Tilray stock surges after exporting cannabis treatment to Australia

An employee checks cannabis plants at a medical marijuana plantation in northern Israel March 21, 2017REUTERS/Nir Elias

Tilray, one of the largest Canadian marijuana companies, said Tuesday that it had successfully shipped a CBD product to Australia for treatment of children with epilepsy at three hospitals in Victoria. CBD is one of the nonpsychoactive compounds found in cannabis.

The company’s stock surged 17% following the announcement, breaking a three-day losing streak for the $8.7 billion company.

It’s the second round of medical cannabis exporting by Tilray to the Australian state under the government’s “compassionate access” scheme, which first treated 29 critically-ill patients in March 2017. The patients were the first in Victoria to legally access marijuana-derived medicines.

Similar export announcements by Tilray last week — involving treatment of Essential Tremor (ET) in California — also sparked a rally in shares, before falling 53% from their September 19 high of more than $119 apiece. Wall Street remains concerned abut stretched valuations following the stock’s more than 500% surge since its July initial public offering, giving it an average price target of $62 — implying a possible drop of 57%.

One prominent short-seller, Andrew Left of Citron Research, compared the rally in cannabis names to the cryptocurrency craze of early 2018: “These stock prices are equivalent to bitcoin mania – although it is even more  ridiculous than bitcoin,” he said on September 12, when Tilray shares were trading even lower than where they were on Tuesday.

Markets Insider