What happened
Canadian cannabis company Tilray (TLRY +0.00%) hasn't reported first quarter 2021 financial results yet, but another earnings report in April had an immediate impact on Tilray stock. That helped move Tilray shares down 19.3% for the month, according to data provided by S&P Global Market Intelligence.
So what
Canadian peer Aphria reported its financial update on April 12, and disappointed investors sold off Tilray stock, too, knocking it down 13% on the day. That's because the report was the last one Aphria will put out, as it has now closed a previously announced transaction that merged the two companies into what is now the new Tilray. The newly combined company using the Tilray name is being led by former Aphria CEO Irwin Simon.
Image source: Getty Images.
Now what
According to the company, Aphria's disappointing quarter was caused by pandemic effects that affected sales, resulting in a 6% drop in net revenue compared to the prior year period. Sales in Canada were particularly affected, but there were also effects in Germany.
Combining Tilray and Aphria created the largest global cannabis company by sales. Outside of Canada, Tilray has been growing quickly in Europe, while Aphria already has a presence in the U.S. from its acquisition of craft brewer SweetWater Brewing late last year. That acquisition was partially done to establish a retail infrastructure in the U.S. in preparation for the potential of federal marijuana legalization.
Tilray has been focusing growth internationally in Europe and beyond. It announced a new distribution agreement with U.K. medical cannabis distributor Grow Pharma under which Tilray's pharmaceutical-grade medical cannabis products will be imported and distributed by Grow Pharma in the U.K. Separately, it announced it had exported its first medical cannabis shipment to Spain, and had received the first and only market authorization for medical cannabis products in Portugal. In March, it also received approval from authorities in New Zealand to launch its medical cannabis products across the country.
Tilray shares were affected by Aphria's disappointing quarter, and now the companies are one. Investors will be able to compare how sales for the old Tilray were affected in the first quarter prior to the merger when it reports its financial results, estimated to be this upcoming week.
