TORONTO (Reuters) - Tilray Inc (TLRY.O) has cut 10% of its 1,443-strong workforce as part of a global restructuring effort to reduce costs, the Canadian cannabis producer said on Tuesday.
“By reducing headcount and cost, Tilray will be better positioned to achieve profitability and be one of the clear winners in the cannabis industry,” the company said in an e-mailed statement. “The tough decision to eliminate roles has not been taken lightly.”
With costs that are multiples higher than revenues, Canadian cannabis companies face bleak prospects for turning profits as sales lag and investors flee the sector, analysts have warned.
“I expect to see many (licensed producers) announce significant job cuts in the near future,” Jason Sandberg, research analyst at PI Financial, said by email. “Too many companies had been relying on capital infusions, which have dried up, and not internally generated cash flow.”
Tilray’s adjusted quarterly loss before interest, taxes, depreciation and amortization in the September quarter tripled to $23.5 million, as sales and marketing costs spiked nearly five-fold. The company has said it expects to achieve positive EBITDA in the December quarter.
Tilray shares closed up 5.2% in New York, compared with a 2% gain in the Horizons Marijuana Life Sciences Index ETF (HMMJ.TO).
Reporting by Nichola Saminather; Editing by Sandra Maler and Sonya Hepinstall