It should have been a much better day for cannabis company Tilray (TSE:TLRY), as a new potential market has just opened up thanks to some law changes in Ohio. But despite this new potential avenue for growth, Tilray still plummeted a whopping 5% in Tuesday morning’s trading. The new word out of the Ohio Division of Cannabis Control announced the first sales licenses in the state, giving 98 dispensaries the ability to open throughout the state.
This is expected to mean big things for cannabis in Ohio, as the state expects to see between $1.5 billion and $2 billion in sales in the first year alone. By the fourth year, that number will balloon to between $3.5 billion and $4 billion.
However, what may be the problem for Tilray on this one is that there are a range of other cannabis companies with an active presence in Ohio. In fact, reports suggest that there are at least six different companies going for the Ohio market, and with only 98 total licenses, that means that pie is going to get split a lot of different ways. That, in turn, will make revenue growth as a result of the Ohio market comparatively lean.
But Then There’s Drinks
Tilray likely knows that there are a lot of people currently selling weed right now, and as such, it’s working to diversify its portfolio. One major source of diversification for it right now is drinks, and the beverage market is proving kind to the cannabis stock.
In fact, thanks in large part to that growing drinks lineup, estimates suggest that Tilray could clear $1 billion in revenue this year. And it has been adding to its various beverages—craft beers, cannabis-related drinks, and nonalcoholic drinks alike—to help drive growth. Tilray is, in fact, now the fifth-largest craft brewery operation in the United States, and that’s going to give it a lot of help no matter which way the cannabis market might go.
Is TLRY Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:TLRY stock based on one Buy and two Holds assigned in the past three months, as indicated by the graphic below. After a 39.41% loss in its share price over the past year, the average TSE:TLRY price target of C$3.21 per share implies 30.96% upside potential.
