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Good Monday and welcome to this week’s cannabis roundup! Nicolás Rodríguez and Patricio Liddle here, reporting to your inbox to unpack Tilray’s shareholder lawsuit, Trump’s push for Matt Gaetz as Attorney General, and the latest Q3 earnings from industry giants. Grab your favorite strain and scroll down for all the buzz.

Tilray's Voting Drama: Suit Claims Shareholder Misdirection

Tilray (NASDAQ: TLRY) faces a fresh lawsuit alleging it misled shareholders on voting requirements to boost share limits in 2023 and 2024. Plaintiffs argue deceptive practices, while Tilray insists on compliance with Delaware law. ISS supports the move, but the drama might ignite another fiery debate at the upcoming meeting.

Trump Says Yes, So Does Cannabis Industry

President-elect Trump’s nomination of Matt Gaetz for U.S. Attorney General has stirred controversy, but the cannabis industry seems enthusiastic. Gaetz, known for his vocal support of cannabis reform, has pushed for military cannabis use leniency and criticized Congress for stalling banking legislation. Industry leaders like Curaleaf’s (OTC: CURLF) Boris Jordan praised Gaetz’s efforts, sharing clips of him challenging the DEA. Despite his support, securing Senate confirmation looks tough, needing 51 votes amid opposition. Trump remains firm, reportedly “all in” on the choice, signaling a potential pivot toward cannabis reform in his administration’s agenda.

Notably, Republican Senators Lisa Murkowski and Susan Collins have expressed doubts about Gaetz's suitability for the role, with Murkowski stating she doesn't "think it's a serious nomination." Additionally, the Senate's narrow Republican majority means that losing just four GOP votes could derail the nomination, especially if all Democrats oppose it. While Trump’s loyal base may push for confirmation, the Ethics Committee's pending report on Gaetz’s past allegations remains a significant roadblock. Yet some Republicans might defer to Trump’s picks as a show of loyalty.

From TILT to Gold, Cannabis Giants Crunch the Numbers

The latest Q3 earnings from cannabis companies highlight an industry grappling with cost pressures and shifting strategies, but there’s a clear trend emerging: diversification and strategic restructuring amid shrinking gross margins. The results signal a pivot away from the volatile cultivation segment towards product innovation, retail expansion, and brand optimization — a necessary evolution as companies aim to stabilize EBITDA in a challenging market landscape.

TILT Holdings (OTC: TLLTF) reported a 40% drop in revenue to $27 million, with a net loss widening to $12.6 million. A dip in gross profit to $3.8 million, coupled with logistics challenges, pulled gross margins down to 14%. Adjusted EBITDA swung to a loss of $1.6 million from a gain last year.

Greenlane (NASDAQ: GNLN) also faced headwinds, with a 66% revenue drop to $4 million. Yet, restructuring efforts helped narrow its net loss to $3.8 million, a stark improvement from the $10.1 million loss in the previous year. Gross margin soared to 75%, up 48.4%, showcasing the impact of its strategic shift.

Rubicon Organics (OTC: ROMJF) posted revenue of $9.99 million, up 34% year-over-year. The company achieved a gross profit of $3.26 million and a positive adjusted EBITDA of $1.48 million, underscoring its successful premium product strategy. Avicanna (OTC: AVCNF) showed improved financial metrics, reporting Q3 revenue of CA$ 6.27 million, which converts to approximately $4.64 million. Gross profit stood at $2.74 million, while adjusted EBITDA loss narrowed to $0.22 million. Net loss decreased to $0.58 million, reflecting successful cost optimization.

Meanwhile, Lowell Farms (OTC: LOWLF) struggled with a 48% revenue drop to $3.2 million, and reported a negative adjusted EBITDA of $2.1 million, highlighting ongoing challenges in the California market. Gold Flora (OTC: GRAM) emerged as a standout, with adjusted EBITDA leaping 241% to $2.8 million and gross margins solidifying at 41%, despite a net loss of $18.9 million. 

C21 Investments Inc. (OTC: CXXIF) delivered a solid Q2 performance, driven by robust retail growth at its South Reno dispensary. Revenue rose 14% quarter-over-quarter to $7.5 million, while the gross margin improved to 43.5%. Adjusted EBITDA surged to $1.3 million, and the net loss was narrowed to $845,000, indicating effective cost management.

Vireo Growth Inc. (OTC: VREOF) reported a revenue increase of 2% year-over-year to $25.2 million. Gross profit fell by 6.6% to $12.3 million, with a reduced gross margin of 49%. Adjusted EBITDA dropped 19.4% to $5.7 million, reflecting higher operational costs. Nonetheless, Vireo secured a $10 million financing commitment to support the upcoming launch of adult-use sales in Minnesota.

In contrast, Grown Rogue (OTC: GRUSF) saw a revenue bump of 7% to $7 million, maintaining a strong EBITDA margin of 30% despite pricing pressures. The company reported a reduced net loss of $667,240, signaling resilience.

Stories In The Spotlight:

• Cannabis Could Save $29 Billion Per Year In U.S. Healthcare Costs, Says CEO

• Medical Cannabis And Legal Cocaine: The Unusual Permit That Puts Border Laws In Check

Our Writers Today

Nicolás holds a B.A. in International Relations, an M.A. in International Affairs, and an M.Phil in Public Policy. He is a doctoral student in Public and Urban Policy at The New School in New York City. After working for the United Nations in 2014, Nico pivoted his research to studying the relationship between the cannabis industry and economic development.

Patricio is a development economist with extensive experience in IT, finance, and banking. He writes about the economic and social opportunities obscured by over half a century of failed drug prohibition. Beyond his professional expertise, Pato is a committed advocate for social change, passionately working to promote harm reduction and reform drug policies.

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