The chief executive of Tilray Inc. said the U.S. midterm election results, subsequent departure of Attorney General Jeff Sessions and a Senate farm bill have left him optimistic about future prospects for the cannabis industry in the U.S.
Speaking on a conference call with analysts following the release of third quarter results, chief executive Brendan Kennedy pointed to several different results from last week’s midterm elections that he said are “positive signs” for the cannabis industry, including the defeat of Texas Congressman Pete Sessions. Sessions, a Republican congressman who was chairman of the House Rules Committee, had prevented medical and recreational cannabis bills from coming before the House floor for a vote, Kennedy said.
“We are optimistic that without Pete Sessions we will start to see more bills come out in the next congress,” he told analysts.
“I think that, along with Jeff Sessions – the drug war dinosaur – no longer being attorney general are all positive signs for this industry.”
Kennedy also expects that a provision legalizing hemp cultivation will be included in a farm bill currently making its way through the Senate, which could open the door to make CBD products more widely available in the U.S. Kennedy said the company will “very quickly” deploy capital to the U.S. should the farm bill pass, and that the company has $500 million in cash to invest.
“There were a lot of big developments over the last few weeks,” the chief executive said, also pointing to voters in Michigan deciding in favour of legalizing recreational cannabis.
“We’re optimistic about the long term prospects in the United States.”
Kennedy’s comments came as Tilray, which details its results in U.S. dollars, reported stronger revenues in the three month period ending Sept. 30, before recreational cannabis was legalized in Canada. The company’s revenues increased by 86 per cent from the same time last year to $10 million in the third quarter.
At the same time, Tilray reported a net loss in the third quarter of US$18.7 million, or 20 cents per share. Chief financial officer Mark Castaneda attributed the loss in part due to increased operating expenses and expansion of international teams.
The company also sold 1,613 kilogram equivalents of cannabis in the third quarter, more than double the 684 kilograms it sold last year. The average net selling price per gram came in at $6.21, a decrease from $7.53 in 2017, which was primarily due to an increase in bulk sales as a percentage of revenues, the company said.
The B.C.-based company’s stock has been one of the most volatile pot performers with its shares soaring at one point in late September to a whopping $300 per share – an increase of more than 1600 per cent since its July initial public offering. The stock closed Tuesday at $111.55 per share, a decline of 1.8 per cent. Tilray boasts a market capitalization of $10.5 billion.
Tilray was not the only weed company that reported earnings this week. Aurora Cannabis reported better-than-expected results on Monday, with $29.7 million in revenue, a 260 per cent increase from the same period a year earlier. Cronos Group Inc., Canada’s fifth largest cannabis company, reported a $7.27 million net loss on Tuesday. Canopy Growth Corp. will release results on Wednesday.