Please ensure Javascript is enabled for purposes of website accessibility

Why Tilray and OrganiGram Holdings Got Slammed on Friday

By Eric Volkman - Updated May 29, 2020 at 10:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

They can blame a high-profile peer in their sector.

What happened

A pair of marijuana stocks, Tilray (TLRY) and OrganiGram Holdings (OGI 1.53%), both dropped notably in price on Friday (by 5.2% and 7%, respectively).

The culprit seems to be another weed title, Canopy Growth (CGC -3.56%), which earlier in the day published an awful quarterly earnings release.

Marijuana bud burning.

Image source: Getty Images.

So what

Canopy Growth is a leading company in the sector. Since basically every cannabis business in North America remains very dependent on this continent's market, they have all struggled with the numerous challenges of operating in their industry. Therefore, wherever a big marijuana company goes, the others broadly follow.

This affected Tilray and Organigram, even though neither had proprietary bad news to report on Friday. If either company were somehow exceptional or had shown a ray of promise recently, they might not have been blasted by the Canopy Growth wave.

They're not exceptional, however. OrganiGram's latest quarterly results showed worrying revenue erosion, in addition to a host of other concerns. Tilray is managing to grow revenue, but its losses are considerable. Plus, there's little indication that a recent big acquisition -- Manitoba Harvest -- will be much of a game changer.

Now what

Canopy Growth is trimming expectations, saying that it's enacting a strategic reset to more narrowly focus its business. That should drive investors away from the stock, and if they can't get interested in Canopy Growth, they won't be eager to buy shares of Tilray or OrganiGram, either.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

OrganiGram Holdings Stock Quote
OrganiGram Holdings
OGI
$0.95 (1.53%) $0.01
Tilray Stock Quote
Tilray
TLRY
Canopy Growth Stock Quote
Canopy Growth
CGC
$2.71 (-3.56%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.