Tilray Stock Price Surges 50%, Thanks To Reddit's WallStreetBets Forum

Rookie day traders from controversial Reddit channel WallStreetBets on Wednesday targeted the shares of a Canadian pharmaceutical and cannabis company, weeks after the subreddit initiated the GameStop frenzy.

Shares of Tilray, a global leader in cannabis research, cultivation and distribution, soared by 50% on Wednesday after the Reddit trading community bet on the federal legalization of the plant under President Joe Biden’s administration. The recent surge brings the company stock’s year-to-date gain to more than 670%.

Tilray has previously experienced a short squeeze similar to GameStop and AMC. After it went public in June 2018, the Canadian company’s stock rose about 1,400% between July and September. Short interest on the stock also surged to 3.5 million shares.

“I remember getting five different calls from Nasdaq in a single day about our stock being halted because the short sellers were being squeezed so badly,” Tilray CEO Brendan Kennedy said, referring to the 2018 short squeeze. “My advice to those CEOs would be that, at times like this, your company is not your stock and your stock is not your company.

Rookie day traders from WallStreetBets also targeted other cannabis stocks. Smith Falls, Ontario-based Canopy Growth Corporation -- formerly Tweed Marijuana Inc. -- saw its shares ri.se by 6%, adding to its 110% rally in the first quarter of 2021.

Shares of Aphria, an international producer and distributor of medicinal and recreational cannabis based in Leamington, Ontario, soared by 10%, bringing the company’s year-to-gain to 280%.

Edmonton-based cannabis producer Aurora Cannabis also popped 20%, adding to its 120% rally in 2021.

“We believe the rally in Canadian names is mostly driven by retail investors, maybe fueled by Robinhood and Reddit, that’s really piling into the Canadian cannabis names in particular,” Pablo Zuanic, an analyst at Cantor Fitzgerald, told CNBC.

The recent push from the WallStreetBets traders comes after former South Carolina Democratic Party Chair Jamie Harrison was picked to lead the Democratic National Committee (DNC).

During his 2020 campaign for a Senate seat in July, Harrison stressed the need to legalize, regulate and tax marijuana as a way to promote racial justice.

“We know that marijuana arrests, including those for simple possession, account for a large number of drug arrests,” Harrison said during his campaign. “The racial disparities in marijuana enforcement — black men and white men smoke marijuana the same rates, but black men are much more likely to be arrested for marijuana possession — is just unacceptable.”