Canadian cannabis giant Tilray Brands recorded a 1% year-over-year (YoY) net revenue decline across all its business ventures in Q3, but the latest financials are simply growing pains as the company continues to streamline and consolidate its business, leadership shared today during the company’s quarterly earnings call with investors and analysts.
The company recorded $185.8 million in net revenue in the quarter (ending February 28), increasing to $193 million when on a constant currency basis. Tilray CEO Irwin Simon emphasized that Q3 2024 included $6 million in revenue from now discontinued SKUs.
Tilray’s Q3 gross profit increased 5% YoY, to $52 million, while gross margin increased 200 basis points, to 28%. The company also recorded a net loss of $793.5 million in the quarter, due to a $700 million non-cash impairment “as a result of macroeconomic conditions and declines in market capitalization, foreign exchange loss, amortization, changes in fair value of convertible notes receivable, and stock-based compensation as well as non-recurring transaction and restructuring charges.”
Tilray’s bev-alc division – nearly 30% of the company’s total business – posted slightly better results, recording a nearly 2.3% increase in net revenue, from $54.7 million in Q3 2024, to $55.9 million in Q3 2025. Gross margin from Tilray’s 20+ beverage brands increased from 34%, to 36%.
Tilray U.S. beer division president Ty Gilmore highlighted several growth achievements in the quarter by its collection of more than 20 beverage brands, including:
- Shock Top dollar sales +44.8% in Southeast grocery channels;
- SweetWater dollar sales +1% in Southeast grocery channels;
- Breckenridge Brewing dollar sales +2.7% in Colorado;
- Montauk dollar sales +1.7% in the New York metro area and +10.5% in the Northeast;
- Redhook dollar sales +7% in the overall convenience channel;
- Terrapin dollar sales +3.4% in the Georgia grocery channel;
- And Alpine and Green Flash dollar sales +35.5% in California c-stores.
As announced earlier this year, Tilray has created a strategic initiative for 2025 titled Project 420, which includes the prioritization of SKU rationalization, geography and distribution consolidation and portfolio optimization. The company has increased its cost savings target for the initiation to $33 million, with $20.6 million completed so far.
The total revenue impact of Project 420 on the division is expected to be $14 million, according to Gilmore.
Strategic initiatives and SKU rationalization across Tilray’s total business is expected to have cost the company $13.2 million in revenue through the first nine months of the year, and is expected to total $50 million in lost revenue for the full year, with the company now projecting full-year net revenue between $850 million and $900 million.
Part of Project 420 that hasn’t been executed yet is the consolidation of the beverage division’s network of more than 700 distributors, which includes a mix of Molson Coors, Anheuser-Busch InBev (A-B) and independent distributors.
Tilray’s existing network composition is the result of its various bev-alc acquisitions over the past five years, starting with Georgia-based SweetWater in 2020, followed by California-based Green Flash and Alpine and Colorado-based Breckendridge Distillery in 2021; eight craft beverage brands from A-B (Shock Top, Breckenridge Brewery, Blue Point, 10 Barrel, Redhook, Widmer Brothers, Square Mile Cider and Hiball Energy) and the acquisition of Montauk Brewing in 2023; and four craft beer brands from Molson Coors in 2024 (Hop Valley, Terrapin, Revolver and Atwater).
Part of Tilray’s delay in distributor consolidation is that the company had a two-year agreement to maintain existing deals with A-B distributors following the 2023 deal, Simon said. Now, the company is starting to look at where it can make changes, and is considering bringing on a “third party group” to help “get all the costs and efficiencies and make some of the right moves,” he added.
Looking ahead, Tilray is hoping to increase investment across four key areas, including craft light beer, non-alcoholic (NA) beer, spirits and intoxicating hemp beverages.
In the first focus area, Gilmore touted that Tilray “created a new consumer segment, craft light lagers, with the introduction of [10 Barrel] Pub Beer at below core price points.” The company has expanded its presence in the subsegment with SweetWater’s Dive Beer in the Southeast, Blue Point’s Long Island Light in New York and Atwater Light in Michigan. Additionally, the company will be launching Y’alls Beer in Texas through the Revolver brand.
