Citron Still Short Tilray, Notes Canopy Growth Is The 'Global Leader' In Cannabis

Tilray Inc TLRY's stock is up another 12.5 percent in the past week, but Citron Research’s Andrew Left said he's still short the stock and Canadian marijuana companies will not be the winners from a potential U.S. marijuana legalization.

What Happened?

At the Reuters Global Investment Outlook Summit on Monday, Left said leading Canadian marijuana companies would likely get steamrolled by larger American competitors in the event of U.S. legalization given that there is no brand value or competitive moat in the U.S. cannabis business.

“When U.S. LPs (companies) go public in the next few years it will make these Canadian companies laughable,” Left said.

Why It’s Important

Tilray shares are now up 339 percent in the past three months, and the U.S.-listed Canadian cannabis company isn't alone:

  • ETF MANAGERS TR/TIERRA XP LATIN AME MJ is up 19.8 percent.
  • Canopy Growth Corp CGC is up 35.4 percent.
  • Cronos Group Inc CRON is up 37.5 percent.
  • Aurora Cannabis Inc ACB is up 49.9 percent.
  • Aphria Inc APHA is up 47.2 percent.

Canadian marijuana stocks have capitalized on investor enthusiasm following nationwide recreational cannabis legalization in Canada in October and state legalization measures approved by U.S. voters last week in Michigan and Missouri.

Left said he understands why investors are excited about the cannabis market but said Tilray is a dangerous way to play the trend. Right now, Left said Canopy Growth is the global market leader, although he has no position in the stock.

What’s Next?

Left said the next potential bearish catalyst for Tilray will be its lockup expiration date on Jan. 15, 2019.

“What happens the day the lockup expires and the float doubles? What happens to the stock then?" Left said, according to Reuters.

Related Links:

What Jeff Sessions' Resignation Could Mean For Cannabis Stocks

What A Split Congress Means For The Stock Market

Posted In: Andrew LeftCitron ResearchReutersCannabisNewsShort SellersShort IdeasMarketsMediaTrading Ideas

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.