IB Net Payout Yields Model

Tilray: Keeping Competition Alive

  • Tilray formed a strategic alliance with HEXO in an odd move to help keep a top Canadian cannabis competitor alive.
  • HEXO just reported another weak quarter where revenues missed expectations, but the company did cut the EBITDA losses.
  • The stock remains far too expensive trading at over 10x actual cannabis sales while the competition in Canada remains fierce.
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The biggest issue with the Canadian cannabis market has been too much cultivation leading to oversupply. The new Tilray Brands (NASDAQ:TLRY) has attempted to consolidate the industry with the acquisition of Aphria, but the sector continues to struggle as much as prior. The new deal to help keep HEXO (HEXO) in business keeps our investment thesis Bearish on Tilray Brands.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Update - Mar. 25

CEO Irwin Simon went on CNBC this afternoon. No real news on legislation other than pointing out how ridiculous the volumes are on the Canadian stocks. Tilray had nearly 300M shares traded today when the usual volume is only 22M shares. 

Finviz Chart

The crazy part is that the actual logical trade is the MSOs, but most institutions can't buy OTC stocks. 


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