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A worker checks cannabis plants at a Tilray facility in Cantanhede, Portugal, on April 24, 2019.RAFAEL MARCHANTE/Reuters

Part of cannabis and investing

Pot producer Tilray Inc. reported a bigger quarterly loss on Tuesday, as it ramped up investments to boost production in an attempt to grab a larger share of the nascent cannabis market and expand internationally.

The company’s cost of sales, or the cost related to pot production and its supply, rose more than sixfold to $33.6-million in the second quarter from a year earlier.

Shares of the company were down 2 per cent after the closing bell.

The results came on the back of increasing demand in the Canadian cannabis sector, which has faced supply constraints.

Canada became the first Group of Seven country to legalize recreational marijuana in October, but sales have been dampened by supply constraints and prices that are higher than those on the black market.

The larger players, such as Canopy Growth Corp., Aurora Cannabis Inc. and Tilray, have spent heavily to bridge the supply-demand gap, often resulting in bigger losses, spooking investors waiting for any sign of profitability.

Tilray said total kilogram equivalents of cannabis sold in the second quarter surged nearly 270 per cent to 5,588 kilograms, while average selling price per gram fell from $6.38 a year earlier to $4.61.

The company’s net loss widened to $35.1-million, or 36 cents a share, in the quarter ended June 30, from $12.8-million, or 17 cents a share, a year earlier.

Excluding items, the company posted a loss of 32 cents a share, it said.

Analysts on average had expected a loss of 25 cents, according to IBES data from Refinitiv.

Revenue rose to $45.9-million from $9.7-million, beating the average analyst estimate of $41.1-million.