November 13, 2018 / 9:09 PM / a month ago

Cannabis firm Tilray shares pull back on bigger-than-expected loss

TORONTO (Reuters) - Canadian cannabis producer Tilray Inc (TLRY.O) reported an 86 percent jump in third-quarter revenue on Tuesday, but a wider-than-expected loss weighed on shares in after-hours trading.

Revenue rose to $10 million (13.24 million Canadian dollars) in the three months ended Sept. 30, the Nanaimo, British Columbia-based company said in a statement.

But the company’s net loss grew to $18.7 million, or 20 cents a share, from $1.8 million, or 2 cents, in the year-ago period. Analysts had expected a loss of $12.7 million.

Tilray’s biggest expense was $11.2 million for stock-based compensation, according to its statement.

Shares of Canada’s most highly valued cannabis producer, which listed on the Nasdaq in July, initially rose in after-hours trade, but were last down 4.1 percent to $106.05.

The stock had closed 1.7 percent lower at $111.55 on Tuesday, compared with its initial public offering price of $17.

Tilray and other Canadian cannabis firms have been ramping up production at home and expanding overseas to position themselves for legalization of recreational use in Canada and approvals of medical use around the world.

The reporting period also preceded the Oct. 17 start of legal sales of recreational cannabis in Canada.

Tilray has agreements with eight Canadian provinces to supply their recreational cannabis markets. It also sells medical marijuana products on its own, with partners or through export deals, in countries including Australia, Germany, Portugal, Argentina, Chile, South Africa and Britain.

Tilray said total kilogram equivalents of cannabis sold surged over twofold in the quarter to 1,613 kilograms. The average selling price per gram fell to $6.21 from $7.53 a year earlier, as higher bulk sales pushed down margins.

Gross margins fell to 31 percent from 55 percent a year ago, the company said.

Reporting by Nichola Saminather; editing by Richard Chang and G Crosse

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