Shares of cannabis stocks are in focus after Canadian marijuana producer Tilray (TLRY) announced approval by the U.S. Drug Enforcement Administration to import a cannabinoid study drug into the U.S. from Canada.

DEA APPROVAL: On Tuesday, Tilray announced that the U.S. DEA has granted approval to import a cannabinoid study drug into the U.S. for a clinical trial at the University of California San Diego Center for Medicinal Cannabis Research examining its safety, tolerability, and efficacy for Essential Tremor. Tilray is providing a cannabinoid formulation for the trial in capsule form, which will allow researchers to test an investigational drug product containing two active ingredients extracted from the cannabis plant, cannabidiol, and tetrahydrocannabinol. The study is expected to begin in early 2019 with financial support from Tilray and the International Essential Tremor Foundation. Essential Tremor is a neurological movement disorder characterized by involuntary and rhythmic shaking.

'PROMOTIONAL AND MISLEADING': Following the announcement, short-seller Citron Research tweeted, "$tlry has now crossed to promotional and misleading They announce that they are supplying cannabis to an already arranged study that does not involve them. No collaboration Low float a promo is a dirty combo for." The tweet comes after Citron announced a short position in Tilray on September 4 via Twitter, saying, "Citron LOVED $TLRY at $26 but now we are SHORTING stock. Cowen lowered est and still raised tgt $62 only shows "RETAIL INVESTORS GONE MAD" and forgot $TLRY went public at $17 - 6 weeks ago. We would expect an equity raise at these levels. By far most expensive in space." Citron also issued a report on September 12, which said, "Since August 15, US marijuana stocks Tilray and Cronos (CRON) have significantly outpaced the performance of their Canadian traded peers. Due to federal regulation, US-listed stocks cannot have any operations in the US without losing their listings, whereas Canadian listed stocks can have US operations. The US will be the largest cannabis market in the world. Today, the California market is over 5x larger than all of Canada. Despite obvious logic, we've seen US retail investors pile into the US listed marijuana stocks...Lastly, over the past week, Citron has received hundreds of emails from investors ranging from anti-Semitic to threats on family, but NOT one of them could justify the price increases with any analysis whatsoever. We have been publishing for 17 years and this is generally a sign of a retail bubble". 

WHAT'S NOTABLE: On Monday, Bloomberg reported that Coca-Cola (KO) is monitoring the nascent cannabis drinks industry and is in talks with Canadian marijuana producer Aurora Cannabis (ACBFF) to develop the drinks. Aurora Cannabis announced Tuesday it responded to a request from the Investment Industry Regulatory Organization of Canada regarding reports on potential partnerships with beverage companies. "The company's policy is not to comment on speculative media reports. The company does confirm that it engages in exploratory discussions with industry participants from time to time. At this time the company confirms there is no agreement, understanding or arrangement with respect to any partnership with a beverage company", the company said.

CANNABIS STOCKS: Publicly-traded companies in the space include Cronos Group, Canopy Growth (CGC), Tilray, Cannabis Science (CBIS), Innovative Industrial Properties (IIPR) and Aurora Cannabis.

PRICE ACTION: Tilray surged roughly 20% to $144.55 in morning trading.