Tilray Brands’ 2026 first quarter – covering the all-important summer selling season – was “flat” due to the cannabis and craft beer platform’s Project 420 cost-savings initiative, Tilray chairman and CEO Irwin Simon shared Thursday during a call with investors and analysts.
Tilray’s beverage business declined around $300,000 compared to Q1 2025, with the company generating $55.7 million to start its 2026 fiscal year. Beverage gross profit slipped to $21.3 million in the quarter, down from $22.9 million, as gross margin declined from 41% last year to 38%.
Tilray’s overall net revenue grew 5% year-over-year (YoY), to a “record” $209.5 million for the three-month period ending August 31. However, Tilray’s gross profit fell from $59.7 in Q1 2025 to $57.5 million, as gross margin declined 3 percentage points to 27%.
Simon reminded analysts that the company has removed $25 million in annual costs, including $20 million in SKU rationalization and the closures of three facilities “so far,” as it attempts to achieve $33 million in savings. But “there’s more to go,” he added
“We’re seeing progress,” he continued, but the company has a ways to go on its margins.
Among the biggest issues Tilray has encountered was delisting at retail that began under previous owners, Simon said.
“You saw major declines in these businesses, and we missed the windows of getting these products in the stores,” he said. “Now these windows opened up, and getting these products now re-listed in these retailers is something that we’ve been doing, and that’s why, whether it’s Shock Top, whether it’s Redhook, whether it’s some or other brands, you’re seeing the growth there.
“Let’s all face it, the beer category is not one of the easiest categories out there right now,” he continued. “I’ve said it from the beginning, ‘How do I make beer fun again?’ And that’s something we’re trying to do along the way, make money with that too.”
Simon highlighted “promising results” for many of those craft brands, including dollar sales and market share growth for Shock Top; gains for SweetWater Day Trip IPA and Montauk Wave Chaser IPA; volume and velocity growth for Redhook Big Ballard IPA; 18-pack sales for 10 Barrel Pub Beer; a Hop Valley and the University of Oregon Ducks co-branded IPA; and a partnership between Shop Top and Auntie Anne’s for Twisted Pretzel Wheat.
“We’re making beer fun again and these partnerships and co-branding opportunities offer significant runway for us to widen our markets,” Simon said.
International opportunities for Tilray’s craft beer and non-alcoholic (NA) portfolio are another avenue Tilray is actively chasing. Simon sees opportunities for its craft beers, including international production or potential acquisitions.
The company is also looking to build its Runner’s High NA beer, Hiball energy drinks and Liquid Love canned water in international markets, with a dedicated team to grow those brands and a deal with a U.K. distributor for Hiball.
Simon called the spirits business “tough,” and noted opportunities with new products such as Mock One NA spirits, Mountain Shot mushroom-infused whiskey pouches and Casa Breck tequila, as well as co-branded Denver Broncos spirits.
Tilray is also expanding its intoxicating hemp beverage lines Fizzy Jane’s and Happy Flower to 10mg formats.
Simon added later: “We will be in the beverage business, not just the beer business.”
At the end of Q1 2026, Tilray’s beverage business accounted for 27% of the company’s revenue, down 1% compared to Q1 2025. Tilray’s cannabis and wellness business units were static at 31% and 7%, respectively, of total revenue. The company’s distribution business accounted for 35%.
Driving Tilray’s overall Q1 net revenue growth were gains in its cannabis (+5% YoY, to $64.5 million), wellness (up to $15.2 million, from $14.8 million) and distribution (up to $74 million, from $68.1 million) business units.
Although net revenue grew for Tilray’s cannabis business, its gross profit declined to $23.3 million, down from $24.2 million YoY.
Tilray reported gross margin declines in its cannabis (36% in Q1 2026, compared to 40%) and distribution business (11%, compared to 12%). Wellness gross margin was static at 32%.
Following a $34.7 million net loss in Q1 2025, Tilray reported net income of $1.5 million. Adjusted net income of $3.9 million marked a $10 million YoY gain compared to a $6.1 million loss last year.
Tilray touted its improved balance sheet and $264.8 million cash balance that it said provides the company “with great flexibility for strategic opportunities,” signaling an ongoing interest in M&A. The company’s outstanding debt stands at $7.7 million.
Here are additional highlights from the call:
On the possibility of U.S. cannabis rescheduling: Recent events in the U.S. have led to growing hope for medical cannabis in the U.S., Simon said. The U.S. market opportunity is estimated at $10 billion, with Tilray eyeing a 3% to 5% share, he added.
Tilray is positioning itself to take advantage if federal rescheduling comes to fruition, Simon said. He pointed to more than “200 million-plus metric tons of cannabis grow” and the company’s medical infrastructure in Canada, as well as the medical research and $100 million of medical cannabis sales in Europe.
“Taking that know-how and transferring to the U.S. is something that’s readily available,” he said.
Tilray’s balance sheet also gives the company with “an opportunity to partner with a pharma company, or there was something opportunity for us to buy, we’d be ready and willing and able to do that.”
On the Canadian cannabis market: Tilray Canada president Blair MacNeil shared that overall market pricing declined 1.3%, but volume increased 6.5%, while Tilray’s pricing increased 2% and its volume paced “ahead of the market” during the quarter.
Even though the market has matured, there are “still very healthy growth rates,” MacNeil said.
Tilray expects the regulatory environment in Canada, including excise taxes and greater market access to sell drinks in restaurants and independent retailers and liquor stores, Simon said. They’re also hoping medical cannabis will be allowed to be sold through drug stores.
On Tilray’s $1 million in digital assets: Tilray acquired Bitcoin tokens about four months ago, Simon shared.
Tilray chief information officer Lloyd Brathwaite added that the company is exploring adding Ethereum and Solana, as well as other opportunities such as accepting Bitcoin on its website and tokenizing some stock.
“We see the opportunity. We see the synergies with our products, with our investors, and we’re not becoming that crypto company out there,” Simon clarified.
As of press time Thursday, Tilray stock (TLRY) had crossed the $2 threshold at $2.07.