💸 The Tape

Tilray recently announced its second-quarter results, reflecting moderate progress across its diversified business segments. Net revenue reached $211 million, representing a 9% increase year-over-year. This growth was partly driven by the beverage segment, which posted a 36% increase in net revenue to $63 million. Meanwhile, cannabis net revenue saw a slight decline from $67 million to $66 million, though margins in that segment improved to 35%.

A key aspect of Tilray’s strategy involves its ongoing Project 420 plan, designed to streamline operations within the beverage category. The company has acquired several craft breweries and distilleries—such as Montauk Brewing and Breckenridge Distillery—over recent years. To address overlapping and slower-selling products, Tilray implemented a “SKU rationalization” process, which reduced net sales by roughly $8 million so far this fiscal year. Management anticipates that eliminating underperforming items will benefit margins and support the introduction of new product innovations, although it has temporarily impacted revenue.

Tilray emphasizes that these short-term reductions in revenue are a strategic trade-off. By focusing on higher-potential products and actively managing its portfolio, the company aims to foster better returns in the long run. As of the end of this quarter, about $17 million of the targeted $25 million in cost synergies had been realized under Project 420. However, some of these savings have been reinvested in marketing, promotion, and infrastructure for newly acquired brands.

The company reported a net loss of $85 million, with $75 million of that figure related to non-cash or one-time items such as foreign exchange losses, amortization, and stock-based compensation. Adjusted net loss was $2 million for the quarter. Adjusted EBITDA stood at $9 million, slightly lower than the $10 million reported for the same period last year, partly due to SKU rationalization costs.

Tilray continues to invest in non-alcoholic beverages, craft beer, and spirits, while also maintaining a presence in cannabis through both recreational and medical channels. Management remains focused on upcoming product launches and growing its consumer base, noting that while near-term earnings may be affected by portfolio adjustments, the goal is to achieve stronger revenue and margin performance over time.

Join us at 3pm as Irwin Simon and Raj Grover will both be on Trade To Black.

📈 Dog Walkers

Ascend Wellness Issues Fresh Notes

Ascend Wellness is tapping the debt market again with a plan to raise $15 million in fresh 12.75% Senior Secured Notes, piggybacking on a $235 million note issuance from July 2024. Priced at 97% of face value, these notes mature in 2029 and will fund expansion, including 20 additional stores—boosting retail footprint by about 50%. CEO Sam Brill touts the strategy as a recipe for denser market reach and improved margins, aiming for sustainable cash flow and shareholder value. Ascend’s lenders are reportedly on board, adjusting existing loan terms to permit the new issuance. Closing is expected around January 13, 2025.

NY Is Looking To Enact Real Psychedelic Reform

New York lawmakers are doubling down on psychedelics reform, with Assemblymember Linda Rosenthal’s latest bill aiming to legalize psilocybin, ibogaine, mescaline, DMT, and more for adults 21 and older. The proposal removes these substances from the state’s banned list, shields them from federal enforcement cooperation, and prevents localities from outlawing them. Users wouldn’t lose licenses or public benefits, either. This follows parallel bills championing psilocybin therapy, reflecting a broader push to pivot from the “failed war on drugs” to a more evidence-based approach.

🗞️ The News

Jimmy Carter’s Grandson Touts Late President’s ‘Prophetic’ Call For Marijuana Decriminalization

New York Bill Would Legalize Psychedelics Like Psilocybin, Mescaline And Ibogaine

Cannabis industry relief efforts underway as wildfires rage across Los Angeles area

Florida judge rules against marijuana dispensaries at gas stations

📺 YouTube

Weekly Recap: Boris Jordan Explains Cannabis Growth for 2025 | Trade to Black

What we covered:

✅ On our latest Trade to Black, we recap the biggest highlights and news for the week.

In case you missed it, Curaleaf (OTC: CURLF) CEO and Chairman Boris Jordan joined us to share his thoughts on the Trump administration and whether cannabis reform will be implemented this year. He also addressed how big THC hemp-infused beverages will grow in 2025, and why this will be a major component for Curaleaf and cannabis companies in 2025.

Additionally, Dan Ahrens from AdvisorShares (NYSEARCA: MSOS) joined us to tackle investor concerns about the liquidation of $MJUS, and how the ETF had only $69m in total assets, with one investor holding almost 95% of the fund.

One last thing—big episode coming up tomorrow! Both Irwin Simon from Tilray (NASDAQ: TLRY) and Raj Grover from High Tide (NASDAQ: HITI) will be joining us at a special time, 3 PM EST.