In the NA beer space, Tilray recently added a second SKU, an IPA, to Montauk’s lineup. Additionally, Tilray is continuing to increase distribution of Runner’s High, a new-to-the-world NA beer brand launched in 2024 in specific Southeast, Northeast and Pacific Northwest markets. The offering, targeting consumers with “a truly athletic mind” who want a post-workout NA beer, is now available in 4,500 retailers, Gilmore shared.
For spirits, Tilray is expanding its investment in Breckenridge Distillery’s vodka, gin and bourbon offerings, the latter of which has “proven its strength in the bourbon sector” and is recording growth despite the overall segment declining. Tilray’s spirits innovation will focus on tequila and NA spirits.
And in the intoxicating hemp space, Tilray is adding 420 Fizz to its lineup of beverages that already includes Happy Flower, Fizzy Jane and Herb & Bloom. The new offering is a low-calorie, “sweet and flavorful soda proposition.”
Tilray’s intoxicating hemp beverages have generated $1.4 million in revenue so far in fiscal year 2025, boosted by distribution expansion to more than 1,000 points of distribution across 10 states, including the addition of Florida, Alabama, Georgia, North Carolina, South Carolina, Tennessee, Louisiana and New Jersey, Gilmore shared.
Simon acknowledged that there is still a great deal of “educating consumers” that is required in the intoxicating hemp beverage space on what the beverages are, but “if anyone can do it,” Tilray can, he said, adding that the company has the confidence of some major retailers, including Total Wine & More.
Year-to-date (YTD) through March 22, Tilray’s beer brands have recorded 17.6% decline in dollar sales and 18.3% decline in volume in NIQ-track off-premise channels, according to data shared by 3 Tier Beverages. In the last four weeks, dollar sales have declined 20.3% and volume 21.9%.
However, with past SKU rationalization and distribution and geography consolidation, as well as renewed focus on the on-premise, Simon said, “I wouldn’t look at the craft beer data that’s out there right now.”
“We’ve had to invest in our beverage business to get it where it is,” he added. “A lot of these craft businesses have been around for years and years and years. And fortunately … there’s a lot of beers out there.”
‘No Current Impact’ From Tariffs
Tilray is a global enterprise, but the company said there is “no current impact” on its business due to the U.S.’s recent tariff implementations or trade wars, and the economic climate is “unlikely to substantially affect” the company’s sales or costs, Simon said.
Tilray noted in its financials released that its “American beverage brands are solely manufactured and distributed within the U.S. market,” while in Canada, “Tilray’s cannabis brands are produced domestically for Canadian consumers.”
Manitoba Harvest, its health and wellness CPG company that distributes in Canada and the U.S., is “exempt” from new tariffs, according to Tilray.
‘Fully Invested’ in Improving Stock Price
As reported last month, Tilray’s stock is at risk of being delisted on the Nasdaq, as its stock price has failed to maintain a minimum bid price of $1 per share for more than 30 consecutive business days.
Nasdaq issued a warning to Tilray on March 26. The company has 180 calendar days to become compliant, a.k.a. it has until September 21 to record 10 consecutive days of a common stock closing price of at least $1. If Tilray fails to gain compliance, the company could transfer from the Nasdaq Global Select Market to the Nasdaq Capital Market.
“We are focused on debt, we are focused on balance sheet, we’re focused on generating cash, and we’re focused on our cash situation,” Simon said during Tuesday’s call. “We are shareholders, we’re just not employees here. A big part of our compensation is in equity. A big part of all our net worth is in our stock.
“No, we’re not happy where our stock is, but nobody has given up. Nobody’s going away, and we’re working hard to change that course on our stock.”
Simon added that the company is “100% fully invested in the positive trajectory performance of our stock price.”
When the stock market opened Tuesday, a few hours after the company’s Q3 financials release, Tilray’s stock price was $0.53, five cents below its Monday closing price. As of press, the stock had declined to $0.47, its lowest trading price of the day.
“We’ve had a lot of successes, we’ve had some challenges, we’ve had some failures, but within five years, there’s a lot of points that we put on the board,” Simon added to conclude Tuesday’s call. “So thank you very much for your support, thank you very much for listening to us today, and, like I say, hang in there with us.”