The stock market was pretty quiet on Wednesday morning, as many investors waited to get more clarity on how the most recent meeting of the Federal Open Market Committee went before making big bets on the future direction of the financial markets. As of 11:30 a.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 16 points to 25,907. The S&P 500 (SNPINDEX:^GSPC) climbed 3 points to 2,782, while the Nasdaq Composite (NASDAQINDEX:^IXIC) was higher by 19 points to 7,506.
Many stocks made big moves after revealing their latest financial results, but a couple of high-profile companies had different news to report. In particular, Tesla (NASDAQ:TSLA) found itself facing a familiar phenomenon that's beginning to frustrate investors, while marijuana stocks climbed after Tilray (NASDAQ:TLRY) announced a deal that could shake up the industry.
Another departure for Tesla
Shares of Tesla fell 1% after the electric-car maker said that it would make a change to its general counsel. Dane Butswinkas had been in the role for just two months, but he decided to return to the private law firm where he worked before, with Tesla replacing him with Jonathan Chang, VP of legal.
The move is just the latest in a series of executive departures that Tesla has faced. In January, CFO Deepak Ahuja said he would step down, raising concerns about whether Tesla might have unknown difficulties with its financial condition. That followed two separate resignations of chief accounting officers at Tesla in 2018, among others.
Many have speculated that Tesla's turnover problems center on CEO Elon Musk and the way that he leads the company. Given the multiple controversies that Musk has found himself embroiled in, it's clear that executives have to have a close rapport with the CEO in order to be entirely comfortable at the company. Moreover, it suggests that at least so far, newly appointed board Chair Robyn Denholm hasn't been able to eliminate the tensions that seem to develop between Musk and members of his executive team.
Tilray pushes pot higher
Shares of Tilray climbed 5%, leading most companies in the cannabis sector higher as well. The British Columbia-based cannabis player said that it would purchase natural foods company and hemp manufacturing specialist Manitoba Harvest from Compass Diversified Holdings (NYSE:CODI).
Under the terms of the deal, Tilray will pay up to 419 million Canadian dollars for Manitoba Harvest, with the final amount depending on whether the hemp specialist achieves certain milestones after Tilray completes the purchase. Tilray's initial payment of CA$277.5 million will be a combination of CA$150 million in cash and stock worth CA$127.5 million, and the company committed itself to paying another cash payment of CA$50 million along with Tilray stock worth CA$42.5 million six months after the deal closes.
Tilray CEO Brendan Kennedy was pleased with the move, noting how the acquisition of Manitoba Harvest "builds on the strategic partnerships we have formed with consumer brand industry leaders and demonstrates our track record of disrupting the global pharmaceutical, alcohol, [consumer packaged goods], and functional food and beverage categories."
Hemp could be the gateway for Canadian companies to enter the U.S. market after the recent legalization of hemp production under the latest U.S. farm bill. Given the move that Canopy Growth made to work toward building a hemp production facility in upstate New York, Tilray's purchase looks like a obvious response, and both companies can clearly see the importance of making whatever inroads are necessary to gain an early foothold in preparation for a broader legalization of cannabis across the U.S. market.