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Tilray hopes to raise $250 million to buy U.S. assets

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Tilray cited potential changes in U.S. legalization for its move to buy assets.

Tilray Brands, Inc. (NASDAQ: TLRY) announced that it has filed an offering for shares of its common stock to raise up to $250 million from time to time through an at-the-market equity program.

Tilray said it plans to use any money raised by selling shares to potentially buy assets in the U.S. as rescheduling inches closer to reality. Tilray was clear that the money was not planned to be used for general working purposes.

This follows the company’s move on May 13, when it announced it expected to issue up to 13.1 million shares of the company’s common stock in exchange for $19.8 million in the principal amount of the 2024 Convertible Notes. Tilray said that after the exchange there would be $330,000 in principal amount of 2024 Convertible Notes that remained outstanding as of May 14, 2024.

U.S. legalization

Canadian firms like Canopy Growth (NASDAQ: CGC) have been targeting U.S. cannabis companies for acquisitions. The Canadian cannabis market is much smaller than the U.S. market and in order for these companies to grow, they need U.S. companies.

The Biden administration has demonstrated its desire to move the legalization process along. On May 16, President Biden announced it was pushing proposed rescheduling to the Federal Register which would spark a 60-day comment period.

Tilray recently reported its earnings as net revenue grew by approximately 30% to $188.3 million, versus $145.6 million in the prior year quarter. Green Market Report reported that Tilray updated its fiscal year 2024 guidance, targeting an adjusted EBITDA of $60 million to $63 million, down from its previous guidance of $68 million to $78 million.

Additionally, the company no longer expects to generate positive adjusted free cash flow for the full fiscal year due to delays in collecting cash from various asset sales. Morningstar also recently lowered its price target for Tilray, while maintaining a four-star rating.

Tilray has over 800 million shares outstanding, which were lately selling at $2.02 a share. The company’s 52-week high was $3.40.

 

 

 

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