Marijuana News Today
Tilray Inc‘s (NASDAQ:TLRY) superb run continues in the marijuana news today, up by 43% in early-morning trading as the industry continues to ride high on the back of the rumored deal with The Coca-Cola Co (NYSE:KO), approval from the U.S. Drug Enforcement Administration for cannabis testing, and strong statements from Tilray’s CEO.
First, the breaking news. On Tuesday, CEO Brendan Kennedy stated that pharmaceutical companies ought to consider joining with the marijuana industry, lest they find their products replaced in the market by 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,” Kennedy said, adding that the same principle applied to both the beverage and food industries. (Source: “Pot stocks are soaring again with Tilray surging 30% in early trading,” CNBC, September 19, 2018.)
These comments helped spur astronomical growth in Tilray stock, up dozens of percentage points before the morning bell sounded, with the company up over 40% as of the writing of this article.
This marks yet another day of very impressive gains being seen out of TLRY stock, with many wondering just how high the company can go.
What This Means for Marijuana Stocks
While ostensibly, marijuana companies are all competing against one another, the nature of the industry at the moment is that what’s good for one is generally good for all.
And that’s what we’re seeing in the marijuana news today. Tilray stock’s massive jump to start the morning has boosted a number of shares across the board.
Many companies are up about three to five percent in early-morning trading. While that’s a far sight from Tilray stock’s stellar gains, it’s still a good time to be a marijuana player in virtually any stock at the moment.
The industry is experiencing one of the strongest points of its history, largely spurred on by the interest of other sectors getting involved with the pot business.
We’re seeing this in The Coca-Cola Co as it explores the marketplace and is rumored to be seeking a deal with Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB).
The alcohol industry is likewise increasing its ties to the marijuana business as cannabis-infused beverages have become all the rage among liquor and beer producers.
So far, “Big Alcohol” has been the most active in making deals with marijuana companies. Constellation Brands, Inc. (NYSE:STZ) and Molson Coors Brewing Co (NYSE:TAP) have both invested heavily into the industry, putting their money on the future of this beer/cannabis marriage.
And that’s a savvy business move. As we’ve seen in the U.S., states that legalize recreational marijuana have seen alcohol sales drop. Meanwhile, other beverage sales like coke have stalled in recent years. For these companies, cannabis-infused beverages offer a way to both boost sales and ward off a potential competitor in marijuana, making Tilray’s CEO’s comments especially resonant.
So just how high can Tilray stock climb?
I’m looking rather foolish in that I called for a correction last week, when Tilray stock has done anything but correct.
At this point, there’s no way to tell when the bottom will fall out, meaning that impressive gains could continue on indefinitely.
While you shouldn’t expect 40% gains every day, there simply is no better short-term pot stock on the market right now than TLRY stock.
How long the run will last is questionable, but if the company can keep up these gains to close out September, then come October, Canadian marijuana legalization hype will take over and help continue this insane bull run going.
One of the major beneficiaries of the Tilray stock rise has been Cronos Group Inc (NASDAQ:CRON).
As the only other pure-play marijuana stock on the Nasdaq besides TLRY stock, CRON stock often enjoys some of the overflow from Tilray’s surges. And we’re seeing that take place again today.
While many pot stocks are up several percentage points today, CRON stock soared by about 13% in early morning trading, despite having little in the news that would warrant such a massive jump.
Being on the Nasdaq has made Cronos stock a prime target for investment by U.S. buyers. As Tilray continues to force investors to slaver over its seemingly unstoppable rise, many are also turning to CRON stock to gain further exposure to the industry. And not to mention hedge their bets should a Tilray stock correction eventually land.
TLRY & CRON Stock Performances
On the chart below are the recent performances of the stocks for Tilray Inc (black line) and Cronos Group Inc (blue line):
Chart courtesy of StockCharts.com
The marijuana news today shows again why pot stocks are some of the most exciting buys available.
Tilray stock has made its early investors a whole ton of money, and this is only the first marijuana initial public offering (IPO) on the Nasdaq.
Seeing how well TLRY stock has performed, you better believe that companies will be lining up to IPO on the famed exchange, while investors will create an equally long queue to invest in and replicate this special Tilray run.