Tilray Stock Price: What’s Driving Momentum

Tilray (NASDAQ:TLRY) is an American-owned licensed producer based in Nanaimo, BC. The company produces an array of cannabis and cannabis-related products.

It sells domestically in Canada, and to many other countries around the world. In Canada, Tilray has been supplying the medical cannabis market for several years. While Tilray was founded five years ago, it remained privately owned until 2018.

Tilray launched at US$17 during its NASDAQ IPO on July 9, 2018 and quickly shot up from there. There are a number of factors influencing Tilray’s stock price, including industry speculation and sentiment.

For example, upon rumors of a possible partnership with big alcohol player Diageo (LSE:DGE), Tilray’s stock price shot up roughly 34 percent.

Many believe that Tilray could be the top pick for this very coveted suitor. The market has also responded favorably to its quarterly earnings reports, and that has been reflected in its growing price.

Of course, market watchers are curious about how the Tilray stock price will react to two pivotal future events: legalization day in Canada on October 17, 2018, and (potential) federal legalization in the US.

Like its peers, the company’s market cap is currently considered grossly out of step with its reported earnings. After cannabis becomes legal it will become clear what the actual market demand is and whether the numbers stack up.

Some say the company’s share price and market cap will begin to recalibrate to reflect actual assets and profits after legalization occurs. But only time will tell if the penny will drop, or if prices will remain high.

Certainly anticipation for a potential federal US market could keep sentiment riding high for some time to come. With the US population being roughly 10 times that of Canada, federal legalization in the US would mean enormous growth potential, which would logically get reflected in the Tilray stock price.

With the industry just getting started, Tilray’s stock price might have even greater heights ahead.

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Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.