TILT Holdings Reports 30% Revenue Decline and $99.7 Million Net Loss for Fiscal Year 2024

TILT Holdings Inc. reported a significant decline in its financial performance for the fiscal year ending December 31, 2024, with total revenues of $115.6 million, down 30% from $166.0 million in the previous year. The decrease was primarily attributed to a 35% drop in revenue from its Inhalation Technology division, largely due to shipping delays from a primary supplier and a lower average selling price for certain products. The Cannabis division also experienced a 19% decline in revenue, driven by reduced sales volumes in Massachusetts and Pennsylvania, although Ohio operations showed some growth.

The company's net loss for the year was $99.7 million, compared to a loss of $62.4 million in 2023, reflecting an increase in operating expenses, particularly a $30.5 million rise in impairment losses related to long-lived intangible assets. Total operating expenses increased by 33% year-over-year to $89.5 million, influenced by higher share-based compensation and impairment charges. The gross profit margin improved slightly to 17% from 15% in the previous year, despite the overall decline in gross profit.

In terms of strategic developments, TILT Holdings has been actively restructuring its operations. The company is exploring divestitures and partnerships to focus on its Inhalation Technology segment, which it believes holds significant value. Additionally, TILT has entered into a new loan agreement to fund the construction of medical marijuana dispensaries in Pennsylvania, reflecting its ongoing commitment to expand its footprint in regulated markets.

Operationally, TILT Holdings reported a workforce reduction from 358 to 313 employees, indicating a strategic shift towards an asset-light model. The company is also facing liquidity challenges, with negative working capital of $46.6 million as of December 31, 2024. The high-interest rates on its debt, particularly the 25% rate on its refinanced notes, are constraining cash flow and liquidity. The company is currently negotiating with noteholders to address non-compliance with financial covenants.

Looking ahead, TILT Holdings acknowledges substantial doubt about its ability to continue as a going concern within the next 12 months. The company plans to implement strategies to improve liquidity, including increasing revenue from existing products, reducing operational costs, and potentially raising additional capital. However, the uncertainty surrounding its financial position and the broader cannabis market poses significant risks to its future operations and growth prospects.