Bullish options flow was detected in TLRY stock on September 3, 2019. A whopping 11,069 calls trading, 1.4x expected, and implied vol increasing over 1 point to 85.73%. 9/6 weekly 27.5 calls and 9/6 weekly 28 calls are the most active options, with total volume in those strikes near 2,400 contracts.
On August 29, 2019, the Illinois Department of Financial and Professional Regulation announced the first “Same Site” adult use cannabis licenses, which will allow an existing medical cannabis dispensary to obtain an adult use dispensing license. The license will permit the dispensary to begin adult use cannabis sales at that location starting January 1, 2020, provided the dispensary complies with local zoning rules or other local laws. In addition to opening adult use dispensaries at the same site of their medical cannabis dispensaries, existing medical cannabis dispensaries are permitted under the law to open a second site for adult use sales at a different location, the agency said. Starting January 1, 2020, the law permits Illinois residents to legally possess up to 30 grams of cannabis flower and up to five grams of cannabis concentrate.
Also on August 29, 2019, Tilray entered into a definitive agreement pursuant to which Tilray, through a wholly-owned subsidiary of High Park, will acquire all of the issued and outstanding securities of 420 Investments, an adult-use cannabis retail operator headquartered in Calgary, Alberta. Four20 provides adult-use cannabis consumers with a retail experience focused on product selection, education and community. Four20 currently operates six licensed retail locations and has 16 additional locations secured in locations in Alberta, including Canmore, Calgary and Edmonton. Tilray and High Park will leverage Four20’s retail expertise and brand and market knowledge to expand into other Canadian provincial markets where licensed producer retail ownership will be permitted in the future. Under the terms of the agreement, Tilray will deliver up to C$110M consisting of C$70M in Tilray class 2 common stock at closing and $40M in common stock subject to the achievement of certain performance milestones by Four20. High Park and its affiliates have fulfilled adult-use supply agreements and purchase orders across Canada since the federal legalization of adult-use cannabis on October 17, 2018. High Park will continue to offer consumers a portfolio of adult-use products as it grows its supply chain and expands its production capacity in Canada. Four20 will operate as a wholly-owned subsidiary of Tilray and will continue to offer consumers a selection of brands and products from craft and mainstream producers including High Park. The transaction is subject to regulatory approval. Completion of the transaction will be subject to customary terms and conditions, including approval by Four20 shareholders and court approval of the arrangement. It is anticipated that the closing of the transaction will be completed by the end of Q1 2020.
The daily chart of TLRY stock looks fairly horrible but that may be the time to buy when everybody else is disgusted by the stock chart.
TLRY stock does not meet the minimum requirements to make it in the long-term buy and hold GST Portfolio. TLRY did $94.5 million in sales last year but it trades at a market cap of over $3 billion which puts the P/S ratio at 32.4. However, a short-term swing trade may be setting up in TLRY stock if we get a candle over candle reversal on September 4, 2019. It’s also important to note that institutional investors have increase their long positions in TLRY stock by an incredible 105.13% over the previous 3-month period.
Disclosure: We do not hold any position in TLRY stock.