Global cannabis firm Tilray generated $513 million in net revenue — a 27% increase year-over-year — during the company’s 2021 fiscal year, which ended May 31, the company reported last week.
During the fourth quarter, Tilray’s net revenue increased 25%, to $142.2 million, driven by 36% growth in net cannabis revenue, to $53.7 million, according to a press release.
“The last six months have affirmed the sheer size of global opportunities ahead of us, just as importantly the effectiveness of a committed and passionate group of team members in building the leading consumer packaged goods business in the cannabis industry,” Tilray CEO Irwin Simon said during the company’s earnings call on July 28.
“Beyond what we have achieved over the last six months, our perseverance during [the] COVID crisis itself lends further validation to the fact that this team knows how to pivot, execute and get results at the highest level,” he continued. “We lost well over $100 million in revenue as a result of retail store closures in COVID general impact, and yet we immediately implemented cost saving measures, ultimately helping us build EBITDA to more than $40 million in 2021.”
The growth year follows Tilray’s merger with Aphria, creating the world’s largest global cannabis firm, valued at $8.2 billion. The merger was announced in December 2020 and completed in May 2021.
The merger included the ownership of Atlanta’s Sweetwater Brewing Company, which was purchased by Aphria weeks before. Tilray reported $15.9 million in net beverage alcohol revenue from SweetWater in the 2021 fiscal year, which lagged behind the brewery’s pre-COVID sales, according to Simon.
SweetWater reported 226,639 barrels sold in 2020, a 13% decline compared to 2019 when it produced 260,420 barrels, according to the May/June 2021 New Brewer by the Brewers Association.
Adjusted beverage alcohol gross profit for Tilray was $10.6 million in Q4, driven by off-premise sales as on-premise establishments continued to face COVID-19 restrictions and shutdowns. The beverage alcohol segment made up 6% of the company’s revenue for the year.
“The SweetWater team clearly did a great job controlling costs, despite softer, off-premise sales due to COVID restrictions,” Simon said during the call. “‘We remain very bullish on SweetWater, both from a standpoint of expanding its top-line through new products and greater distribution, but also because of the high margin nature of this business and what it could contribute to our overall profitability over time.”
Simon said Tilray intends to expand SweetWater’s presence in Canada, as well further throughout the U.S. In July, SweetWater announced the acquisition of a 32,450 sq. ft. production facility and taproom in Fort Collins, Colorado, which previously housed Canada’s Red Truck Brewing Company. Simon said the facility will be used to produce SweetWater products and help expand the brand into western states.
Simon also expressed interest in expanding Tilray’s overall beverage company portfolio, noting the company’s intent to acquire additional businesses in the “alcohol area or the beverage business that would complement SweetWater.”
He said the company wants to see half a billion dollars in sales in consumer packaged goods, which would include “conventional” beverages, as well as CBD, hemp, and THC products. However, Simon didn’t offer a timetable for reaching that goal.
“We think alcohol is growing in the (sic) 3% to 5%,” he said. “We think we can bring a lot of new products to it, like we’ve done so far with SweetWater.”
Simon also teased further product offerings across its companies, including CBD drinks and ready-to-drink canned cocktails and canned wine. In June, Sweetwater and Tilray’s Broken Coast brand launched the company’s first co-branded beer, BC Lager. The lager does not contain cannabis or have a cannabis flavor but is inspired by the Broken Coast brand and some of its strain offerings, featuring aroma notes of Key lime pie and orange zest.
Cannabis-related operations made up 39% of Tilray’s revenue for the fiscal year, topped only by distribution (54%), according to the earnings call’s supplemental slides. Pending federal legalization of cannabis in the U.S. — which Simon is optimistic will happen within 24 months — Tilray has the goal of reaching $4 billion in revenue by 2024.
Meanwhile, Tilray offered details of Simon’s compensation package as board chairman and CEO.
As part of his employment agreement, effective May 1, 2021, Simon received a one-time cash bonus of $10 million as well as a one-time equity grant valued at $15 million. His annual salary is set at $1.7 million, with an annual bonus targeted at 200% of that base salary, limited to 350%. For 2021, the Compensation Committee set his bonus at at least $1.56 million, to be administered no later than August 15, 2021, according to the agreement.