Canadian cannabis producer Tilray Inc. reported that although experiencing rising sales, its third quarter loss has doubled, resulting in a $35.7 million loss for the quarter ending Sept. 30.
Despite the loss, Tilray has sold nearly five times the amount of cannabis it had sold last year due in part to the acquisition of Manitoba Harvest and early returns from selling medical cannabis in Europe. Sales to the domestic adult-use market represented just 30 percent of Tilray’s revenue for the quarter, down two percent from the second quarter. Tilray sold the equivalent of nearly 24,000 pounds of cannabis, almost double the amount sold in the second quarter, but the average selling price per gram dropped 30 percent to $3.25.
“Our performance in the third quarter, including solid revenue growth and sequential gross margin expansion, reflects the positive business trends we have underway,” said Brendan Kennedy, Tilray’s president and CEO. “We are in the early days of seeing our strategic initiatives bear fruit — including our European expansion, brand portfolio evolution and strategic partnership product launches. We continue to expect significant growth in the fourth quarter and into 2020.”
Cronos Group Inc. also experienced a drop in their price per gram on the wholesale market. The company posted $12.7 million in revenue over the same period, with a majority of the sales coming from wholesaling to licensed producers as opposed to retailers. Its net revenue increased by 25 percent over the previous quarter, but the company’s price per gram on the wholesale market was $3.75, 42 percent lower than the previous quarter.
Last year, Tilray became the first cannabis company to go public with an initial public offering on a major U.S. exchange. For the fourth quarter, analysts expect a loss of 28 cents per share and sales of $57 million.