Tilray Is Growing 73% Internationally. The Market Is Paying Almost No Attention. Is That a Mistake?
Key Points
Tilray has shifted from a marijuana company to a brand manager.
The company's new model has seen some successes, but there's one thing that's still missing.
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When Tilray (NASDAQ: TLRY) announced fiscal third-quarter 2026 earnings, it highlighted the most positive things it could. That is what you'd expect, and what any company would do. However, the 73% revenue growth in its international cannabis business should be taken with a grain of salt. Here's why there are good things happening at Tilray and why, at the same time, most investors will want to watch from the sidelines.
Tilray isn't for the faint of heart
In the fiscal third quarter of 2026, Tilray generated $206.7 million in sales. That's a big number, but in the grand scheme of things, the company is still a small fry, with a market cap of roughly $600 million. Meanwhile, that 73% increase in international cannabis sales tallied up to just over $24 million. So, this business accounts for about 12% of the company's sales. Notable, but hardly the most important thing to consider.
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A far more important fact is that Tilray is losing money. And it has consistently lost money since going public. This is a high-risk stock that only the most aggressive investors should even consider. And even then, caution is warranted.
Tilray changes direction
In fact, the really big story with Tilray isn't about one division or business line. It is the massive business overhaul that management is executing. When Tilray went public, it was a pure-play marijuana stock. That business approach didn't work out as well as planned, so the company has shifted gears. It has broadened its reach to include other products, notably alcohol, and now considers itself a "global lifestyle and consumer packaged goods company." The packaged goods are just pot and alcohol.
From a big picture perspective, this isn't a bad plan. And there have been some successes, including the aforementioned strength in international cannabis sales. However, there have also been some weak spots, notably the beverage business' 24% sales decline in the quarter and a 20% decline in its U.S. operations. In other words, there are still a lot of moving parts, and you shouldn't get so enamored of the positives that you ignore the negatives.
Tilray is still a money-losing start-up
When you step back and look at Tilray as a business, it remains a high-risk start-up suitable only for the most aggressive investors. The company appears to be working on an attractive business shift, but until it becomes sustainably profitable, most investors should probably watch it from afar. The strong results of a relatively small business division aren't enough to change the bigger story just yet.
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.
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