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Cannabis Summary for July 28, 2021

2021-07-28 20:21 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index added 16.68 to 180.98, while the CSE Composite Index added 10.21 to 706.81. Canadian cannabis giant Tilray Inc. (TLRY) shot up $4.02 to $20.05 on 6.52 million shares, after releasing its financials for the fiscal fourth quarter and year ended May 31. Investors seemed impressed -- or relieved. They had spent the last two weeks sending the stock down from over $20, a sharp stumble from which it has now mostly recovered.

These financials were the first to include a contribution from Aphria, the fellow Canadian cannabis giant that Tilray acquired in April. Chairman and chief executive officer Irwin Simon declared today that the merger "transformed and strengthened Tilray" and helped it deliver "solid results." He toasted the combined fourth quarter revenue of $142.2-million (U.S.), adjusted EBITDA of $12.3-million (U.S.) and bottom-line net income of $33.6-million (U.S.).

Such numbers are more of a mixed bag than Mr. Simon's rosy remarks might suggest. Revenue of $142.2-million (U.S.) came in below analysts' predictions of $150.4-million (U.S.), although adjusted EBITDA of $12.3-million was more than double analysts' predictions of $5.8-million (U.S.). As for the bottom line, it benefited from what Tilray vaguely called "non-operating income" of $121.5-million (U.S.). Investors were left to guess at what this income might be, but the likely explanation is that the drop in Tilray's share price during the quarter triggered a substantial non-cash accounting gain on convertible debentures. Without that gain, operating loss for the fourth quarter came to $73.6-million (U.S.) (or about $40-million (U.S.) if one strips out transaction costs related to the Aphria merger).

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