Tilray Stock: As Germany Closes in on Legal Cannabis, Rest of Europe Might Follow

Tilray Stock: As Germany Closes in on Legal Cannabis, Rest of Europe Might Follow

Tilray expects to see $1 billion in revenue from Europe once legalization efforts come to fruition.
 
UPDATED JAN 12, 2022 1:21 PM EST ORIGINAL: JAN 12, 2022

Germany is the catalyst that could open up a whole continent of medical and recreational-cannabis revenue for Tilray  (TLRY) – Get Tilray, Inc. Report

The company has been laying the groundwork to leverage changing laws in Europe.Currently the regulatory approaches to cannabis among European countries vary widely, according to PharmExec.com. But Germany is the key, according to Tilray executives. 

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“With the anticipated legalization of recreational cannabis in Germany, we believe other EU countries will follow suit,” Chief Financial Officer Carl Merton said on the company’s fiscal-second-quarter earnings conference call. 

Tilray has growing facilities in Germany and Portugal. And the company has held talks with German officials, with the expectation that recreational-use cannabis will become legal in the country, which has nearly 85 million people.

Germany’s incoming coalition government has agreed to legalize recreational adult use. If it follows through, Germany would become the world’s largest federally legal market. 

“It will probably take maybe 12 to 18 months before it can happen. And you will see potentially Portugal and other countries go ahead because of the tax,” Chief Executive Irwin Simon said on the earnings call. 

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Tilray is currently the only company supplying the German government with medical cannabis grown in-country. 

Its cultivation facility in Germany also has additional capacity to support entry into the recreational market once that use is legalized, the company said in its most recent earnings report

Tilray values the European market at potentially $1 billion for the company, driven by its cultivation facilities on the Continent. 

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For the second quarter ended Nov. 30 Tilray reported international cannabis revenue totaled $13.7 million, representing nearly 20% of its total cannabis revenue for the period.