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  1. Branding, consumer product opportunities bigger in U.S., Europe - Tilray CEO
  2. Tilray pot sale volumes below competitor
  3. Company invested in Canadian retail and will do more aggressively in coming months

Tilray, Inc. doubled the amount of cannabis that it sold in 2018 versus the prior year after recreational pot was legalized in Canada in October, and the company is focused on expanding in the United States and Europe to capture larger market opportunities as it ramps up its cultivation capacity.

“The United States and the European markets are orders of magnitude larger than Canada. We expect to focus future investments in the U.S. and Europe,” said Tilray chief executive Brendan Kennedy, speaking to analysts on a conference call about the company’s financial results.

“The branding opportunities in the U.S. and Europe … and consumer products are far more interesting than in Canada due to branding and packaging restrictions.”

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The Nanaimo, B.C.-based company sold 6,478 kilograms of cannabis in 2018, more than double the 3,024 kg sold in 2017, but this full-year figure is still 30 per cent lower than what competitor Aurora Cannabis Inc. sold in its last two quarters.

“In the next 18 months, we expect there will be oversupply,” Mr. Kennedy said.

In Tilray’s fourth quarter ended Dec. 31, the first reporting period to include sales from the legalization of recreational cannabis in Canada, Tilray sold 2,053 kg of cannabis at an average net selling price of $10.05 per gram, up from $9.12 per gram the prior year period, the company said.

For full-year 2018, the average net selling price per gram rose slightly to $8.59 (US$6.61) from $8.42 (US$6.52), it reported.

Tilray’s 2018 revenue rose to $56.4-million (US$43.1-million), up 110 per cent year-over-year, while it climbed to $20.9-million for the fourth quarter, which was largely in line with expectations. Revenues were driven by bulk and adult-use sales in Canada and an increase in wholesale distribution in export markets, though the company marked a net loss at US$67.7-million, or 82 cents per share, versus US$7.8-million, or 10 cents per share in 2017.

The company expects to double its cultivation capacity to 2.2 million square feet by the end of 2019, with the ability to expand to a total of 4.5 million square feet on existing production facilities, Mr. Kennedy said.

Despite Tilray’s focus now on European and U.S. markets, the company has taken minority investments in Canadian cannabis retailers Fire and Flower, Innerspirit and Westleaf, "and expect to invest more aggressively in months to come,” Mr. Kennedy said.

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This month, Tilray harvested medical cannabis at its European Union Campus in Portugal and finalized a supply agreement with LiveWell, which is expected to begin shipping CBD isolate and full-spectrum CBD extract to Tilray in the second quarter of 2019.

In February, Tilray bought licensed greenhouse cannabis producer Natura Natural for $35-million and hemp foods maker Manitoba Harvest for up to $419-million, with both deals in cash and stock. These followed December announcements of a joint venture with Anheuser-Busch InBev SA to research cannabis drinks, a collaboration agreement with pharmaceuticals company Sandoz AG, and a $7.5-million investment in Quebec-based cannabis grower ROSE Lifescience Inc.

The company went public on the U.S. Nasdaq in July 2018.

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