Cannabis stocks were higher Monday, as investors reacted to the latest tie-ups in the sector and awaited the release of quarterly earnings from Tilray Inc. after the close.
With its stock expected to lose 12 cents per share on revenue of $14.15 million, the more important consideration is Tilray’s efforts to create credibility with the marijuana and general investor communities., reports Investors Place this morning.
Analysts have actually been mixed on their evaluation of Tilray. Readers may remember that last week, Jefferies analyst Owen Bennett said Tilray was over-valued, adding that he struggled to justify the company’s current valuation.
However, Cowen analyst Vivien Azer takes a different view. She cites the acquisition of Manitoba Harvest in late February as giving Tilray access to a broad portfolio of food products currently distributed in 16,000 stores in the U.S. and Canada, with the opportunity to expand beyond the food category, including extracts.
Azer maintains an “outperform” rating on Tilray shares and a price target of $150, according to Yahoo Finance.
But the question on everyone’s mind is: “With cannabis a red-hot sector right now, when was the last time the second largest player dramatically underperformed its peer group and lost money for investors?” Tilray may be the first.
Another thing many in the industry overlook is that in the United States, marijuana is still illegal at the federal level. Tilray expects to launch CBD-infused products in the U.S. this summer. But the legal status of CBD products is still unclear.
As long as CBD-infused products are derived from hemp, it’s legal to buy them over the counter. While hemp was legalized under the Trump administration’s Farm Bill, it still remains under the supervision of the Food and Drug Administration (FDA).
