Why Tilray Stock Crushed the Market on Wednesday

© Provided by The Motley Fool Why Tilray Stock Crushed the Market on Wednesday

What happened

In what's hardly a common occurrence, marijuana stock Tilray (NASDAQ: TLRY) had quite the up session on the market Wednesday. On two pieces of good news for the broader North American pot sector, the Canadian weed company's share price rose by 4%. That was more than good enough to beat the S&P 500 index, which inched up a mere 0.3%.

So what

Arguably the more impactful of the pair was a confirmed item -- Twitter's change in policy regarding marijuana advertising. The micro-messaging platform company announced that licensed cannabis companies are now permitted to target American and Candadian Twitter users.

There are some fairly strict limits to this. Advertisers broadcasting to U.S. users "may not promote or offer the sale of cannabis (including CBD -- cannabinoids)," as Twitter detailed on its website; in Canada the restriction is that they "may only promote informational or brand-preference content."

Additionally, all cannabis advertisers going after Americans must be pre-authorized by Twitter, and they cannot target users under the age of 21. 

Meanwhile, weed industry news and analysis website Marijuana Moment reported on Tuesday that Senate majority leader Chuck Schumer held a discussion with Republican senators about crafting a passable decriminalization bill.

According to the article's sources, among those senators were Rand Paul of Kentucky and Steve Daines of Montana. This followed a similar meeting with Democrat senators earlier this month. The specifics of the discussion weren't provided.

Now what

Neither development will be a monster game-changer for Tilray, nor any of its fellow Canadian or American weed companies. But both are part of a broader, long-tail trend of the drug winning acceptance throughout North American society. These are small steps on the road to decriminalization, and ultimately the liberalization of the pot market on this continent. Investors were justified in feeling bullish about them.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.