Canadian cannabis licensed producer Tilray Brands is consolidating its cultivation and pre-roll production operations in a bid to save approximately $10 million annually beginning in fiscal 2028, as sales in its cannabis segment continue to decline.
The Ontario-based company also raised its fiscal 2027 earnings forecast, now expecting adjusted earnings of $70 million to $75 million, up from its previous estimate of $68 million to $75 million.
Tilray’s stock rose in early trading Monday following the announcements. The company trades on the Nasdaq under the ticker symbol TLRY.
How will consolidation affect Tilray’s bottom line?
The restructuring will shift cultivation from Tilray’s Foss facility in Fenwick, Ontario, to Masson, Quebec, and pre-roll manufacturing to Cayuga, Ontario. Tilray said the consolidation aims to reduce overhead and improve margins in its Canadian cannabis business.
The company expects to end operations at its Foss facility by Jan. 31, 2027, and achieve the full $10 million in annualized savings beginning in fiscal 2028.
Tilray also expects the Masson facility to increase its annual cultivation capacity from approximately 32.5 metric tonnes to 50 metric tonnes through higher yields and operational improvements.
Pre-rolls account for about a third of Tilray’s Canadian adult-use sales and grew 28% in fiscal 2026, according to the company’s announcement.
“We have built one of the largest and most sophisticated cannabis operating platforms in Canada,” Tilray Chairman and CEO Irwin Simon said in a statement. “Now, our focus is on unlocking its full value. These actions reflect our commitment to operating with greater efficiency, financial discipline and a clear focus on profitability.”
How is Tilray growing revenue despite declining cannabis sales?
Canadian cannabis producers have faced financial pressure for years. Persistent price compression, a heavy excise tax burden and ongoing oversupply have forced producers to close, sell or consolidate facilities.
Despite those challenges, Tilray reported record first-quarter fiscal 2027 revenue of $257.1 million, up 23% year over year. However, its cannabis revenue declined 13% to $56.1 million from $64.5 million a year earlier.
Canadian adult-use cannabis revenue fell to $53.6 million from $64.1 million during the same period.
Growth across Tilray’s noncannabis businesses helped offset the decline, reflecting the company’s broader strategy to diversify its revenue beyond cannabis.
The company operates alcoholic beverage, international pharmaceutical distribution and wellness divisions in addition to its cannabis business. Beverage revenue rose 82% to $101.5 million, helping drive overall revenue growth despite declining cannabis sales.
“We are taking decisive steps to build a more efficient, competitive and profitable Canadian cannabis business,” Tilray Canada President Blair MacNeil said in a statement.
“This stronger operating platform positions us to respond to evolving consumer demand and capture growth opportunities in Canada and internationally where we expect to ship more than 8 metric tonnes of cannabis this fiscal year.”
