Even among marijuana stocks, Tilray Brands (TLRY -2.84%) has performed poorly year to date. Since January, the stock has fallen by nearly 56%. Over the past five years, on a split-adjusted basis, Tilray shares have fallen by over 96.7%.
This comes even as Tilray, now diversified beyond the recreational cannabis market, keeps reporting incremental improvements in operating performance. However, two issues driving Tilray's downward spiral remain unresolved.
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Tilray reported record results, but the stock can't stop sinking
As discussed in Tilray's Q4 earnings release for its fiscal 2026, ended May 31, the company reported a record $915.5 million in revenue, up 11% from the prior fiscal year. Tilray also reported an 8% increase in gross profit, along with an 11.1% increase in adjusted EBITDA, from $55 million to $61.1 million.
However, Tilray is no longer a pure-play cannabis company. Recreational cannabis makes up less than a third of sales. Alcoholic beverages, medical marijuana distribution, and wellness products make up the remainder. Much of Tilray's operational improvement comes from its non-recreational cannabis businesses.
Moreover, while Tilray's results improved slightly, the company's ongoing share-dilution problem continues to outweigh these modest operational gains.
NASDAQ: TLRY
Key Data Points
Further losses likely ahead
On paper, Tilray has a lot more going for it. Management's guidance calls for Tilray's revenue to reach $1 billion this fiscal year, with adjusted EBITDA to improve further. Other strengths include Tilray's large $235 million cash position and nearly debt-free balance sheet, plus the potential from large strategic partnerships, like its upcoming agreement to license and sell Carlsberg-branded beer products in the United States.
But as more important metrics, like GAAP profitability, remain elusive and the share count continues to rise, it's difficult to see Tilray reversing course. Between Jan. 6 and July 26 of this year, Tilray's share count climbed from 116.5 million to 136.2 million. Tilray owns a lot of businesses, but has scant exposure to the U.S. recreational cannabis market.
