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Canadian cannabis firm Tilray (NASDAQ:TLRY) saw its shares slump at the market opening after it reported a drop in total revenue during its Q4 and full fiscal 2019 year results.
The British Columbia-based firm fell over 11 percent in aftermarket trading on Monday (March 2) after telling investors it took in an 8.2 percent decrease in total revenue quarter-over-quarter to US$46.9 million. The firm opened at US$13.01 on Tuesday (March 3).
Net losses for the quarter were at US$219.1 million, or US$2.14 per share, and were attributed to growth initiatives, international expansion and the acquisitions of Manitoba Harvest and Natura Naturals Holdings to its portfolio.
International medical cannabis sales were down from the previous reporting period as well, falling to US$4 million from US$5.7 million in Q3.
Tilray CEO Brendan Kennedy said the year offered plenty of firsts for the firm and a variety of challenges during an earnings call after market close on Monday.
“I have been an investor and operator in the cannabis industry for nearly a decade now. And I believe that we are still in the very early days of this industry’s growth trajectory,” he added.
Kennedy went on to reiterate the problems currently affecting the Canadian cannabis market, including the slow growth of the legal market due to a lack of retail locations and an active and robust illicit sector.
Despite any short term challenges, Kennedy said he remains bullish on the overall sector for the medium and long-term.
Outside of Canada, Kennedy said Tilray plans to focus even more on its international exploits, including increasing production capacity at its facility in Portugal by 340 percent and doubling down on building cannabidiol (CBD) brands in the US.
In the face of sector-wide issues, Mark Castaneda, the firm’s CFO, said the company felt it was prudent to strengthen its balance sheet by taking non-cash impairment charges related to uncertainty in the US CBD market.
Castaneda added that Tilray plans on making non-cash valuation adjustments addressing its supply for cannabis extracts.
Bulk cannabis sales for Tilray were also down 44 percent year-over-year to US$3.9 million, and Kennedy said that bulk sales will be “somewhat non-existent” moving forward in 2020.
Like the rest of the cannabis industry, Tilray has struggled in its pursuit of profitability amid a volatile capital market.
Last month, Tilray told media outlets that it was cutting 10 percent of its global staff, joining the likes of fellow names in the marijuana space The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) and Aurora Cannabis (NYSE:ACB,TSX:ACB), which have also made recent cuts to their job forces as they look to optimize efficiency.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
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