Canadian cannabis producer and processor Tilray made history last week as the first cannabis company to hold an initial public offering on the U.S.-based Nasdaq stock exchange, according to a report from Fox Q13. Other Canadian cannabis companies have traded on U.S.-based stock exchanges — Tilray, however, is the first to do so with an IPO.
Despite being legal in nine states and the District of Columbia, no U.S.-based cannabis companies have been publicly traded because of federal drug and money-laundering laws.
Tilray stock opened at $17 per share on the Nasdaq and closed after the first day of trading at $22.55. As of Monday afternoon, the stock is trading over $32 per share, almost double the opening price. Some have concerns that cannabis company stocks have been overvalued on the Canadian market as well as the U.S. due to the excitement around an entirely new market opening up.
“Right now a lot of investment has been highly speculative. Those valuations feel a little supercharged. We expect some kind of correction in the near future.” — John Kagia, market analyst for New Frontier Data, via Q13 Fox
Tilray plans to use the money raised by the IPO to expand growing and processing operations and eliminate debt with Privateer Holdings, the Seattle-based firm that controls Tilray currently. Canada‘s adult-use cannabis market is expected to be between $5-9 billion at launch.
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