Tilray is a smoking hot stock you can’t ignore

The taboo associated with marijuana eased considerably in recent times, after researches confirmed its medicinal and recreational benefits. The cannabis industry in the US is undergoing a paradigm shift, with several leading players going public.

Unlike their Canadian peers, pot companies in the US have certain constraints when it comes to the development and distribution of cannabis-based products. Tilray (TLRY), a pioneer in the research and processing of medical cannabis, is scheduled to report its first ever quarterly results on August 28 after the market closes.

Despite being part of an industry that is at a nascent stage, Tilray is on its way to near-term profitability. For now, Wall Street analysts predict a loss of $0.09 per share when the company presents its quarterly numbers next week. Experts believe that having entered the market relatively early, Tilray stands to benefit on multiple fronts when it comes to achieving breakeven.

Pot companies in the US have certain constraints when it comes to the development and distribution of cannabis-based products

The future of the pot industry will depend a lot on how soon local markets open up to cannabis in a full-fledged manner. Recent developments indicate that businesses are starting to realize the potential of legal marijuana. Alcohol giant Constellation Brands (STZ) this month hiked its stake in the local arm of Canada-based pot company Canopy Growth Corp. (CGC) from 9% to a whopping 38%, with a $4-billion investment.

The bullish tone in the initial coverage, with an ‘outperform’ tag, indicates analysts expects Tilray to march ahead unhindered and turn profitable by early next year. According to them, recent business partnerships give Tilray a competitive advantage in tapping the initial adult-use market share in the US.

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Tilray got a major boost earlier this week when it entered into a supply agreement with the Ontario Cannabis Store, along with other cannabis producers. Ontario Cannabis Store is the only online retailer of cannabis in Canada, where its recreational and medical use among adults is legal.

Canopy Growth, the biggest pot company in the world, recently reported a net loss for its most recent quarter, as expected, despite an increase in revenues.

Tilray is the first marijuana company to list on the Nasdaq Stock Market. Ever Since it started trading in July this year, the stock gained about 88%. The shares, which ended the last trading session down 2%, rose more than 4% in early trading Friday.

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