Tilray: Unmitigated Disaster for Speculators

Tilray (TLRY), a Canadian-based company, is a tulip-mania boom and bust. The pot stock has all the ingredients to attract speculators. As buying interest wanes, those still holding the stock will wonder how the company traded at nearly $20 billion market cap at its peak on Sept 19. The stock last reported yearly income of just $20 million income.

Tilray is pure speculation. On Sep 19, the exchange halted trading in the stock three times. While the stock topped $297, it ended the week down, closing at $123. Valuations have no meaning for TLRY stock. Speculators figure the upcoming legalization in just one of the G7 nations, Canada, will magically justify Tilray’s stock price. Yet shareholders have no voting rights, so if anything goes wrong, insiders have all the vote in the ratio of 3:1. Class 1, held by insiders, have a 3:1 voting right over the IPO’d Class 2 shares.

Chances are good that as initial revenue numbers come out in the months ahead for marijuana stocks, they will be disappointingly weak. Poor sales and excess supply, plus falling prices, will hurt those invested in this sector.
Avoid TLRY stock. Holding GW Pharmaceuticals (GWPH), whose market cap is $3.98 billion after the $20+ rally, may play out compared to trading Tilray stock.