Tilray Raises Low End of Earnings Outlook to $70 Million and Consolidates Canadian Facilities
Key Facts
Tilray raised the low end of its fiscal 2027 adjusted EBITDA outlook to $70 million from $68 million, while keeping the high end at $75 million. On November 2, 2026, the company announced a plan to reorganize its cannabis operations in Canada, including moving cultivation from its Foss facility in Fenwick, Ontario, to Masson in Quebec. It will also move pre-roll production from Foss to its Cayuga facility in Ontario. Tilray said the consolidation aims to improve operational efficiency and make use of existing facility capacity. The company expects annual savings of about $10 million by the end of fiscal 2028, with the full annualized savings rate expected to begin in that fiscal year.
The company expects operations at Foss to end by January 31, 2027, and said supplies across its brand portfolio will continue without interruption during the transition. Cannabis cultivation will be concentrated at Masson, which Tilray said can increase its annual capacity from about 32.5 to 50 metric tons. The company describes the facility as having higher yields and lower operating costs, characteristics that place it at the center of its cost-cutting plan. Tilray's Canadian sites have a combined cannabis cultivation area of 4.2 million square feet. Along with increasing capacity, the company expects Masson to regain EU-GMP certification during calendar 2027. It said the certification will expand the facility's ability to serve international medical cannabis markets.
The plan comes as pre-rolls account for about one-third of Tilray's adult-use cannabis sales in Canada, according to the company. The category grew 28% in fiscal 2026, while Canadian adult-use cannabis revenue rose 5% to $236.4 million from $224 million in the prior fiscal year. The annual filing said growth in traditional pre-rolls partly offset a 4% decline in whole flower, the largest category. Moving pre-roll production from Foss to Cayuga gives the product particular operational significance in the realignment of the sites. Tilray says uninterrupted supplies across its brands during the transition will maintain product availability as production locations change.
First-quarter fiscal 2027 results show a mixed picture, with overall revenue growth alongside weaker cannabis revenue. Revenue rose 23% year over year to $257.1 million from $209.5 million, while net cannabis revenue fell to $56.1 million from $64.5 million. Adjusted EBITDA was $9.2 million, compared with $10.2 million in the year-earlier period. The company attributed part of the pressure to about $1.7 million in global fuel surcharges during the quarter. In contrast, gross profit rose to $77.5 million from $57.5 million, and its margin widened to 30% from 27%. These indicators put cost cutting among the company's efforts to improve efficiency as trends vary across its businesses.
On the stock, EL7 data show TLRY's close fell from $2.72 on October 26 to $2.53 on October 30, 2026. The data do not support describing the move as a rise following the plan announcement. Jefferies had raised its price target on the stock to $13 from $12 on October 29, while maintaining its Reduce rating. Investing.com reported at the time that the stock had fallen 80% over the previous year. Upcoming operational milestones include the expected end of Foss operations on January 31, 2027, followed by Masson's EU-GMP recertification during 2027. The full annual savings targeted by the company are expected to begin accruing in fiscal 2028.