Marijuana News Today
Not to seem like a broken record, but the marijuana news today is once again focused on—you guessed it—Tilray Inc (NASDAQ:TLRY).
Tilray stock was up by about eight percent in early-morning trading today after gaining nearly 40% yesterday, all while overtaking Canopy Growth Corp (NYSE:CGC) to become the largest marijuana company in the world by market cap.
Suffice it to say, it was a busy week for TLRY stock. The surge in value came after the company scored an agreement to export marijuana to the U.S. for medical testing—and after a recent interview by CEO Brendan Kennedy, which has been warmly received by investors.
“I think you’ll see the third country within 12 months of October, and that’s where the real opportunity is,” said Kennedy. “It’s not about Canada, it’s about all the countries that follow.” (Source: “Investing in cannabis is ‘a great hedge’ for alcohol and drug companies, CEO of medical marijuana play Tilray says,” CNBC, September 18, 2018.)
Kennedy then called for pharmaceutical companies to be more involved in cannabis as a hedge, lest they find themselves losing market cap to cannabis.
“Cannabis is a substitute for prescription painkillers, prescription opioids, and so if you’re an investor in a pharmaceutical company or you’re a pharmaceutical company, you have to hedge the offset from cannabis substitution,” he said, adding that the same principle applied to both the beverage and food industries. (Source: “Canadian marijuana producer Tilray shares end the day up 38% in wild day of trading,” CNBC, September 19, 2018.)
And then on Tuesday, Tilray stock surpassed CGC stock to become the world’s most valuable pot company.
Valued at $14.0 billion, Tilray’s astounding run has seen the company increase its share value by well over 1,000% since its initial public offering (IPO).
And it continues to climb.
Not to be outdone, Canopy Growth has tried to steal some of the headlines away from Tilray by taking its venture capital arm public on the TSX Venture Exchange. The investment platform, Canopy Rivers Corp., will begin trading on the TSX via a reverse takeover.
“We’re really trying to make this smart money that goes global,” said Bruce Linton, chief executive officer of Canopy Growth and acting CEO of Canopy Rivers. “The scouting has been pretty active.” (Source: “Canopy Venture Gyrates in Trading Debut as Cannabis Shares Churn,” Bloomberg, September 19, 2018.)
Canopy Rivers will be listed under the symbol RIV and priced at CA$3.50, with a valuation of about CA$600.0 million.
Canopy Rivers will work with companies that are looking for financial or operating support with Canopy Growth and its subsidiaries.
Of the 11 investments made by the company over the past year, 10 were in Canada and one was in Italy—running the gamut from licensed marijuana producers to media platforms.
It makes sense that Canopy Growth Corp would want to make some waves, considering all the attention that Tilray stock has been receiving. After all, having grown its stock value by over 1,000% in just a few months, the company has attracted the attention of not only marijuana bulls, but many other market traders.
I’m sure the fight for the position of top dog in the marijuana industry will not end today, and I expect that Canopy Growth will seek to regain that position.
In any case, I believe that, in the long term, CGC stock is the safer and more reliable pick compared to TLRY stock, which is far more volatile (but which also carries with it massive potential).
This week’s marijuana news has been dominated by Tilray stock, and for good reason. Over the past few days, the stock is up 88%. And the longer back you look, those gains only get more impressive.
The real question, of course, is how long this run can last. While I’ve called for a correction to TLRY stock in the past (and have been wrong), there is going to be an eventual ceiling to just how high it can climb.
But that may still be a ways away yet. With marijuana legalization in Canada fast approaching, I anticipate another cannabis industry surge in the weeks preceding October 17. As such, I see another climb in Tilray stock’s future.
One thing’s certain: there is no better short-term play in the marijuana market than Tilray Inc. The stock’s volatility may not make it the best long-term pick, but if you want to see gains fast, then TLRY stock is your bet.
Aurora Cannabis Stock
The only other company that could hope to compete with Tilray this week on the news front is Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB).
Up by about five percent in early-morning training today—and up by over 40% in the past five days—ACB stock has also been the headlines due to very positive developments.
The first noteworthy development was the potential deal with The Coca-Cola Co (NYSE:KO), which we’ve covered at length. The next bit of good news, however, came by way of a potential U.S. stock market listing in October.
Aurora Cannabis stock is up big as a result of these two wins. Should it find itself with a ticker on a major U.S. listing in time for marijuana legalization in Canada, expect to see big gains from ACBFF stock.
TLRY & ACBFF Stock Performances
On the chart below are the recent performances of the stocks for Tilray Inc (black line) and Aurora Cannabis Inc (blue line):
Chart courtesy of StockCharts.com
Across the cannabis industry, in multiple companies, we have been seeing great things emerge in the marijuana news today.
This week has been one of the best ones in recent memory for pot stocks, and with Canadian marijuana legalization fast approaching, I expect these gains to continue to roll in.
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