Meanwhile, Nebraska lawmakers have proposed a lower tax rate for CBD after their initial offer was criticized, and unionized cannabis workers are preparing to strike on 4/20 as they seek improved benefits.
Stay up to date on the latest news, trends and policy developments in the cannabis industry with our round-up below.
The company’s alcohol net revenue surged by an impressive 165 percent year-on-year and accounted for approximately 80 percent of Tilray’s total net revenue increase. The rise was primarily driven by the acquisition of new craft brands.
Tilray’s financial report also highlights declining distribution net revenue, which sank by 13 percent year-on-year, coupled with a 1 percentage point decrease in profit margins. This contributed to a loss of US$0.12 per share, and the company no longer expects to generate positive adjusted free cashflow for its 2024 fiscal year.
Management has attributed the company’s results to delayed cash collection from various asset sales, signaling that profits are still anticipated, but will likely materialize later than initially anticipated.
Nevertheless, shareholders appear unimpressed with Tilray’s performance. The Q3 report came out before markets opened on Tuesday, and NASDAQ-listed Tilray shares began the trading day 18.53 percent below the previous day’s close. Shares had fallen a further 2.61 percent by the end of the day, and had hit US$1.82 by Friday’s (April 12) close, down from a US$2.59 price point at the beginning of the week.
Last month, lawmakers in Nebraska gave preliminary approval to a large tax act that came with a series of tax rate increases, including the 100 percent tax rate on CBD and hemp products, as part of a broader effort to generate US$182 million in new revenue and help offset high property taxes for residents.
This compromise aims to strike a balance between the need to generate revenue for the state and the concerns businesses and consumers have about the affordability and accessibility of CBD and hemp products, which have no intoxicating effect and are primarily used medicinally or in textiles.
It remains to be seen how the new tax rate will impact the market for CBD and hemp products in Nebraska if the bill is passed; however, the amended bill represents a compromise that seeks to address the concerns of all stakeholders. A final reading and vote is expected next week.
The planned strike is a response to stalled contract negotiations and a rejected proposal on March 19. Workers have been advocating for improved wages, benefits and mileage reimbursements, but have been unable to reach a deal with the company over these key issues, leading drivers and depot workers to vote to authorize a strike on April 2.
“Our proposals are perfectly reasonable; we just want to be able to pay our bills on time,” said Ron Swallow, a Van Nuys depot delivery driver and member of Local 770’s negotiating team.
“Eaze/Stachs’s billionaire financial backers have been getting richer off our labor while company management has cut hours, raised health insurance premiums, and eliminated security officers. Cannabis delivery depots are not the safest environments for drivers, who carry a lot of cash and product,” he added.
The situation highlights ongoing tensions between labor and management in the cannabis industry, as employees seek better working conditions and living wages in a growing sector with unique, industry-specific challenges — such as shifting legal landscapes, complex regulations and significant tax burdens.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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