Tilray Inc (NASDAQ:TLRY) Q3 2019 Earnings Conference Call - Final Transcript

Nov 12, 2019 • 05:00 pm ET


Tilray Inc (NASDAQ:TLRY) Q3 2019 Earnings Conference Call - Final Transcript


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Brendan Kennedy

spanning five continents. Over the next two to three years we expect a number of additional countries to legalize medical cannabis followed by adult-use and our global footprint puts us in an advantaged position to enter new markets when we are legally permitted to do so. Let me share some details. In Canada, over the next 12 months, we believe the market has the potential to reach a balance between supply and demand for raw materials including flower and oil. As such we remain confident in our cultivation asset-light model and ability to sign long-term wholesale supply agreements as we focus on the cannabis value chain further downstream. We view ourselves as builders of high-quality trusted brands, not farmers.

Consistent with this we are ready for the second phase of adult-use cannabis in Canada with a broad product portfolio set to launch over the course of the next two quarters as regulations permit. Our expanded portfolio and our High Park includes innovative cannabis products and formats such as CBD beverages edibles and baked products. We will launch new products under celebrated existing brands Marley Natural and Goodship as well as new brands The Batch Chowy Wowie and Remedy. Our popular existing Canadian brands Kennecott and DuPont will also broaden their product offerings. Across the board, we are committed to launching high-quality products that are safe for our consumers. We are eagerly awaiting the commercial launch of this next phase of legal cannabis products to address consumer's desires for our broader selection of legal products and form factors that are safe and tested to meet rigorous quality standards. Internationally during the third quarter, we continued to build inventory at our EU Campus in Portugal as we await additional GMP certifications. We are pleased to announce that we successfully exported our first shipment of medical cannabis from Portugal to Germany in September through a EUR3 million dollar agreement with Can Medical Pharma GmbH to supply patients. This represents a major milestone for Tilray as our EU Campus ramps up international export output through the end of this year.

We are waiting our finished product to GMP certification which we expect by the end of the year. And once received we expect a significant ramp in international revenue on top of the very strong growth we have already seen. As we discussed last quarter in addition to our own 10-acre outdoor crop we grew an outdoor crop with our cultivation partner Esporao on an additional 20 hectares which is the equivalent of roughly 50 acres. We are currently in the early stages of processing this harvest and we will determine yields in the coming weeks. As the progress in Canada and Europe of demonstrates our global growth strategy remains unchanged. First, selectively increase our production and manufacturing capacity to serve the rapidly growing global medical market as well as the adult-use market in Canada and other markets over time. Second, maintain our rigorous focus on quality as we scale. Third partner with established