- NASDAQ: TLRY pulls back sharply from three-month highs.
- Cannabis stocks pullback as lawmakers propose amendments to legalization bill.
- Tilray still has a solid foundation even if legalization does not pass in the US.
Update: Tilray Inc. (NASDAQ: TLRY) extended its bullish momentum and hit three-month highs at $8.71 before retreating sharply to settle Tuesday at $8.32. The stock price still added 4.13% on the day. The global pharmaceutical, cannabis-lifestyle and consumer packaged goods company extended the previous week’s rally on expectations of the passage of the Marijuana Opportunity, Reinvestment and Expungement (“MORE”) Act in the US House of Representatives, which would remove cannabis from the list of federally controlled substances has worn off. Worries over the bill’s approval in the Senate dragged the stock price sharply lower from multi-month highs.
NASDAQ:TLRY erased most of the gains the stock made during Friday’s session when it saw a daily trading volume of nearly 300 million shares changing hands. On Monday, shares of TLRY dropped by 6.66% and closed the trading session at $7.99. The recent momentum has pushed Tilray above its key 50-day moving average price, but the stock still lags its 200-day moving average price by more than 30%. Despite the cannabis sector plummeting on Monday, all three major indices closed the session higher. The Dow Jones inched higher by 94 basis points, the S&P 500 added 0.71%, and the NASDAQ jumped by 1.31%.
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Cannabis stocks pulled back on Monday after it was reported that US lawmakers had submitted some amendments which pushed the meeting from Monday to Wednesday of this week. There is also growing concern that while the vote will likely pass in the House of Representatives, there is little chance it will make its way through the Senate. Investors were reminded that the vote passed the House once already in 2020, but also did not get past the Senate on that occasion either. The amendments have taken the wind out of the sails of cannabis stocks, at least during Monday’s session.
TILRAY stock forecast
Even if US legalization does not come through, Tilray has enough market share in other regions around the world to stay strong. It has one of the largest market shares in Canada at around 13% of the total industry, as well as a major move into Europe, including a 20% share of the medical marijuana industry in Germany. US legalization would obviously be nice, but investors should not bank on it to be the end all be all for Tilray’s success.
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