What happened
Canadian marijuana grower Tilray's (TLRY +0.00%) stock has soared in 2021. Even prior to today's surge, shares are more than 530% higher just since Jan. 1. Shares jumped again on Wednesday, rising 38% as of 10:20 a.m. EST.
So what
Investors are jumping back in on optimism that the underlying business finally has a visible pathway to prosperity. Shares initially soared back in October 2018 after Canada legalized recreational marijuana. Even with the recent outsized gains, shares are still 60% lower than those exuberant highs.
Yesterday, the company reported a new distribution agreement in the U.K. to go along with other European expansions recently announced. But today's outsized move might also have to do with another Reddit trading frenzy.
Image source: Getty Images.
Now what
Yesterday, Tilray announced a new distribution agreement with U.K. medical cannabis distributor Grow Pharma. Under the agreement, Tilray's pharmaceutical-grade medical cannabis products will be imported and distributed by Grow Pharma in the U.K. The company expects to have internationally certified product available for patients next month. The agreement "allows Tilray to provide authorized UK patients in need with a locally maintained supply of medical cannabis solutions," the company said in a statement.
The announcement follows several others in the last two weeks that Tilray has been approved to supply certified medical cannabis in France and Portugal, and that it has started shipping medical cannabis to Spain.
There may be retail traders on Reddit helping to move shares today. But Tilray will soon be merging with fellow Canadian grower Aphria (APHA +0.00%) to create one of the largest cannabis companies in the world. Investors are jumping in with the hope that legalization in the U.S. will also create a runway for future growth.
