Cannabis producer Tilray quietly drops $4 billion sales target for 2024

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

Image of Biocant Research Park, home to Tilray's Portugal cannabis facility.

Tilray's marijuana facility in Portugal is located in Biocant Research Park.

Tilray Brands has quietly abandoned its pledge to achieve annual revenue of $4 billion (5.3 billion Canadian dollars) by the end of 2024, with analysts now predicting the North American cannabis producer will fall far short of that figure.

The company’s management no longer guides for the target, Pablo Zuanic, managing director at New York-based investment banking firm Cantor Fitzgerald, wrote in a note to investors, citing a conference call with Tilray executives in January.

The analyst said Tilray’s target was undone by “delayed” legalization in the United States and Germany plus ongoing issues in Canada, including price compression, overproduction and slowing national sales.

The Leamington, Ontario- and New York-headquartered business isn’t the only cannabis company tripped up by delayed legalization and U.S. reforms as well as other difficulties.

The industry is bracing for a challenging 2023.

In the U.S., Colorado-headquartered Akerna Corp., the parent company of cannabis technology company MJ Freeway, said last week it’s exiting the marijuana industry.

Also last week, Massachusetts-based multistate operator Curaleaf Holdings said it was exiting California, Oregon and Colorado.

In Europe, Colombian cannabis firm Clever Leaves announced its plans to exit Portugal.

A $4 billion target 

Tilray CEO Irwin Simon originally laid out the ambitious $4 billion target in a conference call with analysts in July 2021.

In a subsequent letter to Tilray shareholders on Aug. 26, 2021, Simon detailed his strategic vision to achieve the $4 billion in annual revenue.

“This is the foundation that will be so essential to getting us from our current combined retail market share in Canada of 16% to our goal of 30% share by fiscal year 2024,” he wrote.

However, Tilray’s market share at home has fallen by roughly 50% since then. Tilray now says it controls roughly 8.3% of the Canadian recreational market.

In an email to MJBizDaily, a spokesperson for the North American cannabis, alcohol and pharmaceutical distribution company conceded that federal legalization in the United States and Germany did not play out as the company had expected.

“The $4 billion sales target by the end of (fiscal year) 24 was conditioned upon federal legalization of cannabis in the U.S. – with a projected $100 billion market – as well as adult-use legalization in Germany,” the spokesperson said.

U.S. lawmakers failed to legalize cannabis, or even pass the SAFE Banking Act, which would have protected financial institutions from federal punishment if they served regulated marijuana companies.

Germany, meanwhile, is already falling behind on its commitment to legalize cannabis production and sales.

Tilray recently reported a $61.6 million net loss for the quarter ended Nov. 30, bringing its loss for the six-month period to $127.4 million.

Some experts warn executives to avoid latching on to optimistic scenarios involving federal legalization for any country, given the complex societal, political and economic forces at play.

Tilray has not replaced the guidance on revenue for fiscal 2024, but the spokesperson said the company expects to generate $70 million-$80 million of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and be free-cash flow positive across all business segments.

However, in a 2022 regulatory filing, the company noted that it “began operating in 2014 and have yet to generate a profit.”

Analysts adapt 

Analysts currently forecast Tilray would be approximately 80% short of its now-shelved goal of $4 billion in sales by year-end 2024.

Zuanic, the Cantor Fitzgerald analyst, lowered sales estimates for Tilray to $613.4 million (down from $659.7 million) in 2023 and $675.1 million in 2024 (down from $732.7 million).

Tamy Chen, an analyst for Toronto-based BMO Capital Markets, has been trimming her fiscal 2024 forecast for Tilray.

The BMO analyst now sees the company generating $643 million in sales in fiscal 2024, down from an earlier forecast of $702 million last summer.

Analysts have been slashing their sales forecasts for Tilray ever since its merger with Aphria in 2021.

For instance, New York-headquartered investment banking company Jefferies expected the newly united Tilray to record more than $1 billion in sales in 2022, before lowering that forecast substantially.

Tilray reported net sales of $628.3 million that year.

Tilray’s focus

The Tilray spokesperson said that, with delayed federal legalization of marijuana in the United States, Tilray plans to continue to grow its businesses in Canada, Europe and the U.S.

In Canada, Tilray said, it’s focused on both organic growth and acquisitions as well as growing medical and adult-use cannabis market share.

“In the U.S., we are not simply waiting for federal legalization of cannabis. We’ve invested in leading and profitable CPG brands across craft beverage-alcohol and wellness consumer products,” the spokesperson said.

Tilray’s U.S.-focused businesses include Breckenridge Distillery, Manitoba Harvest and SweetWater Brewing Co.

Tilray recently acquired Montauk Brewing Co., which it says is the fastest-growing craft beer brand in metro New York.

Regarding cannabis production, BMO’s Chen said in a recent note to investors that Tilray’s cannabis cultivation capacity might be too large for the market opportunity.

“Management indicated the lower utilization is temporary,” Chen wrote, “but we wonder if (Tilray’s) capacity will exceed its market opportunity for some time given how slow Canada has been to rationalize the number of LPs, and we believe European rec legalization may take longer than expected.”

Simon said Tilray is considering using excess capacity to grow fruits and vegetables, following an example set by Alberta-based Aurora Cannabis.

The spokesperson said via email that Tilray’s “focus is on driving revenue gains across our diverse portfolio, which will create a strong channel for additional revenue in adult-use cannabis, pending federal legalization.

“This approach allows us to capitalize on the current market conditions and create a strong foundation for future growth in the U.S. federal cannabis industry.”

In Europe, the spokesperson said, Tilray continues to focus on growing the CC Pharma business, which distributes medical cannabis to pharmacies in Germany, and increasing medical marijuana market share in Germany and other markets.

Earlier this month, Tilray cut roughly a quarter of its workforce at its medical cannabis facility in Cantanhede, Portugal.

“We remain poised and ready to leverage our current businesses to be a first-mover upon expected adult-use legalization in Germany and other European markets,” the spokesperson added.

The company’s shares trade as TLRY on the Nasdaq and Toronto Stock Exchange.

Matt Lamers can be reached at