Note 24 - Segment Reporting

6 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 24. Segment reporting

Information reported to the Chief Operating Decision Maker (“CODM”) for the purpose of resource allocation and assessment of segment performance focuses on the nature of the operations. The Company operates in four reportable segments: (1) cannabis operations, which encompasses the production, distribution, sale, co-manufacturing and advisory services of both medical and adult-use cannabis, (2) beverage alcohol operations, which encompasses the production, marketing and sale of beverage alcohol products, (3) distribution operations, which encompasses the purchase and resale of pharmaceuticals products to customers, and (4) wellness products, which encompasses hemp foods and cannabidiol (“CBD”) products. This structure is in line with how our Chief Operating Decision Maker (“CODM”) assesses our performance and allocates resources.

Operating segments have not been aggregated and no asset information is provided for the segments because the Company’s CODM does not receive asset information by segment on a regular basis. 

Segment gross profit from external customers:

	For the three months				For the six months
	ended November 30,				ended November 30,
	2022		2021		2022		2021
Cannabis
Net cannabis revenue	$	49,898	$	58,775	$	108,468	$	129,224
Cannabis costs		31,335		45,259		60,196		85,450
Gross Profit		18,563		13,516		48,272		43,774
Distribution
Distribution revenue		60,188		68,869		120,773		136,055
Distribution costs		52,495		61,237		107,479		120,527
Gross Profit		7,693		7,632		13,294		15,528
Beverage alcohol
Net beverage alcohol revenue		21,395		13,707		42,049		29,168
Beverage alcohol costs		11,420		5,921		22,269		12,583
Gross Profit		9,975		7,786		19,780		16,585
Wellness
Wellness revenue		12,655		13,802		26,057		28,729
Wellness costs		8,762		9,970		18,665		20,895
Gross Profit	$	3,893	$	3,832	$	7,392	$	7,834

Channels of Cannabis revenue were as follows:

	For the three months						For the six months
	ended November 30,						ended November 30,
	2022			2021			2022			2021
Revenue from Canadian medical cannabis products	$	6,365		$	7,929		$	12,885		$	16,303
Revenue from Canadian adult-use cannabis products		52,390			49,535		$	110,745			119,128
Revenue from wholesale cannabis products		236			2,259		$	628			3,959
Revenue from international cannabis products		7,705			13,706		$	18,127			23,972
Less excise taxes		(16,798	)		(14,654	)	$	(33,917	)		(34,138	)
Total	$	49,898		$	58,775		$	108,468		$	129,224

On July 12, 2022, Tilray acquired the HEXO Convertible Note from HTI closed the transaction for a strategic alliance with HEXO Corp. (“HEXO”) as discussed in Note 7 (Convertible notes receivable) and Note 12 (Convertible debentures payable). In addition, the Company and HEXO entered into various commercial transaction agreements, including (i) an advisory services agreement regarding Tilray’s provision of advisory services to HEXO in exchange for an $18 million annual advisory fee payable to Tilray; (ii) a co-manufacturing agreement providing for third-party manufacturing services between the parties and setting forth the terms of Tilray’s international bulk supply to HEXO; and (iii) a procurement and cost savings agreement for shared savings related to specified optimization activities, procurement, and other similar cost savings realized by the parties as a result of the foregoing commercial arrangements. 

Included in revenue from Canadian adult-use cannabis is $7,882 and $15,635 of advisory services revenue for the three and six months ended November 30, 2022 from the aforementioned HEXO commercial transaction agreements.

Geographic net revenue:

	For the three months				For the six months
	ended November 30,				ended November 30,
	2022		2021		2022		2021
North America	$	76,211	$	72,443	$	158,403	$	162,986
EMEA		62,715		74,916		128,756		150,925
Rest of World		5,210		7,794		10,188		9,265
Total	$	144,136	$	155,153	$	297,347	$	323,176

Geographic capital assets:

	November 30,		May 31,
	2022		2022
North America	$	424,769	$	464,370
EMEA		111,264		119,409
Rest of World		3,091		3,720
Total	$	539,124	$	587,499

Major customers are defined as customers that each individually account for greater than 10% of the Company’s annual revenues. For the three and six months ended November 30, 2022 and 2021, there were no major customers representing greater than 10% of our quarterly revenues.