Canadian marijuana company Tilray has first US pot IPO

A Canadian company is the first marijuana business to complete an initial public offering on a major U.S. stock exchange, raising $153 million to expand its operations as Canada prepares to legalize the drug nationwide. British Columbia-based Tilray Inc.’s shares began trading Thursday on the Nasdaq stock exchange. Initially priced at $17, the stock quickly jumped to more than $21 a share.

Tilray isn’t the first pot company to trade on a major American stock exchange, but it is the first to do so with an IPO, a step that could boost credibility and confidence in the industry, said John Kagia, an analyst with the marijuana market research firm New Frontier Data. “It’s another high-profile marker of how the cannabis industry is maturing and professionalizing,” he said. Two other Canadian marijuana companies began trading on major U.S. exchanges earlier this year — Cronos Group on Nasdaq and Canopy Growth on the New York Stock Exchange.

Those companies already were publicly traded in Canada. Nine U.S states and Washington, D.C., have legalized the recreational use of marijuana and about twothirds have legal medical marijuana. But American cannabis companies have been unable to list on major U.S. exchanges because of the drug’s illegal status under federal law. Instead, some have gone public in Canada by being acquired by companies there.

Medical marijuana is legal in Canada, and on Oct. 17, the country will become the first major industrialized nation to legalize its production and sale for recreational use. Uruguay is the only other country to do so. Tilray doesn’t do business in the U.S., but has been licensed to produce cannabis for medical use in Canada and Portugal.

In documents filed with the U.S. Securities and Exchange Commission, it said it has sold marijuana to “tens of thousands of patients in 10 countries spanning five continents through our subsidiaries in Australia, Canada and Germany and through agreements with established pharmaceutical distributors.”

Chris Barry, a partner at the Dorsey and Whitney law firm in Seattle, handles marijuana investment deals and mergers in the U.S. and Canada. He noted that major institutional investors, including the century-old New York investment bank Cowen, were involved in Tilray’s IPO.