained our No. 1 market share in Canada and leading positions across numerous adult use categories, including pre-rolls," he said on a conference call with analysts.
"Notably, the rate of decline in the month of February is the lowest we've experienced in over a year -- an encouraging first step, which leads up to believe that our pricing and marketing adjustments are paying dividends."
MacNeil's observations encompass the company's third quarter, which is covered by the three months ended Feb. 28. That period saw many provinces and territories still facing increased measures meant to quell COVID-19, as well as stiff competition within the cannabis market.
MacNeil estimates cannabis opportunities in Canada are worth about $10 billion and said about only 54 per cent of that market is being served by legal channels, which presents a "significant revenue opportunity ahead."
"However, the Canadian cannabis market remains crowded and oversaturated with 800 licensed producers and 3,200 retail stores," he said. "This has led to an oversupply of products and price compression."
He saw the market reduce retail prices by 24.5 per cent in the last 12 month and drop overall prices by 6.5 per cent in the last three months, but Tilray has managed to keep its margins around 40 per cent.
In the third quarter, it posted a net income of US$52.5 million, compared with a loss of US$258.6 million during the same period a year ago.
Tilray's earnings for the three months ending Feb. 28 amounted to nine cents per share US, up from a loss of US$1.03 per share the year before.
The company recorded net revenue of US$151.9 million for the quarter, up from US$123.9 million in the same quarter last year, driven by increases in cannabis, beverage alcohol and wellness product sales.
But some products, as well as some of its 12 brands that include Solei, Good Supply, Riff and Broken Coast, could be on the chopping block.
"We will be rationalizing them to focus our innovation, investments and distributor resources on the brands with the scale and unique value proposition which serves consumer needs and helps improve margins," MacNeil said.
The company will also keep its eye on the U.S., where the House of Representatives last week passed the Marijuana Opportunity Reinvestment and Expungement Act, which would effectively remove cannabis from the U.S. list of controlled substances.
It's the second time the House has passed the bill, which will now make its way to Senate.
Pot companies have been eyeing the U.S. for years and Tilray has made inroads into the market with its acquisitions of SweetWater Brewing Company and Breckenridge Distillery.
The company has also bought enough of MedMen Enterprises Inc.'s convertible debt to turn into a minority stake upon U.S. legalization.
"We'd like to one day own MedMen upon legalization and there's a lot of other great multi-state operators out there that we'd like to buy," said Tilray chief executive Irwin Simon, on the same call as MacNeil.
He wants to get to US$500 million in consumer products sold in the U.S., up from the US$150 million stemming from its current businesses.
This report by The Canadian Press was first published April 6, 2022
Warnings of up to 60 millimetres of rain and other alerts have been issued for seven Canadian provinces and one territory ahead of the Easter weekend.
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