Blue Point Brewery Helps Drive Sky High Profits at Cannabis Company Tilray
In a turnaround for Tilray, the company’s recent foray into the craft beer market is proving to be a highly successful move. A year after acquiring a collection of craft brands from Anheuser-Busch, including Long Island-based Blue Point Brewery, Tilray has reported record financial results, marking a 26% net revenue growth.
Blue Point Brewery: A Key Player in Tilray’s Growth
Blue Point Brewery, a beloved staple in the Long Island craft beer scene, has been instrumental in Tilray’s impressive earnings report. As Tilray’s beverage-alcohol division saw a 127% jump in revenue, much of this success can be attributed to the contributions from its new craft acquisition brands.
“These results were driven by our successful execution of our diversification strategy, which we started in 2020, and the hard work of our team,” said Tilray CEO Irwin D. Simon.
Financial Highlights
In its latest earnings report, Tilray revealed a significant boost in its beverage-alcohol gross profit, which soared by 146% to $40.8 million in the fiscal fourth quarter. This leap underscores the positive impact of the acquisition strategy, with Blue Point Brewery standing out as a major contributor.
- Net Revenue: Increased by 25% to $229.9 million in Q4.
- Beverage-Alcohol Revenue: Jumped by 137% to $76.7 million in Q4.
- Gross Profit: Rose to $82.4 million in Q4, up from $67.2 million.
A Record Year for Tilray
For the fiscal year ending May 31, 2024, Tilray reported net revenue of $789 million, with the beverage-alcohol segment accounting for $202 million. This impressive performance is part of Tilray’s broader strategy to diversify beyond cannabis into other lifestyle consumer packaged goods.
“In FY2024, the company achieved remarkable growth across its businesses, with a 26% increase in net revenue over the prior year, record-breaking performance in gross profit and adjusted EBITDA, and generated positive adjusted free cash flow for the fiscal year,” said Simon.
Blue Point Brewery’s Role
Since its acquisition, Blue Point Brewery has continued to thrive, not only maintaining its strong presence in the Long Island area but also expanding its reach under Tilray’s banner. The brewery has hosted notable events, such as its biggest 420 festival ever, drawing crowds and increasing brand visibility.
Tilray’s Market Performance
At the time of writing, Tilray’s stock has surged by 15% following the release of its earnings report. This boost reflects investor confidence in Tilray’s strategic direction and its ability to leverage acquisitions like Blue Point Brewery to drive substantial growth.
Legal Cannabis Sales Impact Beer Revenue, Surveys Show
Despite the good news for Tilray about its beer division, consumer surveys in Canada and the U.S. actually reveal a decline in alcohol consumption where legal cannabis is available, according to a story in MarketWatch. Beer is the most affected, with some impact on wine sales and minimal effect on spirits. Thirty-six percent of cannabis users reported reducing their alcohol consumption, and another study found that 47% had cut down on drinking. Men and younger consumers are more likely to replace alcohol with cannabis, with beer facing the greatest risk. In a 2023 survey, 23% of Canadian cannabis users said they drank less alcohol since cannabis legalization in 2018, up from 10% in 2020. Data also suggest that beer and wine sales may be cannibalized by cannabis in Canada.
No doubt that legal cannabis is lighting up the marketplace and eating into beer sales, yet Tilray is managing to balance both sides of the scale when it comes to these two vices.
“Tilray Brands is leading the convergence of cannabis, beverages, and wellness on a global scale,” the Tilray CEO noted.
