Tilray (NASDAQ: TLRY) recently saw its share of the Canadian retail cannabis market decline, but the producer said it was encouraged because recent declines in this area had been less significant than in the past.
Tilray's retail market share fell to 10.2% in the most recent quarter from 12.8% in the prior quarter, said Canadian business president Blair MacNeil.
He blamed the decline on the company's change in flower-growing strategy and product availability issues in that category, as well as the vaccine passport requirement in Quebec, which impacted sales. The dissolution of a partnership with Marley Natural, a cannabis brand associated with musician Bob Marley, also had a negative impact on sales.
During Tilray's third quarter, many provinces and territories still facing heightened COVID-19 measures, as well as fierce competition in the cannabis market.
MacNeil calculates that the opportunities in the Canadian cannabis market are worth around $10 billion and said around 54% of that market is served through legal channels, which present a significant revenue opportunity ahead.
Tilray has seen the market cut retail prices by 24.5% over the past 12 months and drop overall prices by 6.5% over the past three months, but the company has managed to keep margins around 40%.
Tilray Swings to a Profit
In the third quarter, the Leamington, Ontario-based company posted net income of US$52.5 million, which compared with a loss of US$258.6 million for the same period a year earlier.
Earnings per share for the third quarter were US$0.09 per share, up from a loss of US$1.03 per share in the same period last year.
Tilray's net revenue was US$151.9 million, up from US$123.9 million in the same quarter a year earlier, boosted by sales of cannabis, alcoholic beverages and personal care products.
The company is keeping tabs on the United States, as the House of Representatives of Congress has passed a bill that would remove cannabis from the US list of federally controlled substances.
This is the second time the House has passed the bill, which will now make its way through the Senate.
Cannabis companies have been following the US market for years. Tilray has made inroads into this market with its acquisitions of SweetWater Brewing Company and Breckenridge Distillery.
The company has also purchased enough convertible debt from MedMen Enterprises to secure a minority stake when legalization takes place in the United States.
