Yes, legal weed is currently in a bubble. People are being just as stupid here as they were with Bitcoin. Canopy currently has a market cap of $12.3 billion on sales TTM sales of just under $88 million. Tilray is far worse with a market cap of $19.7 billion on TTM sales of $27.6 million. Anyone buying Tilray at these prices is making an astoundingly risky bet for what I consider to be very limited upside.
it's certainly feeling like a bubble. it'll be interesting to see who emerges on top in a few years, when all the dust settles. tilray got way over-hyped because it was the first public pot stock on the nasdaq.
If that's the reason it was getting so much buy-side action, it doesn't even make sense to me. It wasn't even the first US-exchange traded pot company, Canopy Growth Corporation was listed on the NYSE before Tilray was listed on Nasdaq. The stock was getting out of control after the CEO made some media appearances, especially Cramer, where he said he sees the global weed industry being worth $150 billion annually. Take it with a grain of salt folks, even if that's true it doesn't all go to one company! Plus the guy is talking his own book.
It's nice to know that the stock has come back to Earth a little bit, although it's still insanely valued. It's down 53% in the last two days from $263 to $123. I don't feel bad for anyone buying in the $200s, man do those guys deserve it for being so irrational.
Extremely overpriced, I would advise everyone to stay far away from marijuana stocks. "Once it becomes more legal and laws become more relaxed their profit margins will shrink to almost nothing since people will be able to easily grow their own.
we are a very long way from market saturation. there is an incredible amount of new demand. it's actually fucking annoying as a consumer---like 80% of the people i see in the shops now are normie weekend warrior types who take forever at the counter because they've smoked weed like twice in their life.
and there's no way most people will ever grow their own. especially when you consider how hyper-consumerist society is now. growing takes months of preparation, hard work and often good luck (regarding weather, unless you have good indoor growing space).
I also think it's highly unlikely the home-grown movement will seriously dent corporate pot sales. The real threat though is oversupply of a commodity product that will absolutely hammer margins for these companies. They are all very aggressively increasing growing capacity in what will be a very commoditized product. The margins they are enjoying now are very likely to come under intense pressure in the future years in my opinion.