Weed Goes to Wall Street

Weed Goes to Wall Street

A British Columbia-based cannabis company with Seattle connections hits the stock market.

Tilray Inc., a 5-year-old Canada-based medicinal-cannabis producer, processor, and distributor, debuted on the U.S. stock market (NASDAQ: TLRY) last Thursday, July 19 as part of Nasdaq’s exclusive high-end initial listing tier, the Global Select Market Exchange. Several current companies on the stock exchange are vaguely related to cannabis production, but only two others touch any plant matter: Cronos Group and Canopy Growth. Tilray is also the first cannabis-related company to have raised capital through an initial public offering (IPO) on the U.S. exchange. “Coincidentally,” the company filed for its IPO at the end of June, a day after Canada announced it would legalize recreational cannabis this October 17.

When everything was said and done at the end of the first day of trading, Tilray sold all of its six million shares, with many more requests going unfulfilled. The stock’s closing value topped out at over 30 percent more than its starting price, rising from $17 a share to more than $22, ultimately raising over $153 million. Tilray stated it would use this capital to establish a new facility in Ontario.

Tilray’s willingness to challenge the legal boundaries of money-making in the world of American cannabis could clear the way for many other cannabis startups to enter the open market. You might be wondering how this is even possible when cannabis is still listed as an extremely illegal Schedule 1 drug by the federal government and banks are still restricted in most states from taking money from weed business accounts. Well, as long as cannabis is legal in a company’s home country—as is the case with the Nanaimo, B.C., organization—it may trade shares on the U.S. stock exchange.

But, wait—plot twist—Tilray is actually owned (82 percent) by Seattle-based weed company Privateer Holdings. Privateer is not the only American company doing the old switcheroo to make a greenback off the green. For example, New York-based Constellation Brands, the liquor giant behind beverages Corona and Black Velvet Whiskey, owns part of Canadian company Canopy Growth.

Privateer Holdings are not unfamiliar with mega-success. Other Privateer ventures included Marley Naturals, a marijuana partnership with the Bob Marley estate (currently Marley is ranked fifth on Forbes’ list of dead money-making celebrities); Goodship Edibles (formally started and owned by Cupcake Royale empress Jody Hall); and last but least, Leafly, the world’s busiest cannabis website, with more than 10 million visits a month.

Even though Tilray did not list as being profitable last year (in fact, it reported a loss of almost $8 million), the company is still currently valued at nearly $2 billion. It’s one of the world’s largest medicinal-cannabis producers and distributors ,with offices in Berlin, Toronto, and Sydney and cultivation facilities in Canada and Portugal. It provides products in 10 countries on five continents. Tilray has funded four clinical trials in three countries, and has deals with pharmaceutical distributors in 12 others. Now, with access to one of the most coveted stock markets in the world, Tilray and Privateer Holdings are poised to go all in for the green-tinted gold.


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