B.C. pot firm Tilray falls as quickly as it skyrocketed
Shares in Tilray, the Nanaimo, B.C.-based weed company, sank 30 per cent to $123.61 in New York on Friday. That pushed the stock’s two-day slide to 43 per cent, the steepest since Tilray’s initial public offering in July.
Just two days earlier, Tilray captured the attention of Wall Street as it took investors on one of the wildest rides yet in the euphoria surrounding pot stocks. The shares nearly doubled Wednesday, then wiped out that gain within an hour only to surge almost 40 per cent into the close. They ended the week up 13 per cent.
“Markets are driven between poles of fear and greed,” said Kim Forrest, a senior portfolio manager at Fort Pitt Capital Group in Pittsburgh. “People don’t understand the economics of these companies, but they wanted it. Everyone wants easy money.”
The fluctuations drew comparisons to the Bitcoin craze and even the height of the dot-com bubble. Neither of those turned out well.
“I was speaking at a client event yesterday and I had to address it,” Forrest said.
“I had a couple emails from our consultants saying, ‘This person wants to buy Tilray, what should I tell them?’ I said buy it now and your money is going to go up in smoke. The best email I got was, ‘My friend made $100,000 with these stocks.’ OK, but did he really? Today Tilray is down.”
Also Friday, Shoppers Drug Mart received Health Canada’s approval to be a licensed medical marijuana producer, opening the door for the pharmacy giant to dispense medical cannabis to patients.
The chairman of Alimentation Couche-Tard Inc. says reluctance from its own staff and broader uncertainty about the North American pot market are preventing it from charging into the growing sector. “They don’t want to sell it. So we’ll be prudent.”