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Psst: Got Any Weed?
Thursday, May 16, 2019

Canadian weed company Tilray ($TLRY) filed its most recent quarterly earnings report this week, and for all the industry enthusiasts’ talk about the potential for revenue and income, another thought struck us while blazing through Tilray’s balance sheet.

Has anyone noticed the inventory these businesses have?

Seriously. Tilray’s inventory went from $16.2 million at the end of 2018 to more than $48.7 million by March 31. The company’s value for “finished goods,” because apparently that’s what we’re calling it these days, rose by 510 percent. Take a look at the disclosure below.



That’s at least enough weed to do a live re-enactment of Pineapple Express. Maybe even a sequel, which is long overdue, by the way.

Legalized weed is still relatively new in Canada (or anywhere else that isn’t Amsterdam), and Tilray is a relatively young company. Since it started filing quarterly statements in mid-2018, however, its inventory has increased dramatically.

Clearly Tilray is also planting a stake in the ground, since its PPE has nearly doubled in nine months too — from $65.7 million last summer, to $129 million today. Most of that investment came in buildings and leashold improvements (up from $51 million to $75 million), or in lab equipment (up from $6.1 million to $20.1 million). Grow operations don’t come cheap, after all.

Those disclosures from Tilray got us wondering — who else has lots of weed? How much do they have? So we kept searching our Company-in-Detail database for more nuggets of information.

Dope Information

There’s Cronos Group ($CRON, naturally); they disclosed $8.5 million in inventory at the end of 2018, most of it as “works in progress,” which certainly puts a new spin on the phrase “growing like weeds.”

Really interesting: Cronos discloses not only the value of its grass, but also the physical amount it has. That means you can reverse engineer the value per ounce. Not that we have any experience with weed purchases. We swear.

Anyway, see Figure 2, below. (Note that the amounts below are Canadian dollars, which we calculate at 1.34 CAD equals 1 USD.)



Assuming 2.2 pounds per kilogram, and at 16 ounces per pound, that’s 6,582 ounces of inventory, valued at $109.70 per ounce — which is, we’re told by smokers who know, “an amazing price.” Then again, we assume there is a markup before anything reaches the retail counter.

Meanwhile, CannTrust ($CTST) reported $25.9 million in inventory, about 45 percent weed and 55 percent extracts. That’s triple the inventory from 12 months ago, when it stood at $8.7 million.

You can find other cannabis businesses (more than you’d expect) either by looking for related firms listed in the upper-right corner of the company you’re studying; or by going to the Interactive Disclosures page and searching “cannabis” in the text-search field.

After that, it’s reefer madness.




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