Canadian cannabis cultivator Tilray (NASDAQ:TLRY) is in many ways a prototypical pot company: It’s unprofitable, its international value chain is overbuilt, and it competes in a handful of major cannabis product segments. All of that means Tilray’s stock price rides on dreams of the cannabis market’s future rather than sound fundamentals. Nonetheless, Tilray is well-known because it was the first cannabis company to have an initial public offering (IPO) on an American stock exchange.
It’s no secret why the company still captures the imaginations of cannabis investors: Tilray has formidable infrastructure devoted to global production and distribution of cannabis, and it also has an abundance of research and development activity to fuel its future growth. But the stock has so far failed to deliver for its investors, leaving many to wonder whether the company is capable of overcoming its issues with profitability anytime soon. As it turns out, Tilray’s competitive strategy isn’t very similar to those of other cannabis companies — and that just might make all the difference for its long-term performance.
Tilray may flourish as a medicinal-use-first company
Tilray seeks to establish itself as a leading medicinal marijuana company, and it is currently conducting at least 10 different clinical trials in conjunction with a handful of different medical centers and universities. This differentiates it from more established cannabis companies like Aurora Cannabis