Strong weed helped Tilray Inc. roughly double its second-quarter sales, the company said Tuesday, in the first earnings report since its July initial public offering.
Tilray stock rose 14% in after-hours trading.
The Canada-based cannabis producer reported its top line grew 95% to $9.7 million, compared with $4.9 million in the year-ago quarter, driven by increased demand in Canada as well as sales to other weed companies and international sales.
The per-gram price of cannabis Tilray TLRY, -3.63% was able to command also rose about 18% to $6.38 from $6.20, because the company was able to sell more high-potency weed and extracts.
“We are very pleased with our strong start to 2018,” Chief Executive Brendan Kennedy said in a statement. “Tilray is well-positioned to continue to pioneer the development of the global medical cannabis market and to become a leader in the adult-use cannabis market in Canada.”
But the company remains firmly in the red, logging net losses of $12.8 million, widening from losses of $2.4 million in the year-earlier quarter.
Typically, companies in their first public quarter report higher-than-usual stock-based compensation expenses because of vesting options, and Tilray is no different; it recorded $5.6 million in stock compensation expenses during the quarter, up from $35,000.
On the call with analysts, Tilray executives said that they expected gross margins of below 50% for the next two quarters, but that margins would rise above 50% after that.
Adjusted for items such as stock compensation and foreign exchange, the company posted losses before interest, taxes, depreciation and amortization of $4.7 million, compared with losses of $1.9 million in the year-before quarter.
Recreational marijuana will become legal in Canada starting Oct. 17. In the U.S. it remains illegal under federal law, though several states such as California, Washington, Oregon and Nevada have legalized recreational use of the drug.
Shares of the Canada-based weed maker have been on a rampage since going public at $17 in July, raising $163.6 million.
The stock has enjoyed consistent gains after Corona-maker Constellation Brands Inc. STZ, -1.47% announced a $4 billion investment in rival Canopy Growth Corp. CGC, -6.74% , and a report that Smirnoff-maker Diageo PLC DEO, -0.73% was eyeing a similar deal with three companies in Canada.
Tilray stock has surged more than 30% in the past five days, as the S&P 500 index SPX, +0.03% rose 1.2% in the same period.
Pot stocks rallied again Monday after the Canadian province of Nova Scotia announced through its government-owned liquor organization that it plans to buy 3.75 million grams of pot initially and about 15 million grams over the next year. Tilray is one of the suppliers that Nova Scotia named in its announcement.