However, profits at some cannabis companies continue to outpace last month’s gains. Tilray’s shares remained 421% higher Thursday compared to a year ago, the report said. Exchange-traded funds such as Global X Cannabis, ETFMG Alternative Harvest and Amplify Seymour Cannabis were this year’s best performers at Wednesday’s close.
A report on WallStreetBets described cannabis stocks as an “expensive” new scoreboard that has gained notoriety this month for pushing down GameStop shares. According to a CNBC report, the interest in cannabis shares is due in part to high short interest, which measures the proportion of the company’s traded shares used in betting against the company. The report notes that Tilray’s short interest represents 22.5% of shares available for trading.
Some posts on the discussion forums also raise hopes that the Biden administration is considering decriminalizing cannabis at the federal level. Canopy CEO David Klein told investors Tuesday that he expects federal reform later this year. Canopy also reported Tuesday a 12 percent increase in revenue to $152 million in the third quarter of last year, according to Barron’s, which could suggest that at least some of the share gains are not just a byproduct of retailers and WallStreetBets.
Tilray’s CEO, Brendan Kennedy, went a step further by stating that the company expects federal legalization in the United States within the next 12 to 18 months. In December, Tilray announced a merger with Aphria, which upon completion would create the world’s largest cannabis company based on preliminary results. Under the agreement, Aphria shareholders will receive 0.8381 Tilray shares for each ordinary Aphria share, while Tilray owners will retain their shares without adjustment. Some of Aphria’s trading last week may be related to this deal, as traders try to get a piece of Tilray at the current prices of Aphria’s shares.
Earlier this month, Senate Democrats – who have a narrow 50/50 majority, with Vice President Kamala Harris speaking on a tie vote – announced plans for federal reform.
According to a report by the Wall Street Journal, Sundial Growers is the most frequently mentioned cannabis on the forum with about 8,500 mentions, causing the stock to rise 79% on Wednesday and fall 19% on Thursday.
TG joined the team in 2014 as a news editor and began hosting a podcast in 2016. He lives in upstate New York, where he also teaches media studies at a local university.
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