Canadian cannabis company Tilray Inc.’s stock soared 51% on Wednesday to extend their Tuesday gains of more than 60%. These gains are partly attributed to the same investor group, R/wallstreetbets, that caused GameStop Inc.'s shares to climb to record highs. It appears the Reddit forum has now shifted its focus to the cannabis industry. Given the last few weeks of explosive trading volatility involving Robinhood, GameStop, and others, Reddit’s forum has become a must-watch for traders at financial institutions since concerted action drastically disrupted the market.
The flood of interest in Tilray’s stock is seen as a positive by cannabis investors. Still, others are concerned about the volatility and that cannabis stocks may suffer the same fate as GameStop—whose shares have fallen 85% since their closing peak of $347.51 on January 27 of this year. Despite the instability, GameStop closed Wednesday at $51.20 a share—a 1200% increase from a year ago.
Reddit isn’t solely responsible for the uptick. Many are optimistic that cannabis may be legalized at the federal level by a Democratic president, Joe Biden, and a Democratic Congress. Recently Senate Majority Leader Chuck Schumer and two other Democratic senators said they would push to pass sweeping legislation that would end the federal prohibition on marijuana.
Tilray has had recent successes in Europe—also driving up investor interest. Indeed, just this Tuesday, Tilray announced it had reached an agreement with British company Grow Pharma to import Tilray’s products into the country. Tilray reached a similar deal with Spain to import products from its facility in Portugal.