Days after casting doubt on Canadian marijuana producer Cronos Group (CRON), short-seller Citron Research is now betting that rival Tilray (TLRY) is destined to fall. But Tilray stock, Cronos stock and Canopy Growth (CGC) all rallied Tuesday.
XCitron, in a tweet on Tuesday, called Tilray stock"by far" the "most expensive in space."
Marijuana Stocks Jump
Tilray stock, however, only got more expensive on Tuesday. Shares soared 18% to 77.01 in the stock market today, hitting a fresh all-time high. Tilray's market cap is at $7 billion, though the company reported just under $10 million in quarterly sales last week.
Citron LOVED $TLRY at $26 but now we are SHORTING stock. Cowen lowered est and still raised tgt $62 only shows "RETAIL INVESTORS GONE MAD" and forgot $TLRY went public at $17 - 6 weeks ago. We would expect an equity raise at these levels. By far most expensive in space.
— Citron Research (@CitronResearch) September 4, 2018
The rally on Tuesday, for Cronos, came after it announced a partnership with Boston-based Gingko Bioworks, a biotech company. Gingko, Cronos said, "will complement Cronos Group's technologies for producing a full spectrum of cannabinoids." Cronos has also agreed to issue stock as Gingko hits certain production milestones.
The statement also said that the use of Gingko's technology is "expected to unlock access to potentially medically-important and valuable cannabinoids that are present only in low quantities in the plant."
In an interview last week, Citron Research Executive Editor Andrew Left said Tilray stock was overvalued. Citron, in a separate tweet on Tuesday, said Tilray was more expensive than Canopy despite having no deal with a beverage maker.
Interest from beverage makers, like Constellation Brands (STZ) and Diageo (DEO), sent marijuana stocks screaming higher last month.
In response to the many questions. $TLRY 3x more expensive than leader Canopy despite no bev deal, behind in funding, and lower capacity. Here is the chart you requested pic.twitter.com/54uLaTQWvY
— Citron Research (@CitronResearch) September 4, 2018
Cronos' stock on Thursday crashed 28% after Citron, in a report, said the company was "all talk." The report raised questions about the size of Cronos' supply agreements with Canadian provinces. It claimed Cronos, unlike other producers, did not disclose the size of those deals. It also questioned second-quarter sales trends in Germany and the timing of a fundraising announcement following a product recall.
Cronos, when asked last week, did not respond to questions about the size of the agreements, its performance in Germany or the recall. But it forwarded along analyst research that disputed Citron's allegations, arguing that other producers also haven't disclosed supply amounts.
Cronos also recently announced a five-year to deal to supply at least 20,000 kilograms of cannabis a year to the Canadian division of Oregon-based Cura.
Canopy Growth 'Land Grab'
Canopy Growth, the Canadian marijuana giant backed by Constellation, remains the last U.S.-traded pure-pot play that Left hasn't targeted.
Cowen analysts said on Tuesday that Canopy Growth has filed 39 patent applications in the U.S. The effort, they said, is part of an intellectual property "land grab" strategy as cannabis restrictions peel away in U.S. states and nations abroad.
The filings, according to Cowen & Co. analysts, relate to insomnia, anxiety, fibromyalgia, ALS, pain management, and other areas.
Snoop Vs. Marley
Analysts at Cowen also say that Canopy has a leading share of provincial marijuana supply agreements in Canada. A Google Trends analysis in Canada also showed that Leafs by Snoop, one of Canopy's weed brands, has in recent weeks out-trended Marley Natural, which resides under the Tilray umbrella.
Canopy stock climbed 14% on Tuesday, hitting a new high. Cronos stock jumped 13%.
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The post Marijuana Stocks: Short-Seller Citron Research Puts Tilray Stock In Cross Hairs appeared first on Investor's Business Daily.
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