Canadian medical marijuana producer Tilray on Monday said it had launched an initial public offering after its application to list on the Nasdaq. That would make it the latest pure-play pot company to join marijuana stocks Cronos Group (CRON) and Canopy Growth Corp. (CGC) on a major U.S. exchange.
XTilray said it would offer 9 million shares with an expected price range at $14 to $16 a share. The company supplies marijuana in Canada and parts of Latin America, Europe, Africa, Australia and New Zealand, according to regulatory disclosures.
Tilray filed for the IPO last month. The company, founded in 2013, says it plans to list on the Nasdaq under the ticker "TLRY."
Tilray is a subsidiary of Privateer Holdings, a cannabis-focused investment firm founded in 2010 in Seattle. Privateer Holdings acquired the cannabis review and information website Leafly in 2011.
As the legal market in nations like Canada transforms backwoods growing operations into full-blown weed corporations, North America's marijuana industry has carved out ways to expand its shareholder audience in both Canada and America — while avoiding U.S. legal barriers. Companies in Canada have tried to raise money and consolidate ahead of recreational legalization, which takes hold in October.
Cronos Group, another pot producer in Canada, in February became the first marijuana stock to list on the Nasdaq. Canopy Growth, also a Canadian marijuana company, debuted on the New York Stock Exchange in May. MedMen, a marijuana cultivator and retailer in the U.S., went public in Canada in May. High Times is planning an IPO for later this year.
Among marijuana stocks and related plays, Cronos Group closed down 0.1%, while Canopy lost 1.5%. the stock market today. Corona parent Constellation Brands (STZ), which has invested in Canopy Growth and is weighing legal ways to gain exposure to the U.S. marijuana business, picked up 1.6%. Tobacco giant Imperial Brands (IMBBY), which said it was investing in a marijuana company, added 0.6%.
Cowen, BMO Lend Support
The company has also filed a preliminary prospectus for a proposed IPO in Canada in every province except Quebec, it said in a statement. The company did so, it said, "to qualify the offering of securities in Canada and to ensure that purchasers in Canada are not subject to restrictions on resale." The company said it doesn't intend to list on any Canadian exchange.
BMO Capital Markets and Cowen are acting as book-runners for Tilray's proposed IPO, Tilray said. Cowen is managing those duties in the U.S., and BMO is handling them in Canada.
Roth Capital Partners is acting lead manager of the IPO in the U.S., Tilray said. Northland Capital Markets is co-manager. Eight Capital is acting as lead manager for the IPO in Canada. Tilray said the offering would be made via a prospectus.
Marijuana Stocks Go Global
Tilray said it stood out from rivals due to its global distribution network and deep research capacity. Canopy Growth has also set its sights on the global marijuana market, saying Germany would be the market to watch in Europe over the next year. Medical marijuana became legal in Germany in 2017.
Tilray reported a net loss of $7.8 million last year, with revenue of $20.5 million, a 62% jump, according to a registration statement filed with the SEC. The company also warned about roadblocks ahead in the recreational market.
"Legalization of adult-use cannabis in Canada may have a significant negative effect on our medical cannabis business and there is no guarantee that we will be able to participate or effectively compete in the adult-use cannabis market in Canada," Tilray said in the SEC filing.
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