Shares of Tilray (TLRY -9.47%) fell 9.5% on Tuesday after leaders in Germany postponed the final vote on a bill to legalize marijuana until next year. The vote was originally scheduled for this week.
Germany postpones its vote on the legalization of cannabis
As a leader in the research, cultivation and distribution of cannabis – and noting that its European headquarters are in Germany – Tilray obviously has a lot to gain with any country that legalizes the drug. Tilray Chairman and CEO Irwin Simon even recently traveled to Germany to visit the parliament there and discuss cannabis ahead of the vote.
However, the vote was canceled yesterday after leaders of the country’s Social Democratic Party (SPD) expressed concerns about the legalization proposal.
“In the end, there always has to be the approval of the parliamentary groups,” wrote SPD MP Dirk Heidenblut, who is responsible for the party’s cannabis policy, in a social media post. “And if a faction leader, in this case the SPD, has concerns, then it cannot be set up yet.”
What’s next for Tilray investors?
Nevertheless, Simon remained confident that Germany remains on the right path to eventually legalizing marijuana.
“Tilray is well positioned for the German market, which is the largest market in the European market,” Simon told Bloomberg after the delayed vote became public. “So we’re very excited about it and in my opinion it’s not a question of if it will happen, it’s a question of when it will happen.”
In fact, Heidenblut noted that as long as the bill is passed in the German parliament by the end of January 2024, it is unlikely to have a significant impact on the country’s planned timeline for implementing legalization. The first phases of this process could begin as early as April 2024.
Perhaps that suits Tilray, considering that today’s decline simply wiped out a roughly equivalent gain from yesterday. Longer term, however, I think it remains arguably the best-positioned marijuana stock the market has to offer.