Power to the People: Before Gamestop, there Was the Cannabis Stock Tilray

If you are on the internet, you have probably heard about Gamestop and the billion dollar financial losses that some hedge funds are in line to suffer because they bet on the gaming retailers stock to plunge, a practice known as short selling. A short squeeze has occurred because folks in a Reddit forum got wind of the intentions of these billion dollar hedge funds and encouraged folks to buy up Gamestop stock, ruining the bet of those that gambled on the company losing value. I’m no financial markets expert, and must of what I knew about short selling is from watching the movie The Big Short about the housing market collapse. The situation is pretty confusing for lay people like myself, so I started educating myself.

One of the things that I learned is that the Canadian cannabis company Tilray experienced a similar short squeeze situation, albeit on a smaller scale, as CNBC reported:

The trading frenzy in shares of GameStop and now AMC Entertainment looks familiar to Tilray CEO Brendan Kennedy.

Back in 2018, shortly after it went public, the Canadian pot producer’s stock was ensnared in a wild short squeeze and rose about 1,400% between July and September of that year on an intraday basis.

“I’ve had a little bit of PTSD over the last couple of days,” Kennedy said Wednesday on CNBC’s “Squawk on the Street.” “I remember getting five different calls from Nasdaq in a single day about our stock being halted because the short sellers were being squeezed so badly.”

As noted by CNBC, Tilray’s stock rose from about $20 to $300 and hedge fund short sellers lost about $600 million. With billions of dollars at stake on the Gamestop short squeeze saga, the Wall Street empire has struck back against the Reddit rebels and Robinhood and other stock trading apps have temporarily frozen the ability to trade Gamestop stocks. Robinhood has since been hit with a class action lawsuit. Wall Street watchers, grab your popcorn.

With cannabis likely being legal in a few years, Tilray’s CEO is on the record expecting federal legalization within two years while I’m not quite as optimistic, the cannabis industry will only get bigger. As more cannabis stocks are traded, more will likely be put in positions like Gamestop or Tilray was in, unless regulations are put into place to curtail short selling. If you’re gonna invest in cannabis or any other stocks, you’ll want to do your due diligence as it is always buyer beware. In the meantime be sure to support locally owned businesses like Pendleton’s Kind Leaf as the money spent there helps the local economy, not foreign corporations or billion dollar hedge fund operators.

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