Tilray on Vape, FDA, and the US Market

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Tilray (TLRY) shared its strategy to capture the hemp vape market. The Canadian pharmaceutical and cannabis company will break down vaping products into three subcategories. The subcategories are disposable vapes, interchangeable 51o threads, and vape cartridges that can be used in a third-party delivery system. The company stated that it intends to offer a full spectrum of products under each of the three categories.

In addition, the company mentioned that it has been building inventory to prepare for selling vapes when legalization allows. Canopy Growth (WEED)(CGC), on the other hand, plans to launch edibles including infused chocolates as well as vaping products in the near quarter in Canada.

Tilray hemp among front runners in new market

Vaping products are increasingly becoming a hot topic. This is because the potential market for vaping products is expected to be one of the largest. For cannabis companies, this market seems to be an easy entry for users who may want to try cannabis instead of tobacco vapes. There is some support that vaping cannabis is less harmful than vaping tobacco.

Major cannabis companies are eyeing the US market and so is Tilray. The company, through its acquisition of Manitoba Harvest, has hemp products in about 1,000 stores. However, the company indicated that it is also hoping to get more clarity on CBD-based products from the FDA (the US Food and Drug Administration).

FDA cracks down on vape products

The company is cautious not to upset the FDA. Recently, the FDA has reported rising violations in the vape market. For example, FDA took forty-four vape products off the shelf. The FDA wasn’t happy with the promotion of those products.

In addition, The FDA also caught Curaleaf Holdings (CURLF) with the illegal promotion of products on the company’s website. When Tilray plans expansion into this space, the company will have to be extremely cautious.

Stock declines by 10%

Tilray saw a 10% decline on August 14. The stock fell to a low point, which was the continuation of a trend since January of this year. Tilray’s recent decline was followed by its recent earnings release. While the company managed to report better than expected revenue results, Tilray reported larger than expected losses.

When companies consistently report larger than expected losses, the stock price will also trend downwards. Tilray missed all of the last four EPS estimate. This has directly reflected in the downward direction of the stock.

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For more stock analysis, read Tilray Stock Fell More than 10% after Its Q2 Earnings.

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