- The Canadian cannabis producer Tilray has surged more than 800% since its initial public offering in July.
- Citron Research says the gains are "beyond comprehension."
- The firm says it's short the stock.
- Watch Tilray trade in real time here.
The notorious short-selling firm Citron Research has doubled down on its bet against surging cannabis stocks.
In a tweet fired out Wednesday, the Andrew Left-led research firm said the more than 800% gain in Tilray shares since their July initial public offering is "beyond comprehension" and that it is holding a manageable short position "until rationality sets in." Shares are up more than 40% on Wednesday after Tilray CEO Brenden Kennedy appeared on CNBC's "Mad Money."
The huge gains in marijuana names started back in the middle of August when Constellation Brands, the beverage maker behind Corona and Svedka vodka, invested $4 billion in cannabis producer Canopy Growth, sparking a wave of interest in the space. Just this week, Coca-Cola was reportedly in talks with rival Aurora Cannabis to develop beverages infused with the nonpsychoactive compound CBD.
On August 30, Citron came out with a scathing report on Tilray rival Coronos and the marijuana space in general.
"Citron would like to inform investors of caution on the ongoing and real green rush," the firm said at the time. "Although the hype is big and the prohibition after 100 years is real, it is critical to understand that in the Canadian landscape, there are over 100 licensed producers and there will ultimately be more losers than winners."
As for Coronos, Citron said the cannabis producer "appears to have been deceiving the investing public by purposely not disclosing the size of its distribution agreements with provinces – unlike every other major cannabis player."
It added: "Our sources have informed us that it’s because the agreements are so small they could never justify the premium investors are paying for the stock."
Left is perhaps best known for accusing Valeant Pharmaceuticals of being a "pharmaceutical Enron," and helping raise questions about the firm's accounting and relationship with the specialty pharmacy Philidor.
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