Tilray Brands Inc. (NASDAQ: TLRY) topped Wall Street’s revenue expectations Friday as the company continues beefing its beer business amid sluggish marijuana sales.

The company’s fiscal second-quarter revenue rose 9% to $211 million for the quarter ended Nov. 30, eclipsing analysts’ average estimate of $207.8 million, according to financial data from Yahoo Finance.

The company reported a net loss of $85 million, widening from a $46 million loss in the same period last year. The latest quarter included $75 million in non-cash items and $8 million in one-time costs, the company said.

CEO Irwin D. Simon said in a statement that the company remains generally focused on “revitalizing the beer market, driving growth in spirits and non-alcoholic beverages, and advancing the legitimacy of cannabis for both recreational and medical use.”

The company’s alcohol segment saw revenue jump 36% to $63 million versus the prior year. However, cannabis revenue dipped slightly to $66 million from $67 million, while international cannabis sales grew 25%.

Tilray has been expanding its beverage portfolio via new deals since entering the category in 2020. The company announced “Project 420,” a $25 million synergy initiative focused on tweaking its beverage operations following recent craft brewery acquisitions.

“Through our brew pubs, we focus on bringing people together, creating exceptional experiences through entertainment, and enhancing lives through moments of connection,” Simon said.

The company reaffirmed its fiscal 2025 guidance, projecting net revenues between $950 million and $1 billion. Wall Street analysts expect revenue of about $901 million for the year, according to Yahoo Finance data.

Tilray shares fell over 10% to $1.23 in morning trading as of press time.

The company’s adjusted gross profit increased 29% year-over-year to $61 million, with growth across all business units.

The company said it has achieved $17 million of its planned $25 million in synergies from Project 420 as of the quarter’s end, though noted these savings are not yet fully offsetting related investments.

Additionally, the load of acquisitions may make it difficult for investors to project a fuller organic sales picture in the shorter term, according to Seeking Alpha.

As multiple wildfires rage across Southern California, cannabis dispensaries in the greater Los Angeles area are attempting to maintain operations while preparing for potential evacuations amid deteriorating conditions, sources told Green Market Report early Wednesday.

Four major fires – the Palisades, Eaton, Hurst and Woodley fires – have burned more than 5,000 acres combined as of Wednesday afternoon, forcing thousands to evacuate and leaving many businesses, including the region’s cannabis retailers, to make difficult decisions in an already economically battered market.

The Los Angeles Fire Department issued mandatory evacuation orders for large swaths of Pacific Palisades, with the evacuation zone stretching from the Pacific Coast Highway to Topanga Canyon Boulevard. Similar orders are in effect for parts of Pasadena near the Eaton Fire, ABC7 reported.

“Right now there’s a lot of places in the surrounding areas that are not open,” said Gilbert Romero, who works security at Harvest dispensary in Santa Monica. He said falling ash and smoke are visible but operations continue at the location. “We’re getting a lot of new people from other places because their places are closed.”

The fires, driven by Santa Ana winds reaching up to 60 mph with gusts of 100 mph in some areas, have forced several dispensaries to close, including the prominent 99 High Tide dispensary in Malibu, sources confirmed. Others reported they’re operating without clear guidance or emergency protocols from management. Green Market Report attempted to reach a number of operations bordering to the impact zones, such as Cookies in Brentwood and a Green Thumb Industries store off Wilshire Boulevard.

“Unfortunately, no one communicates these things with us, so I genuinely have no idea,” Lexi Hatch, a 24 year-old budtender at Farmacy Westwood near UCLA’s campus, told GMR around 11 a.m. PST on Wednesday when asked about contingency plans. Hatch, who moved to Los Angeles from Boston four months ago, said that she was keeping watch on news updates while continuing regular operations.

Some dispensaries, though, do have clearer protocols. At Erba Collective off Pico Boulevard, a front desk worker who identified herself only as Alex said they were “perfectly fine right now” but noted they were located just “10, 15 minutes away from Santa Monica.”

The situation remains particularly tense in Santa Monica, where Harvest’s Romero reported seeing black smoke, which is indicative of active burning.

