Pioneering Medical Cannabis Globally


HQ: Nanaimo, British Columbia
Incorporated: 2018
Facilities: Nanaimo, BC. Another opening in Enniskillen, Ontario
Symbol: TLRY (OTC), 2HQF (Franfurt)
Licenses: Cultivation, Production, Sales. Applying for Dealer’s license (for export)
CEO: Brendan Kennedy

Focus: Strong
Research, cultivation, processing, and distribution of medical cannabis internationally.

Market Cap: $6 billion
Enterprise Value: $4.7 billion
Size (mkt cap) within cannabis industry:  2 of 200+
Size among cultivators: 2 of about 40
# of employees: N/A

Markets: Strong
Primary: Canada
Secondary: Germany, the UK, Argentina, Australia, Chile, Croatia, Cyprus, the Czech Republic, New Zealand, South Africa.

Operations: Strong
Cultivation: N/A
Current production: exact figure not available. 100,000 kgs (912,000 sf) by end 2018.
Future production: Max potential is 400,000+ kgs
Distribution: N/A
Direct sales: Yes, it has a large number of current patients

Integration/Diversification: Neutral
Vertically integrated: Yes, cultivation and distribution (not sure how much direct sales)
Horizontally diversified: Not much. Most focus is on cultivation. Some medical R&D,

Financials: Strong
Revenue rank among cultivators: 5th
Revenue growth (YoY): 97%
Net income per share: N/A
Total cost per gram: $6.38
Cost per gram rank in industry: N/A
Cash: N/A

Management: Strong
CEO: Brendan Kennedy
CFO: Mark Castaneda
CMO: Adine Fabiani-Carter
Chief Revenue Officer: Edward Pastorius
Chief Science Officer: Josh Eades
Head of research: Dr. Catherine Jacobson

Branding: Neutral
The company launched a new cannabis brand called CANACA™, celebrating Canadian roots and pride as the country becomes the world’s first G7 nation to federally legalize cannabis for adult-use.

Tilray signed an agreement with Sandoz Canada, a division of Novartis, to create and sell co-branded and co-developed non-combustible medical cannabis products.

Valuation: Neutral
Current share price: $65
Price to Sales:    213 (Tobacco industry = 5)
Price to Book: 137
EV / revenue: 167
EV / revenue rank in industry:  2nd highest out of top 20 cultivators (expensive)

Financings: Strong
The company completed its IPO in July selling 10.3 million shares of Class 2 Common Stock to the public for $17.00 per share. Just a month later, the stock now trades at US$62, a 360% rise. Tilray netted US$163.6 million on the IPO. Proceeds will go to build out cultivation capacity, repay debt, and for future acquisitions and working capital.

Prior to the IPO, it raised US$55 million of Series A funding from institutional investors.

All cannabis stocks present risks due to the relative newness of the company and market. The company is not yet producing real profits, only revenue. It remains to be seen whether Tilray will succeed in the competitive market to emerge as one of the successful cannabis companies in the coming year or two.

Recommendation: Neutral