TLRY - Cannabis ETFs get burnt as Tilray dives 20%

2023-05-26 10:31:47 ET

Exchange traded funds related to the cannabis sector dropped in Friday's early trading, dragged down by shares of industry stalwart Tillery Brands ( TLRY ).

TLRY declined 20% after the cannabis company announced a $150M offering of convertible senior notes. Hurt by this setback, many marijuana-focused ETFs have also taken a hit.

Currently TLRY, which has fallen more than 30% in 2023, and is held by 25 different exchange traded funds. Here are some of the exchange traded funds that have the heaviest weightings towards TLRY and how they fared in 2023:

• Global X Cannabis ETF ( NASDAQ: POTX ): 15.58% allocation, -28.9% YTD.
• Amplify Seymour Cannabis ETF ( NYSEARCA: CNBS ): 10.26% allocation, -24.5% YTD.
• ETFMG Alternative Harvest ETF ( NYSEARCA: MJ ): 8.08% allocation, -25.7% YTD.
• AdvisorShares Pure Cannabis ETF ( NYSEARCA: YOLO ): 4.84% allocation, -23.2% YTD.
• AXS Cannabis ETF ( THCX ): 4.79% allocation, -27.8% YTD.
• Cambria Cannabis ETF ( TOKE ): 3.61% allocation, -13.8% YTD.

Looking at the sector as a whole, Seeking Alpha analyst William Morton argued that while demand for cannabis will more than likely increase in the future, that doesn’t necessarily translate to smooth sailing for the cannabis industry.

"In fact, I think this marijuana ship is actually quite far from smooth sailing and much closer to submerging," Morton stated . "From their limited access to traditional banking services to the stigma surrounding marijuana legalization and everyday use, the cannabis industry faces many barriers to profitability."

More on the Cannabis Industry:

• Tilray Is Likely To Fall More
• House committee rejects marijuana legalization amendment
• Unpaid cannabis taxes pile up at Canadian marijuana companies
• Curaleaf: Ignored Cannabis Catalysts

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