“If we choose to stay open and it’s left to us, we’re gonna do it. Unless we see a fire,” he said, adding that ultimate closure decisions would likely come from city authorities.

At Xzibit West Coast Cannabis in Bel Air, Jordana Shank, a 27-year-old budtender, said management informed staff they would maintain regular 9 a.m. to 10 p.m. hours unless directed otherwise by authorities.

“Whenever the fire department shows up and says we need to evacuate is when we would close our doors,” Shank noted.

The fires have created a patchwork of closures across the normally bustling cannabis retail landscape. Cookies dispensary locations “up that way going towards L.A.” have reportedly closed, according to Romero, while some beach-adjacent locations remain open.

Banding together

Industry leaders are monitoring the situation closely while coordinating support efforts through informal networks, such as a text thread of approximately 50 dispensary owners who share updates and offer mutual aid. Jerred Kiloh, president of the United Cannabis Business Association and a 25-year veteran of cannabis retail, reported that several dispensaries in evacuation zones have already shut down, with many delivery services suspending operations to keep drivers off the roads.

Carlos De la Torre of Cornerstone Research reported being just two miles from an evacuation zone, Kiloh noted, adding that smoke conditions were also significantly affecting customer traffic, as residents heed official recommendations to stay indoors.

“When resources are spread thin, you kind of have to rely on each other,” Kiloh said, noting that the industry has developed informal mutual aid networks following previous crises. He expressed particular concern about insurance coverage, explaining that many operators have had to reduce coverage due to high premium costs.

“Fire insurance is not usually on a lot of commercial insurance plans. And when you pay this much insurance just as cannabis, you got to pick and choose what is high risk and what is not,” he said.

In prepared remarks emailed to GMR, the California Cannabis Industry Association expressed concern about both immediate and long-term impacts on businesses and their employees, “particularly those already navigating economic and regulatory hurdles.”

The organization said that the Department of Cannabis Control is making disaster relief available to affecetd licensees, who can evacuate cannabis products without prior authorization if facing immediate fire threat.

Aside from retail, there are growing concerns about potential impacts on indoor cultivation facilities in the region. While Los Angeles County prohibits outdoor growing, indoor facilities could face challenges from smoke infiltration.

“If you’re pulling smoke into your grow room, there’s really no way to get rid of it,” Kiloh explained, referencing past incidents where smoke contamination affected crop quality during Northern California wildfires.

Rhode Island marijuana regulators on Wednesday released a new draft of rules for how they intend to go about expanding the recreational cannabis market, but they also made clear that the regulations have a ways to go before they’re finalized.

At issue is exactly how the state Cannabis Control Commission will pick 24 new dispensary license winners, The Providence Journal reported. Currently, the commission is planning to use a “hybrid” method, wherein commissioners would first vet license applicants, and then compile all qualifying entrepreneurs into a lottery for the two dozen retail permits.

But one of the three-member commission vocally opposed such a plan, arguing that a merit-based scoring system would be better than a lottery, The Journal reported.

“We won’t be able to consider which applicants have the better plans, only that they have a plan, and then they’re in the lottery,” Commissioner Robert Jacquard said. “So, I think that is unfair to the applicants that put the most effort into this and have the best overall plans.”

Jacquard was overruled by his two counterparts, however, who asserted that such processes have only led to endless litigation in other states that have tried standing up new marijuana markets with limited license models.

“That’s how other states have been sued to great success,” Commission Chairwoman Kim Ahern said. “So my goal is to avoid further delay, which is a theme we’ve heard in every public comment period we’ve had.”

There are already two pending lawsuits filed against Rhode Island over its marijuana permitting plans. Those claims challenge the legality of a residency requirement for licensure and the parameters of its social equity program. Because of those coming legal hurdles, Ahern said it’s not clear if any new dispensaries will be opened this year, The Journal reported.

The new rules will go through a 30-day public comment period next, before the commission revisits the topic. Further changes could be made before final adoption.

Currently, there are only seven legal dispensaries serving the entire state of Rhode Island, though two others are licensed by not yet open. The 2022 law that legalized recreational marijuana also mandated a phased-in expansion of the industry, which means the state will eventually have 33 operational adult-use cannabis shops.