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Marijuana growers can start selling to recreational users in Canada on Wednesday.
Lars Hagberg / AFP / Getty Images
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Wednesday is the day that Bruce Linton, boss of Canopy Growth, will become Canada's new Thanksgiving. That's because on October 17, cannabis growers like Canopy can begin selling to recreational customers in Canada. The crowd of retailers also favors marijuana stocks, so the big names of the weed have rebounded.
Shares in industry leader Canopy climbed 14% on Monday and 6.8% on Tuesday to close at $ 53.01 per share. N ° 2
Aurora Cannabis
(ACB.Canada) was up 10% on Monday, but closed down 7.2% Monday at C $ 13.98 per share. Another success has been
Tilray
(TLRY), whose shares were up 12% Monday but closed down 4.4% Tuesday, to $ 158.38 per share, despite the start of coverage by benchmark analyst Mike Hickey. He thinks Tilray is a buy and can go up to $ 200.
Hickey's price target is over $ 18 billion. Since the company lost less than $ 10 million in sales in June, the analyst spends a lot of time talking about the big picture: legalization, international opportunities and cross-border drinks. When he arrives at the calculation, Hickey justifies his price target by 15 times his sales forecast of Tilray in 2023 (updated over four years). It is a young industry that, according to the fans, will generate generous courses, starting tomorrow.
The benchmark analyst notes that Tilray is well funded, compared to many of his rivals. The company was created from the Seattle venture capital fund, Privateer Holdings, which is backed by investor Peter Thiel. He reported $ 163 million on an initial investment in July and another $ 435 million in a recent convertible agreement. As one of the few known weed stocks in the United States, Tilray trade has been as volatile as bitcoin.
When the Canadian pot goes on sale this week, the websites will be primarily selling. Provinces in the country have fallen behind in the opening of government-run stores and the licensing of commercial stores. But groups like Tilray have a lot of experience in selling marijuana online to buyers with prescription drugs, Hickey points out. "At the present time, e-commerce is the preferred retail channel for selling medical cannabis to patients," he says, "rather than creating a brick and mortar retail network. ".
As Tilray's shares are down today, investors did not seem to take note of Benchmark's recommendation. The same thing happened last week, when Tilray sold despite enthusiastic support from Cowen & Co.'s Vivien Azer, who raised her price target from $ 62 to $ 172.
These stocks have their own minds, zagging when the market zigs. After a quarter or two of the recreational sales, investors will have a better basis for valuing these expensive stocks
Write to Bill Alpert at [email protected]
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