Tilray Gets Dose of Reality as Pot Stocks Reverse Gains

(Bloomberg) -- Tilray Inc. fell as much as 36% Thursday, halting a record three-day rally as Reddit-inspired traders attempted to pump up the cannabis sector to multiyear highs.

The loss helped push the ETFMG Alternative Harvest ETF, known by its ticker MJ, 19% lower as other pot stocks see-sawed from gains to losses.

The week’s earlier rally was reminiscent of late 2018, when Canada was about to become the first large economy to legalize recreational marijuana use, sending cannabis stocks surging. Tilray’s three-day gain to start the week was its biggest ever, although it’s still well below the intraday high of $300 it hit in September 2018.

Tilray’s fall came as Anson Funds Chief Investment Officer Moez Kassam put into question whether the best cannabis stocks were rallying ahead of possible regulatory reforms in the U.S.

Only certain cannabis stocks are easily available to Robinhood or day traders, which means many Canadian-listed firms with U.S. operations may be excluded. Retail investors may be ignoring possibly better bets such as Curaleaf Holdings Inc. and Harvest Health & Recreation Inc., making this an ironic trade, Kassam said.

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