With the stock price of cannabis company based in Canada: Tilray (TLRY), seeing an increase in market growth of up to 90% on a single trading day, one cannot but wonder about what could have led to this sharp rise in value? A report has shown that this sudden surge in market price was brought about as a result of the announcement made by the firm that it will be partnering with pharmaceutical firms to further improve their services.
Tilray’s 90% Increase in Price
At a time, Tilray’s (TLRY) market cap surpassed that of Tiffany, American Airlines, and Chipotle. This rise in market cap didn’t last long though, as the shares soon experienced a period of correction. Nevertheless, even after the correction, the company’s market cap was still 40% larger than it used to be. However, few days later, the cannabis company experienced another drop of about 19%. Even after this drop, its market cap was still 200% bigger than it used to be after the company’s IPO. A similar thing happened to Aurora (ACBFF) and Canopy Growth (CGC).
Cannabis Company Stocks
The Cannabis stock group has been compared to that of cryptocurrency in general. This is because they share similarities such as high volatility, widely supported by the young audience, regulatory uncertainties as well as been affected by the media and news. All these characteristics put both industries in the same bracket.
Based on a statement from the SEC Office of Investor Education and Advocacy’s Chief Counsel, Owen Donley III, fraud is another major characteristic that ties the two industries together. He also stated that he doesn’t find cannabis and crypto space being related unbelievable.
SEC Investor Warning
This statement is coming a few weeks after the SEC released an investor warning in relation to the marijuana industry. The warning made its known that whenever there is a news of marijuana gaining legal status in a state, one should always look out for scammers. These scammers are known for peddling too good to be true deals and then rush their victims into making decisions.