Tilray stock is moving up about 7% this morning after Tilray's (NASDAQ:TLRY) subsidiary inked an agreement with Cannamedical Pharma GmbH to export $3.3 million of medical cannabis to Germany.
Europe is currently one of the most lucrative cannabis markets in the world, and companies from North America are frequently signing deals to spread their footprint in the continent. Tilray had already established its facility in Portugal some time back, and today the company announced a major supply deal with regards to that facility.
The Portugal facility inked a deal today, which will have it supply cannabis worth $3.3 million to the German company Cannamedical Pharma GmbH. Germany is the largest economy in the European Union, and through this deal, Tilray gets access to a much larger market than that of its home country of Canada.
This deal further proves that Tilray is on its way to making a successful foray into the international cannabis markets. It is particularly commendable since the Portugal facility was opened in March this year and it became operational a month later.
At the time of writing, Tilray stock is trading higher by 7%, at a high of $31.34.
TLRY Stock Down 40% in the Past Week
However, the situation with the Tilray stock has not been particularly great as of late, particularly after the company posted wider than expected losses in the second quarter. The stock dived by as much as 40% after the results were posted. Although the company managed to beat estimates with regards to its revenues, this did not elicit much positivity from investors. The net loss for the period widened to $35.1 million, while the losses in the year-ago period were $12 million. However, the revenues soared to $45.9 million and reflected a hefty climb from $9.7 million in the 2nd quarter in 2018.
According to plenty of analysts, the company’s Q2 2019 was a disaster, and the biggest factor in Tilray’s continued losses seems to be its spiraling expenses. Gordon Johnson, who is an analyst at Vertical Group, stated that if the company continues in the same vein, then it could burn as much as $117 million in the full year this year, while the same metric in 2020 could be as much as $192 million. It was the company’s uncontrolled rise in costs that eventually resulted in the loss in the second quarter, and that has also resulted in gloomy estimates about the company’s future.
Tilray stock is one of the worst performers this year, with a loss of 70% from its January peak price of $100.
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