Tilray (NASDAQ:TLRY), Canopy Growth (NASDAQ:CGC) and other cannabis stocks have been in the news lately. That’s mostly as Congress continues its push toward decriminalizing cannabis in the U.S. For Tilray specifically, the stock will be in even more focus this week as its set to report its third-quarter earnings tomorrow morning, April 6.
Last quarter, Tilray reported break-even results, beating earnings estimates by 9 cents a share. Despite missing on revenue estimates, the company grew sales almost 20% year over year. For the current quarter, analysts expect the company to report $247.3 million in revenue.
The industry hopes to gain more momentum following last Friday’s news of the House passing the MORE Act. While this is the second time the bill has passed through the House, it will be sent to the Senate in hopes of taking cannabis off of the federally controlled substance list and will leave legalization up to each state. The bill first passed through Congress in December 2020.
We continue to see a growing trend in the cannabis market. Last year, the U.S. generated $25 billion in cannabis sales and it’s forecast to hit $65 billion by 2030. Recreational cannabis use for adults is legal in 19 states and medical use is allowed in 36 states. With that in mind, Tilray won’t look to grow its market share by itself.
In December 2020, Tilray and Aphria made headlines when the two companies agreed to a merger. That deal was closed in May 2021, making it one of the larger cannabis companies in the industry. At the time of the merger, the companies controlled more than 17% of the retail cannabis market, which is “the largest share held by any Canadian licensed producer.”
It hasn’t been a good run for TLRY stock over the past year, with shares down nearly 69%. However, the stock is level over 2022. As it pertains to the chart, it actually has a somewhat decent setup, although Tuesday’s dip isn’t helping matters.
In the post-earnings action, bulls will want to see a push higher. If that’s the case, see how TLRY stock handles the $8.50 area. Above that zone will put the last week’s high in play at $9.08. That’s followed by the $10 level and the 200-day moving average.
If we have a bearish earnings reaction, investors will want to see Tilray stock hold the 21-day and 50-day moving averages. Below that and the $5 to $5.15 area is on the table.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.