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Analysts Expect Tilray’s Gross Margin to Expand

Margins

In this part, we’ll look at analysts’ estimates for Tilray’s (TLRY) gross margin. Cannabis companies must mitigate pressure on margins as a result of commoditization.

Estimates

As shown in the above chart, Tilray’s gross margin is expected to expand sequentially in the fourth quarter, to 49% from 31%. As the cannabis space gets crowded, companies that innovate and differentiate cannabis-derived products will likely have an edge, as unique products could command a premium and expand margins. To see if Canopy Growth (WEED), CannTrust (CNTTF), Aphria (APHA), and others (MJ) are doing this, pay attention to their long-term investments.

Canopy Growth on commoditizing

Canopy Growth CEO Bruce Linton believes that dried flower will continue to command a premium—that is, it won’t become a commodity—because consumers want good-quality, premium products. To learn more, read CGC’s Linton Doesn’t See Dried Cannabis Commoditizing. Let’s now turn our attention to analysts’ EPS expectations for Tilray.

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