7-19-18 1:29 PM EDT | Email Article

By Max A. Cherney

First cannabis IPO on Nasdaq scores $1.4 billion valuation, shares soar 30% in debut

Tiilray Inc. landed a valuation topping $1 billion and became the first cannabis company to go public on the Nasdaq exchange Thursday, then received even more validation when shares popped more than 30% in initial trades.

The hot IPO was just another first for a cannabis company that has made bold, global bets on an industry that for decades was run by drug cartels and Northern California growers and remains illegal under U.S. federal law. Tilray Chief Executive Brendan Kennedy said in a telephone interview Thursday morning that after hundreds of meetings in 15 cities around the world, it was clear to him that investors were fascinated by the prospect of a global cannabis industry because of the implications for health care and recreational use where legal.

Don't miss: Five things to know about the Tilray IPO (http://www.marketwatch.com/story/tilray-ipo-five-things-to-know-about-the-first-pot-company-to-go-public-on-nasdaq-2018-07-10)

"I think the [IPO interest] signifies a shift in perception." said Chief Executive Brendan Kennedy in a phone interview. "This is just the beginning, we take a very long term global view and we wanted to get this milestone as a validation for not only us but the entire sector."

Tilray priced its IPO at $17, higher than the $14 to $16 range it proposed in filing documents. Thursday's IPO raised $153 million from investors world-wide and valued the company at $1.43 billion. Kennedy said that the book was 70% U.S. investors, 18% Canadian investors and 12% international subscribers from London, Hong Kong, Sydney, Frankfurt and elsewhere.

According to the company's Securities and Exchange Commission filings, Tilray has made agreements with pharmaceutical distributors in 12 countries, has four clinical trials in three countries and is among the first companies to have licenses for cannabis cultivation in two countries: Canada and Portugal. Overall, it has approval to supply patients and researchers on five continents.

In the first quarter of this year, Tilray logged a net loss of $5.2 million on sales of $7.8 million, compared with losses of $679,000 and revenue of $5 million in the year-earlier period. In 2017, Tilray banked sales of $20.5 million at a net loss of $7.8 million.

As of 1:25 p.m. Eastern time, Tilray shares were still trading 29% higher than the IPO price, while the S&P 500 index was down about 0.3% on the day.

-Max A. Cherney; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

07-19-18 1329ET

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