Cannabis

Tilray Inc’s (TLRY US) stock price is down almost 3% after reporting 4^th quarter results which beat analysts’ revenue estimates. 4^th quarter EBITDA losses and EPS loss which were more than twice as large as expectations turned an aftermarket rally into a losing day today.

Aurora Cannabis (ACB US – ACB CN) stock price jumped by 10% as they announced that Trian Fund’s Nelson Peltz is joining the firm as a strategic advisor. Peltz received 20 million options which will vest is transactional and price performance metrics are met.

Tilray Inc (TLRY US) short sellers are in a bind with stock loan inventory virtually all taken down and ongoing short selling demand forcing stock loan rates up markedly.

Tilray short interest is $265 million; 3.78 million shares shorted; 19.56% of float; 24.40% stock borrow fees on existing shorts and 45% to 110% fees on the new miniscule short sales that are being approved.

We are seeing stock loan recalls hitting the street in Cronos Group Inc (CRON US\CRON CN) stock today as well as increased short selling this morning. This means that stock loan supply is dwindling and stock borrow demand is increasing – translation, higher stock borrow rates in the near future and minimal short side activity in the stock.

Canopy Growth, CGC US\Weed CN, is up over 4.5% on news that Martha Stewart is joining forces with the cannabis producer to advise on marijuana related products for humans and pets.

CGC US\Weed CN short interest is $1.33 billion; shares shorted of 28.97 million shares; 12.49% of its float. Stock borrow costs are 10% fee.

The Cannabis Sector has been on a wild ride in 2019 with the ETFMG Alternative Harvest ETF (MJ US) up 47.5% for the year and the Horizons Marijuana Life Sciences ETF (HMMJ CN/HMLSF US) up 51.5% on the year. With cannabis stocks on such an upswing, short sellers have not fared well in the sector and are down $1.78 billion in mark-to-market losses for the year on outstanding short exposure of $3.86 billion.

Canopy Growth Corp (CGC US) short interest is $1.29 billion; 26.39 million shares shorted; 11.38% of float; stock borrow is 13.65% bp fee. WEED CN short interest is $355 million; 7.28 million shares shorted; 3.14% of float; stock borrow is 12.40% bp fee  Canopy Growth is the  is the most shorted stock in the Cannabis sector.

The 10 major shorts in the Cannabis sector, which make up over 95% of all shorts in the sector, were down $28 million in mark-to-market losses today, bringing year-to-date losses to $1.02 billion.

Short sellers have been covering some of their Tilray short positions over the last week. With shares shorted down 292k shares, -7.72%, as Tilray’s stock price declined by 14.24% over that same time period. Shares shorted are 3.49 million shares, $287 million of Short Interest. This is the lowest level of shares shorted since early December.

TLRY US\CN short interest is $286 million; 3.43 million shares shorted; 33.24% of the float with a stock borrow rate on existing short positions at 182% fee (per annum).

There is very little stock loan available in this name and there is not enough stock available for any large short sales.