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Is There a Cannabis Market Mini Boom Right Now?

Dave Jackson Dave Jackson, Stockhouse
9 Comments| July 29, 2021

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Click to enlargeShares of Nanaimo BC-based cannabis licensed producer (LP) Tilray Inc. (TLRY) (NASDAQ: TLRY) surged the most in more than five months, earlier this week, as investors rewarded the cannabis company for profiting even amid challenges of COVID-19 restrictions.

TLRY’s net income was north of $33 million for Q4 ending May 31st, compared with a loss of $84.3 million in the year-earlier period, while EBITDA almost quadrupled to more $12 million, the company said in a statement Wednesday. It was the company’s first quarterly report since it combined with Leamington, ON-based Aphria Inc. to create a “cannabis superpower” back in December 2020.

Irwin D. Simon, Tilray’s Chairman and Chief Executive Officer, commented:

“Early results from the new Tilray affirm that, while the global cannabis market remains in its early stages, our vision, scale, access to resources and operational excellence position us optimally to capitalize on the opportunity. In a very short period of time since our business combination was finalized, we transformed and strengthened Tilray, delivered solid results amid continued COVID-19 lockdowns and restrictions and achieved $35 million in synergies to date – well on our way to delivering $80 million in cost savings over the next 16 months.”

Tilray rose 24%, the most since mid-February, to $15.71, and the shares had risen 54% so far this year through Tuesday.

Canadian Cannabis Sales Doubled In 2020, Topping $2.5 Billion

Last year saw triple-digit growth in Canada’s adult recreational cannabis market. According to the Brightfield Group’s “Canadian Cannabis Market” report in April, this was largely powered by:

  • Increased brick-and-mortar retail access – especially in Ontario, BC, and Quebec
  • An expansion in online e-commerce and click-and-collect offerings
  • Price-points that have become more competitive with the illicit market
  • Retailers and consumers adapting to the COVID pandemic context, prompting vast growth despite an unprecedented backdrop of lockdowns and store closures.

Another effect in the min market boom was the rise of value brands – such as the release of HEXO Corp’s (TSX: HEXO) ‘Original Stash’ brand as far back as October 2019.

Today, as the product selection continues to diversify and prices became more even cost-competitive in the Canadian cannabis market, a continuing array of value brands emerges.

With lower prices, the market has witnessed increasing customer conversion from illicit to legal markets.

New to investing in Cannabis? Check out Stockhouse tips on How to Invest in Cannabis Stocks and some of our Top Cannabis Stocks.

For more of the latest info on Cannabis, check out the Cannabis Trending News hub on Stockhouse.

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