Why Tilray Stock Plummeted by 42% in 2024

Industry Overview - The marijuana industry is currently facing significant challenges, including heavy competition, high taxation, and inconsistent legalization in the U.S. [1] - Marijuana companies are among the worst performers on the stock exchange, indicating a tough market environment [1] Company Performance: Tilray Brands - Tilray Brands (TLRY) has struggled in 2024, reflecting the broader issues within the cannabis sector [2] - The company has focused on diversifying away from marijuana, particularly by expanding its beverage holdings, which now include a prominent craft beer portfolio in the U.S. [3] - Despite the diversification efforts, the craft beer market is not experiencing significant growth, raising questions about the long-term viability of this strategy [4] Financial Results - In the first quarter of 2025, Tilray reported a 13% year-over-year increase in net revenue, reaching $200 million, largely driven by a 132% increase in beverage sales, which contributed nearly $56 million [5] - However, the core cannabis business saw a decline of 13%, with revenues falling to approximately $61 million [5] - Tilray continues to face profitability challenges, reporting a GAAP net loss of nearly $35 million, although this was an improvement from a loss of slightly under $56 million in the same quarter the previous year [6] Future Prospects - The company is exploring growth opportunities, including efforts to enter the German market, but recent legalization measures in Germany have been lackluster [7] - Many publicly traded marijuana companies, including Tilray, are now viewed as penny stocks, which may deter potential investors [8]