British Columbia-based Tilray, a medical marijuana business is the first of its nature to complete an IPO on a prime U.S. stock exchange, gathering about $153 million to expand its operations while Canada gets ready to implement a nationwide legalization of the drug.
The Canadian company’s shares started trading recently on Nasdaq stock exchange. The stock originally valued at about $17 quickly shot up closing at about $22.55 for the day – an increase of about one-third.
According to marijuana market analysts, though Tilray Inc. is not the first weed company to use a major U.S. stock exchange for trading, it is the first one with an Initial Public Offering to do so. The move seemingly has the potential to boost reliability and trust in the industry and is an indicator showcasing the professionalization and maturation of said industry, analysts further assert.
Earlier in 2018 other Canadian marijuana companies, Cronos Group and Canopy Growth, started trading on Nasdaq and New York Stock Exchange respectively.
The recreational use of marijuana has been legalized by 9 states in the U.S. as well as by the nation’s capital, Washington, DC. About two-thirds of the other states have legalized medical cannabis. Despite this, U.S. marijuana companies have not been able to get themselves enlisted in major exchanges due to the fact that the drug is still illegal under federal law.
Tilray does not conduct business in the U.S. but is licensed to grow marijuana for medical purposes in Portugal and Canada. In the documents submitted to the U.S. Securities and Exchange Commission, the company has stated that it has vended cannabis to tens of thousands of patients in ten nations across 5 continents via their subsidiaries located in Germany, Australia and Canada and through deals with well-known pharma distributors.
The company plans to expend the money towards the development of weed production and processing plants in Ontario, and repay its controller, the Seattle-based private equity firm Privateer Holdings.