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market@ (Rewrites, adds Left comments)
NEW YORK, Nov 12 (Reuters) - Andrew Left, one of Wall Street's most prominent short-sellers, said Tilray Inc gave his firm its "worst day ever in the market" two months ago when its shares almost doubled in one session, but he remains bearish on the Canadian cannabis company.
Left, whose Citron Research has been betting against the stock since it traded in the $70s, was caught unprepared for the surge, which took the stock as high as $300 in intraday trading on Sept. 19, he told the Reuters Global Investment 2019 Outlook Summit in New York on Monday.
The stock ended that day up 38 percent, after the company's chief executive said pharmaceutical companies should consider partnering with cannabis companies as a "hedge" against its increasing medicinal use as a painkiller.
That came a day after the company received approval from the U.S. Food and Drug Administration to import marijuana to the United States for medical research.
"I was on a boat, in the middle of nowhere, and I couldnt do anything about it," Left said. Tilray shares traded near $114 in afternoon trading on Monday.
Investors buying the stock have been hoping the company will get a share of the potentially massive American market if marijuana is federally legalized.
Despite the volatile ride in Tilray's shares, Left remains convinced that the company's shares are overvalued because of inevitable competition from U.S. cannabis companies once marijuana becomes legal under federal U.S. law, he said.
"When U.S. LPs (companies) go public in the next few years it will make these Canadian companies laughable," he said. "The cannabis trade is a perfect trade because the cannabis trade is a non-branded, no-moat mega-trend."
Recreational marijuana is currently legal in 10 states and many see federal U.S. legalization as inevitable within the next five years.
Shares of Tilray jumped nearly 31 percent on Friday after U.S. Attorney General Jeff Sessions resigned.. Sessions, an opponent of marijuana's legalization, had given prosecutors a green light to aggressively enforce federal laws against the drug in states where it has been decriminalized.
Should marijuana become federally legal, U.S. producers and brands will be the most likely to thrive in the domestic market, Left said. California, where recreational marijuana became legal under state law in January, will constitute a cannabis market at least five times as large as Canada itself, Left said.
"There will be winners. I understand why people are excited about it," he said, noting that Canopy Growth Corp became "the global leader financially" in the industry after Corona beer maker Constellation Brands Inc invested more than $4 billion in the company. Left said he has no position in Canopy.
Left said that Tilray's stock is also benefiting from the relatively small number of shares available until its lockup expiration ends on Jan. 15, 2019, which is 180 days after the company went public in July.
"What happens the day the lockup expires and the float doubles? What happens to the stock then?" Left asked.
Follow Reuters Summits on Twitter zReuterstSummits
(Reporting By David Randall Editing by Bill Rigby)