Tilray Brands (NASDAQ: TLRY) slightly up 0.77% to trade at $3.29 in early trading session as the firm had a disastrous year in 2022. Tilray’s shares have lost 58% of their value this year, thanks to the prolonged bear market in growth stocks and the hurricane-force headwinds striking the cannabis industry.
Tilray Brands (TLRY) has had a year to forget in 2022, and because to the prolonged bear market in growth companies, combined with the hurricane-force headwinds that have just slammed the cannabis industry, Tilray’s shares have lost a staggering 58% of their value.
Most researchers predict that worldwide cannabis sales will exceed $248 billion by the end of the decade. Tilray appears to be a strong contender to be in that small group of companies vying for top-dog status in the global cannabis industry by 2030, with an international footprint that currently spans 21 countries, multiple jumping off points in play for when U.S. sales become federally permissible, and an ongoing build out of a diverse and stable revenue stream.
Tilray’s stock has been under pressure this year as a result of its declining share of the Canadian cannabis market, its continuous expansion into risky markets such as craft beer and spirits, and its failure to generate positive free cash flows on a quarterly or annual basis.
The core of the matter is that, due to the very competitive nature of the Canadian cannabis market, Tilray, among others, has been compelled to diversify into substantially similar areas of the consumer-packaged products business, such as alcohol. While this strategic shift appears prudent given the adverse dynamics occurring in the Canadian marijuana industry right now, this diversification strategy hasn’t been well received by investors for two reasons.
To begin, Tilray’s spending has skyrocketed as a result of its SweetWater and Breckenridge purchases. Second, the company’s recent slide in the Canadian cannabis industry might be attributed to its expansion into alcohol. Tilray has lost over half of this major market since the middle of 2021. Although customers’ preference for high-quality, uber-potent artisan brands has likely contributed to Tilray’s declining market share, the reality remains that the firm might have fended off up-and-coming competitors like OrganiGram Holdings if its primary emphasis had been cannabis.