After a big finish to 2020 for cannabis investors, the ETF MANAGERS TR/TIERRA XP LATIN AME MJ 1.82% has rallied 86% so far in 2021, propelled in large part by bullish U.S. election results and optimism surrounding federal legalization.
In the past week, a short squeeze sent shares of Tilray Inc TLRY 9.83% nearly 150% higher before a sharp sell-off on Thursday.
The Numbers: Short sellers have been trimming their positions in cannabis stocks in 2021, with cannabis stock short interest down about $1.54 billion to $4.86 billion year-to-date. Tilray has been a major exception to that trend, with short interest up more than $1 billion since its announced merger with Aphria Inc APHA 0.36%, according to S3 Partners analyst Ihor Dusaniwsky.
The only good news for cannabis short sellers in 2021 has been that stock borrow fees have dropped from an average of 30.3% on Jan. 1 to just 4.2% today.