Tilray Inc TLRY and other U.S.-listed cannabis stocks stayed hot Wednesday after Tilray exceeded expectations with its first public earnings report.
On Tuesday, Tilray reported a 95.2-percent rise in revenue in Q2 to $9.7 million. Total kilogram equivalents sold were 1,514 kilograms, up 97 percent from a year ago. Even after a huge run-up into earnings, Tilray stock gained another 15.8 percent after the revenue beat. The stock is now up 53 percent in the past five days.
Canopy Growth Corp CGC stock was was up 4.8 percent Wednesday, and Cronos Group Inc CRON was up 11.4 percent. Zynerba Pharmaceuticals Inc ZYNE gained 14.7 percent, while GW Pharmaceuticals PLC-ADR GWPH gained 0.8 percent.
Why It’s Important
Bullish momentum in the cannabis space carried over Wednesday after Novia Scotia Liquor Corporation named Tilray and a number of other marijuana companies as its major suppliers last Friday.
In June, Canada legalized recreational cannabis use nationwide, and the launch of the adult-use marijuana market is coming on Oct. 17. Investors see Canadian legalization as a major growth opportunity, and Tilray’s first earnings report confirmed that the marijuana business is booming.
New Cannabis Ventures founding partner and author of the 420 Investor, Alan Brochstein told Benzinga Tilray pulled a savvy Wall Street move with its first quarterly report.
“They did a classic smart move and provided guidance in the prospectus and then beat it,” Brochstein said.
Brochstein said Wednesday’s move simply reinforced his belief that marijuana stocks, particularly U.S.-listed stocks, have gotten overvalued in the near-term due to enthusiasm about the Canadian market.
“I continue to believe the valuation is extremely high and consider the tight float as the cause of this,” Brochstein said. “I remember that Zynerba more than tripled after its IPO too.”
According to Yahoo Finance, Tilray's float is just 920,250 shares.
Traders will be watching for any signs of traders taking profits on the huge runs in marijuana stocks in the coming days.
Tilray traded around $60.40 per share at time of publication. It debuted in June at $22.39.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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