Marijuana Stocks rebounded strongly on June 10, 2019 after pot stock, Tilray, Inc. (NASDAQ: TLRY) announced that it plans to extend its lock-up on 75 million shares held by Privateer Holdings. The terms of the deal have Privateer’s shares locked up for “up to two years”, but further to this, the fund may sell that stock “in an orderly way” over that period.
Pot Stocks News Fuels Marijuana Stocks Run-Up
Shares of Tilray, Inc. (NASDAQ: TLRY) rallied for most of the day. The stock had long been beaten down for months after having once traded as high as $300 a share after it IPO’d. Not only did Tilray see one of its highest share volume days in months, the marijuana stock it fresh June highs.
Mark Castaneda, Chief Financial Officer of Tilray, Inc. (NASDAQ: TLRY), said, “We appreciate the long-term confidence that Privateer has in the Tilray business and we look forward to having their investors as part of our stockholder base. We believe this transaction will give Tilray, Inc. (NASDAQ: TLRY) greater control and operating flexibility while allowing us to effectively manage our public float.”
Not an Isolated Incident for Marijuana Stocks
This wasn’t a standalone event either. The broad sector for pot stock took off in proper fashion. Both the Alternative Harvest ETF (MJ) and AdvisorShares Pure Cannabis ETF (YOLO) printed new highs for the month of June. Other lists of marijuana stocks including the likes of Canopy Growth (CGC), Aphria (APHA), Village Farms (VFF) and Cronos Group (CRON) all posted new June highs during their trading session on Monday (June 10th).
This news came on the heels of Tilray’s last announcement that it had signed an agreement with Neptune Wellness Solutions Inc. Tilray, Inc. (NASDAQ: TLRY) will be providing Neptune a minimum volume of 125,000 kilograms of cannabis and hemp biomass to be processed. Further to this, the first shipment is anticipated to be received in September of this year.
The appeal to Tilray, Inc. (NASDAQ: TLRY) has been due, in part, to the thinner supply of shares that the company has outstanding. Of course, this lockup agreement and “orderly” selling strategy could be less detrimental to Tilray’s float in comparison to some of the other cannabis companies in the public markets.
“We believe this transaction will give Tilray, Inc. (NASDAQ: TLRY) greater control and operating flexibility while allowing us to effectively manage our public float.”
- Tilray CFO Mark Castaneda.
What Does Future Hold for Marijuana Stock Tilray, Inc. (NASDAQ: TLRY)?
In light of today’s positive trading momentum, there are still concerns for the cannabis company’s future. In a Bloomberg report, Tilray’s CFO said that the company will not make a profit for at least another year. The pot producer has been throwing money around as of late to complete more deals within the space.
Mainly the focus has been on the U.S. CBD market among other opportunities. “If the world had stopped last fall, we had good visibility to having positive EBITDA at the end of this year, call it Q4 of this year,” CFO Mark Castaneda told Bloomberg in an interview. “This industry changes so fast, and opportunities present themselves so fast.”