Although artificial intelligence continues to dominate business headlines, Cannabis specialist Tilray (TLRY) provided perhaps a much-needed change of pace. Thanks to the company’s strong sales results, sentiment for TLRY stock skyrocketed, overshadowing myriad other highflyers.

In the fiscal first quarter, Tilray posted a flatline count for adjusted earnings per share, beating out expectations calling for a 3-cent loss. In addition, the move to breakeven represented an improvement over the loss of a penny in the year-ago quarter.

On the top line, the cannabis operator generated $209.5 million, beating out the consensus view of $204.55 million. Last year, the revenue tally landed at $200 million. To note, the latest results represent record Q1 sales.

Management didn’t provide an official guidance during its conference call. Still, the leadership team broadcasted an optimistic note for the future. Tilray Chairman and CEO Irwin Simon stated, “Looking forward, I am confident in Tilray’s ability to seize the transformative opportunities ahead, especially as the U.S. explores cannabis rescheduling and the European cannabis landscape continues to evolve.”

Following the disclosure, TLRY stock shot higher by about 13% during the premarket session. As of this writing, the security has gained 25%. Still, investors will now question whether the move is sustainable. One area that might provide some valuable insights is the options market.

Specifically, data from Fintel notes that, on a cumulative basis, net long option premiums bought — a metric that backs out bearish options and bakes in bullish equivalents — reached nearly $9.92 million from Sept. 11 through Oct. 8. Further, the correlation coefficient between this trend and the price action stood at 91.18%.
 

In other words, as the TLRY stock price has increased, it’s been the smart money that has piled into the cannabis operator — given the presupposition that the options market is indeed largely the venue of smart money traders.

Combined with a high short interest of 14.06%, it’s not out of the realm of possibility that TLRY stock could see continued gains as the bears potentially abandon their short exposure.

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