Short-seller Citron Research said a bubble has created a “ridiculous valuation discrepancy” for recent marijuana IPO Tilray (TLRY), adding that swelling prices in marijuana stocks are equivalent to “Bitcoin mania.” But Tilray stock continued to rise, powering higher even as fellow U.S.-listed marijuana stocks Canopy Growth (CGC) and Cronos Group (CRON) retreated.
Citron said that Tilray, which became the first pure-play marijuana IPO on a big U.S. exchange in July, would need to raise more cash to finance its big expansion goals — money that's not guaranteed. The firm also said that falling cannabis prices from more competition would hurt sales industry-wide and, as more companies go public, the novelty of companies like Tilray will wear off.
“Soon the stock market will have more options as the deepest cannabis IPO pipeline in history will detract capital from Tilray and traders will have new toys to play with,” Citron said.
