Canadian marijuana stocks have fallen from their February highs. But one player in the industry, Tilray (TLRY), got a lot bigger after completing its merger with Aphria. Does that make any pot stock a good buy now?
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Tilray and Aphria announced plans to merge in December. While consolidation has tightened up operations in other industries, some analysts questioned whether the deal was the right fit, as the industry still loses money and the U.S. becomes a bigger focus for investors.
Moreover, marijuana stocks also slid after Aphria last month reported results that missed expectations, citing issues with coronavirus lockdowns. The results, some analysts said, set the stage for what could be a tough round of earnings for the cannabis industry in Canada, which is grappling with a spike in cases and new quarantine measures.
Still, the cooldown follows a whirlwind of bullish signs for the cannabis industry.
More states, like New York and Virginia, are legalizing. Cannabis industry executives also predict a domino effect — with neighboring states feeling pressure to legalize in order to prevent a flight of tax revenue to newly legal states. And they say having more legal states increases the likelihood the government will take action to roll back restrictions on a national level.
However the marijuana industry’s finances are, in many ways, still a mess. And profitability for most companies has been hard to come by.
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Canadian marijuana stocks have fallen from their February highs. But one player in the industry, Tilray (TLRY), got a lot bigger after completing its merger with Aphria. Does that make any pot stock a good buy now?
X
Tilray and Aphria announced plans to merge in December. While consolidation has tightened up operations in other industries, some analysts questioned whether the deal was the right fit, as the industry still loses money and the U.S. becomes a bigger focus for investors.
Moreover, marijuana stocks also slid after Aphria last month reported results that missed expectations, citing issues with coronavirus lockdowns. The results, some analysts said, set the stage for what could be a tough round of earnings for the cannabis industry in Canada, which is grappling with a spike in cases and new quarantine measures.
Still, the cooldown follows a whirlwind of bullish signs for the cannabis industry.
More states, like New York and Virginia, are legalizing. Cannabis industry executives also predict a domino effect — with neighboring states feeling pressure to legalize in order to prevent a flight of tax revenue to newly legal states. And they say having more legal states increases the likelihood the government will take action to roll back restrictions on a national level.
However the marijuana industry’s finances are, in many ways, still a mess. And profitability for most companies has been hard to come by.
