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Tilray Aligns With Breakthru Subsidiary Kindred Partners

May 12, 2020

Kindred Partners and Tilray have entered into a brokerage agreement for the Canadian market. Kindred, the wholly-owned Canadian cannabis subsidiary of Breakthru Beverage, will act as Tilray’s exclusive sales agent for their recreational portfolio across all of Canada, excluding Quebec. Kindred intends to leverage industry knowledge, a strong sales team, and brand-building services to grow Tilray’s footprint across the country for its brands like Canaca, Chowie Wowie, Marley Natural, and The Batch.

Meanwhile, Tilray saw quarterly revenue grow 11% sequentially in the three months through March, with sales reaching $52.1 million. Revenue more than doubled compared to the same period a year ago, with every sector of the business up by double-digits. Adult-use sales reached $20.9 million, up 23% from the prior quarter, and hemp totaled $21.3 million. Tilray also earned $5.8 million from international medical marijuana sales, making it a larger segment of the business than domestic medical.

However, Tilray is still struggling to contain its losses. The company logged an operating loss of $71.2 million, which it attributed primarily to growth initiatives. The operating loss is compounded by a change in fair value warrant liability that added another $72 million to the loss for the quarter; all told, net loss reached $184.1 million. The business looks significantly healthier in adjusted EBITDA terms, where the loss was only $19.7 million, and Tilray has set the goal of achieving positive adjusted EBITDA by the end of the year.

During the quarter Tilray tapped Jon Levin, formerly of Revlon, as COO and hired Molson Coors veteran Michael Kruteck as CFO. Tilray says it has seen no material impacts related to Covid-19 to date but has enacted response protocols and contingency plans that include enhanced safety measures like increased employee spacing at its production facilities and remote work for office staff.—Danny Sullivan

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