Tilray's strategy to focus on international expansion while dismissing Canada is very risky, Jefferies says.
's strategy to focus on international expansion while dismissing Canada is very risky, Jefferies says.better-than-expected sales, but missed on the bottom line due to a lack of supply in Canada and high international expansion costs.
"The company's argument is that Canada will soon see oversupply and Canada will be insignificant anyway compared to the EU and US opportunity," Jefferies analyst Owen Bennett said in a note out Tuesday, citing comments from Tilray's management during the company's fourth-quarter earnings call. "We think this is a risky strategy near term given its multiple, especially as investors will be increasingly looking to Canada as evidence of a company's ability to execute, and international is yet to contribute in any material way to sales and yet costs are weighing ," Bennett added.
Tilray debuted for trading on the Nasdaq in July, becoming the first cannabis company to have an initial public offering in the US. Since then, it has sped up expanding its business globally., hoping to commercialize its non-smokable medical-cannabis products, develop new products, and educate pharmacists and physicians about cannabis.
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