Weed firm Tilray sinks as quickly as it rose

NEW YORK • Tilray Inc. is in a tailspin.

Shares in the Nanaimo, B.C.-based weed company sank 30 per cent to $123.61 in New York Friday. That pushed the stock’s twoday 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 are still up 13 per cent.

“Markets are driven between poles of fear and greed,” Kim Forrest, a senior portfolio manager at Fort Pitt Capital Group in Pittsburgh, said by phone.

“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,” Forest 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.

A Shoppers spokeswoman says the approval to be a licensed producer is the “first step” in its journey to providing medical cannabis to its patients, and it will share more information about its plans in the coming weeks.

The pharmacy retail chain had already in recent months signed supply deals with various licensed medical marijuana producers, including Aurora Cannabis, Aphria Inc., MedReleaf

Corp. and Tilray Inc. Shopper’s parent company, Loblaw Companies

Ltd., is also looking to sell recreational pot in Newfoundland and Labrador once it is legal nationally on Oct.17.

Meanwhile, the chairman of Alimentation Couche-Tard Inc. says reluctance from the company’s own employees and broader uncertainty about the North American cannabis market are preventing it from charging into the blossoming sector.

“There’s opinions all over the place. If you talk to our people, it’s like 50-50,” said Alain Bouchard, co-founder of the Quebec-based convenience store giant.

“It could be a good product if it’s legal. But some people are scared about the buyers of cannabis, how they will act in the store, how they can control safety, security,” Bouchard said.

“They don’t want to sell it. So we’ ll be prudent.”