Tilray's qtr paints a VERY gloomy pictureWell, Tilray's latest qtr results are out and what a dreadful precedent it sets, apart from showing the awful economic environment cannabis companies continue to operate in. This is not only bad for Tilray herself, but for the whole entire sector. This is really bad news for Canopy s/h who were maybe expecting somekind of relief this year. Instead what you got was a somber forecast of what's to come with your own company's financials, which i assume are up quite soon. These financial results from Tilray shouldn't have been a surprise to anyone, especially since the global economic situation has continuously deteriorated each year since the Pot Peak.
So what does this mean for Canopy s/h? Well, nothing good that's for sure. You guys just got a heads up of what's coming your way. And what makes this worse is that Tilray is a much better finanical shape than Canopy right now. If you've been bagholding for some time now and you still haven't sold out your positions here, you might want to rethink & revisit that decision, while there's still time. What Tilray just let out is a major red flag for all Lp's & retailers. Things were already bad from 2018-2020 before the Corona Virus hit. But the fallout from that pandemic was "almost" a literal death sentence for the cannabis sector. I say almost because folks & their respective Ceo's didn't think things could get worse and it was still viable for the stronger operators. Well, that was true until 2021 hit and everything flew apart, literally the final nail in the coffin for the sector.
So i'll just repeat what i've been saying for the longest time, this sector still has WAYS to go before any recovery takes place. At the very least another year or two, maybe more if the economic conditions get worse. Hopefully for you folks, in that time even if the economy doesn't pan as expected there could be some movement in legislation which could help. As for Canopy, whether they make through this year in one piece or not is not in question, i think we can all agree that the Canopy of 2023/2024 will not resemble anything of its current state and neither will its shareholder base. I personally wouldn't risk holding here or even dare buy, but as the say goes "to each their own."
Some predictions for those who are interested. I fully expect the stock to continue its downtrend until their debt load issue is resolved one way or another and they are able to at least break even when selling product. As it stands now, the absolute best, most efficient POT company on planet earth is not able to do this at this time in North America and niether will Canopy. So until those economics change expect continued pressure on the sector. Therefore i expect the stock to languish around $2 usd, give or take a few pennies, until they convert most of their toxic debt to equity. Then complete the financial restructuring by a consolidation of share capital of anywhere from 10 - 20 to 1 sometime in late 2023. So i hope some of you guys have lots of patience & a very long time frame, as the opportunity costs here will be quite high.
GLTA