Cannabis Stocks Tilray, Sundial Strike Major Gains Amid High Retail-Investor Interest

Cannabis Stocks Tilray, Sundial Strike Major Gains Amid High Retail-Investor Interest

Shares of Tilray Inc. (Nasdaq: TLRY) and Sundial Growers Inc. (Nasdaq: SNDL) recorded double-digit gains in Wednesday’s regular trading session amid high retail-investor interest in the two Canada-based cannabis companies.

What Happened: Shares of Tilray gained 11.9% and Sundial Growers’ shares rose 13% in Wednesday’s trading after e-commerce giant Inc. (Nasdaq: AMZN) said it supports the federal legalization of marijuana and will drop marijuana-testing requirements for some of its workers.

Optimism that cannabis reforms will make it easier for companies to do business also boosted these stocks.  

Both the companies are now seeing renewed interest from retail investors. Tilray was the fourth-most mentioned stock on Reddit’s r/WallStreetBets forum over the past 24 hours with 739 mentions, while Sundial was at the seventh position with 546 mentions, data from Quiver Quantitative showed.

BlackBerry Limited (NYSE: BB), AMC Entertainment Holdings Inc. (NYSE: AMC) and GameStop Corp. (NYSE: GME) were the three most-discussed stocks on the forum during the period.

Tilray, which recently closed a merger with Aphria Inc., also took the top position in the top 10 trending tickers list compiled by Stocktwits.

Why It Matters: Tilray and Sundial Growers, both Reddit favorites, had peaked in February amid similar retail interest, but have fallen since then as the retail trading frenzy faded. Tilray shares hit a 52-week high of $67.00 on Feb. 10, while Sundial shares touched a 52-week high of $3.96 on Feb. 11.

However, Bloomberg reported in May that short sellers are again betting cannabis stocks will fall and overall short interest has increased in U.S. and Canadian cannabis stocks. The increase in short interest makes the chances of a short squeeze more likely.

Price Action: Tilray shares closed 11.9% higher in Wednesday’s trading at $19.00, while Sundial shares closed 13% higher at $1.13.

© 2021 Benzinga does not provide investment advice. All rights reserved.

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