TREND Analysis Tilray – “Gas in the Tank”

From their Notes to Financial Statements: Inventory is comprised of raw materials, finished goods and work-in-progress such as pre-harvested cannabis plants and by-products to be extracted. The costs of growing cannabis including but not limited to labor, utilities, nutrition and irrigation, are capitalized into inventory until the time of harvest. Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Cost includes expenditures directly related to manufacturing and distribution of the products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and the depreciation of manufacturing equipment and production facilities determined at normal capacity. Manufacturing overhead…

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Inventory in the first Q of Rec- Booking Costs and IFRS VooDoo!! Chickens have come home to roost.

I started paying attention and writing about this industry because of my surprise of how you could sell $1 worth of cannabis and show a gross margin greater than the selling price. In my world, that was very new! Yes... IFRS voodoo! The practice of carrying inventory above the lesser of its actual cost or net realizable value. This is done by running an entry through the income statement that GROSSES UP Inventory to a management determined value of no greater than the Selling price less Selling Costs less the costs already incurred. The latter item is on the balance sheet. Then when you…

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Peer Comparisons: Tracking last Q Sales to Inventory on Hand to Start the Next Q

I have spent a lot of time in the Income Statement with the charts I have rolled out, and even a little on the Cash Flow side with EBITDA. I decided to start playing with some graphs that would help determine if an LP would have enough "gas in the tank" [eg. Finished Goods Inventory, WIP and then Bio Assets] to be able to achieve a sales increase in the following Q. With many LP's having had the ability to "stockpile" in advance of Adult Rec, will they have shot their load in the first Q? The Peer Comparison doesn't answer that, but I'll…

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Tilray Q4 F2018 Rundown – Dec. 31, 2018

Open up Fins and MDA and follow along. Tilray has decided to NOT break out Excise Tax in both Revenue and in CoGS.  Figures below are based on their reported sales unless noted otherwise, and in USD [save Peer Comparisons where we have converted USD to CAD].  This results in GM and Opex being understated as % of Sales [as sales is overstated] compared to peers. Sales: Tilray recorded sales of USD 15.5 million in Q4 versus Q3 USD 10 million. Tilray did not break out rec versus medical sales.  Below is the Delta by product segment and by geography. Both Dry Cannabis and…

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