Why Tilray’s (TSX:TLRY) Stock Price Soared 7% Today

Here’s the key reason why Tilray Inc.’s (TSX:TLRY)(NASDAQ:TLRY) stock price soared today. Let’s also find out why it might continue rallying in the long term.

| More on:
grow dividends

Image source: Getty Images

What happened?

Tilray’s (TSX:TLRY)(NASDAQ:TLRY) share price surged by nearly 7% to $17.68 per share this afternoon. These sharp gains in the popular Canadian pot stock came after the company highlighted its new investment in the American cannabis firm MedMen Enterprises (CNSX:MMEN).

So what?

On Wednesday, Tilray, in a press release, said that it has acquired most of the senior secured convertible notes of MedMen from funds affiliated with Gotham Green Partners. After converting these notes into stocks — upon getting necessary regulatory approvals, Tilray is likely to have minority stakes but still a significant equity position in MedMen.

Tilray is a Nanaimo-based cannabis firm that mainly focuses on the research, cultivation, processing, and distribution of various medical cannabis products to pharmaceutical distributors. Its key markets include Canada, the United States, Europe, Australia, and Latin America.

Tilray’s latest investment in MedMen could potentially help its footprints grow fast in the U.S. market. It could be the primary reason why Tilray stock rallied after the news came out.

Now what?

Tilray’s recent merger with Aphria made it the world’s largest cannabis company. The deal also clearly reflected Tilray’s aggressive expansion plan for the international market.

MedMen is a well-known American cannabis retailer. It currently operates nearly 25 retail locations and holds 21 licences. While MedMen’s expansion in the U.S. could be subject to several factors, including federal legalization of cannabis, the company plans to expand its footprints in the international market before that. Considering these factors, Tilray’s investment in MedMen could prove to be a key step in helping it grow fast in the U.S. market once federal legalization is approved.

I believe Tilray’s latest move to invest in MedMen could pay off well in the long term and help it grow faster than its peers. That’s why long-term growth investors may want to consider adding TLRY stock to their portfolio right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Cannabis Stocks

Powder of Cannabis (Drugs), Analysis of Cannabis in laboratory.
Cannabis Stocks

Canopy Growth: Is There Budding Potential in the Cannabis Market?

Canopy Growth stock hit 52-week lows recently on news of needing to re-file on its BIoSteel business, so what now?

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

What’s Happening With Cannabis Stocks in May 2023?

Cannabis stocks were up this week, as the market began to turn, but how long will it last, and is…

Read more »

Cannabis smoke
Cannabis Stocks

Are Cannabis Stocks a Good Buy in May 2023?

If you're going to buy cannabis stocks, these are pretty much the only two I would consider. Even so, you…

Read more »

edit Cannabis leaves of a plant on a dark background
Cannabis Stocks

Aurora Cannabis: Time to Light Up Your Portfolio?

Here's my take on whether Aurora Cannabis (TSX:ACB) is worth adding to a growth portfolio right now, given its growth…

Read more »

Target. Stand out from the crowd
Tech Stocks

These Undervalued TSX Stocks Are a Bargain in May 2023

If you're willing to bet on a rebound, these are the three TSX stocks I would consider first as they…

Read more »

A cannabis plant grows.
Cannabis Stocks

Tilray Stock Is Scraping 52-Week Lows: Will it Bottom Out Soon?

Tilray (TSX:TLRY) stock remains down 53% in the last year, but when will this company hit the bottom and start…

Read more »

Medicinal research is conducted on cannabis.
Metals and Mining Stocks

2 Canadian Stocks That Are Simply Too Cheap to Avoid

These two Canadian stocks have sunk lower and lower, which is why now could be the right time for long-term…

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

1 Marijuana Stock I’d Buy Over Aurora Cannabis

Explore a promising marijuana stock that outshines Aurora Cannabis. Unveil the investment opportunity to boost your cannabis portfolio.

Read more »