Tilray Brands Inc TLRY

Germany: Cannabis soon available in pharmacies for everyone?

[Savage97]

According to the city administration, the Cannabis Research Germany association will initiate a nationwide, research-based model project under the scientific supervision of the Center for Interdisciplinary Addiction Research in Hamburg. In addition to Wiesbaden, other cities from all over Germany want to join this project.

Lbcke sees this plan as an expression of a "contemporary addiction and drug policy": The development of this "second pillar" alongside private cultivation and the approved cultivation associations is "essential" in order to marginalize the black market and achieve the goals of successful child, youth and health protection. By distributing through pharmacies, Wiesbaden will ensure that their high pharmaceutical standards also apply to the distribution of cannabis.

Turning to our international cannabis, we grew net revenue by 22% year over year to approximately $53 million and remained the No. 1 market leader in medical cannabis across Europe. Our annual growth during the fiscal 2024 was driven by increased sales in Germany, Poland, the U.K., Australia, and New Zealand. In Germany, we believe we're best positioned to capture a majority of the expected incremental growth in the cannabis medical market, which is projected to be approximately $3 billion in the medium term.

Main two drivers of growth in FY25 should be Germany (in particular, and Europe in general) and the US drinks business.  Revenue guidance does not include potential future M&A.” The company is basing its guidance on the potential business in the beverage markets and the German cannabis market. CEO Irwin Simon also noted in the company’s earnings call that rescheduling in the U.S. would change things at Tilray.  Simon said that he sees an opportunity in selling infused beverages in the U.S. Simon told investors on the company’s earnings call, “We also relaunched HiBall Energy Drinks on Amazon and plan to launch new hemp-derived delta-9 beverages strategically in selected markets, including Texas and New Jersey, where we can leverage our existing beverage distribution network. Our hemp-derived delta-9 formulations are complete, and we’re actively developing a target launch strategy to ensure maximum impact.

He told investors that if Tiray could sell the THC beverages that it produces in Canada today in the U.S., it would be a large-sized business.

TLRY beat across all key metrics:

Total revenues of $230Mn vs. FactSet consensus of $225Mn, and EBITDA of $29.5Mn vs. $27.5Mn. It also posted positive reported FCF for 4Q24 and positive adjusted FCF (ex-one offs) for FY24, as per guidance.

• Sales. Total gross sales (before excise taxes) grew 20% QoQ to $256Mn, driven by growth in B2B sales of cannabis in Canada (branded rec, domestic med, and international were stable), seasonal and organic gains in the alcohol drinks unit, and a rebound in CC Pharma. Of the $42Mn in gross sales seq growth, those three units, respectively, added $9Mn, $22Mn, and $9Mn. Wellness was up $2Mn QoQ. Management noted the domestic B2B ramp in the May qtr was not a “new norm”.

• Profitability: Adjusted gross margins Improved seq from 27.4% to 34.8%, with gains across all four divisions, most notably in drinks (38% to 53%); cannabis also improved to 36.5% from 33.2%. Despite a $6Mn seq increase in recurring cash SGA to $67Mn, adj EBITDA margins increased seq from 5.4% to 12.8%.

• Balance sheet and cash flow: Reductions in convertible debt and use of the at the market equity facility, helped to lower net debt to $61Mn (Cash $261Mn; financial debt $322Mn). Net debt is manageable at 0.1x sales (fiscal 4Q24 annualized) and 2x EBITDA. Reported FCF (different from the company metric of adj FCF) for 4Q24 was +$21Mn vs. negative $25Mn in 3Q24, mainly due to improved earnings trends and working capital.

Irwin Simon Interviews: Fox, After Earnings & TDR

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.foxbusiness.com/video/6360056585112&ved=2ahUKEwj4q8y55eOHAxVGMdAFHS4MHisQ0PADKAB6BAgVEAE&usg=AOvVaw347opMoucebTQ2HMMujQ-F

https://www.youtube.com/playlist?list=PLpxc5nzHGn_JMOCm4PKVaUvDlNaFw_9Yt

https://www.youtube.com/watch?v=sYdsWltnRP8