Citron sees Tilray getting 'support' after Constellation bets big in cannabis

In a report published today, Citron Research called Tilray (TLRY) "best in class" and said it should be "next to get support" after Constellation Brands (STX; STX.B) announced that it will increase its ownership interest in Canopy Growth (CGC). Further, Citron argued that Tilray's stock could be "trading at $45 a share" given the multiple assigned to its Canadian peer. 'NEXT TO GET SUPPORT': Andrew Left's Citron Research said in a report published today that it sees Tilray as "next in line" in a building cannabis industry. "Citron believes that Tilray is best in class and if it were to get the same multiple we are assigning to Canopy, the stock would be trading at $45 a share," the report read. Overall, Citron believes Tilray will be the next "pot stock" to go "much high[er]" given its best in class investors, strategic partnerships with big pharma such as Novartis (NVS), its four clinical trials and licenses for cultivation in Portugal and Canada, availability of product in 10 countries, growing space, and its partnership with Noweda, which is the largest pharmacy in Germany. Additionally, the report noted that Tilray was the first cannabis company to launch an IPO with a real U.S. bank and on the Nasdaq. "Forget about Bitcoin mania, today solidified that Weed is not only real, but also investible despite stretched valuations," Citron contended. CONSTELLATION INVESTMENT IN CANOPY: This follows Constellation Brands' announcement this morning that it will increase its ownership interest in Canada's Canopy Growth to 38% by acquiring 104.5M shares, with the option of raising its stake further to 50%. As a result, Canopy Growth will "immediately upon closing have proceeds of approximately C$5B to bolster its leadership position in the global cannabis industry," the companies stated. The beer and wine maker said it remains committed to its investment grade rating and therefore has no plans to engage in mergers, acquisitions or share repurchase activity for about 18-24 months post the deal closing. PRICE ACTION: In afternoon trading, shares of Tilray have jumped over 20% to $29.26, while Canopy stock trading in New York has gained more than 27% to $31.33.