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July 19, 2018 saw rapidly growing Canadian marijuana cultivator and processor Tilray Inc. (Nasdaq symbol TLRY) make its debut for trading on the Nasdaq Global Select Market. The IPO raised $153 million for Tilray and is extremely significant for the burgeoning cannabis industry because it marks the first “touching the plant” initial public offering in the U.S.

Previously, “touching the plant” companies in either the U.S. or Canada that wished to go public were listing up north on The Toronto Stock Exchange or its extremely popular TSX Venture Exchange^[1]. U.S. securities exchange listing requirements continue to prohibit the listing of a U.S. based medical marijuana company or state-legal adult use marijuana company, because the U.S. exchanges require the businesses that list for trading on such exchanges to be conducting themselves in full compliance with the laws of their home country^[2].

Tilray utilized well-known U.S. investment bank Cowen and Company as one of its lead underwriters, along with Roth Capital Partners and Northland Securities. The shares priced at $17 a share, above the $14-16 filing range, reflecting strong demand from investors in U.S. capital markets. Remarkably, Tilray finished its second trading day at nearly $30, reflecting a robust gain of 75% from the IPO price and giving Tilray a market cap of $2.75 billion for the heretofore money losing business.

Suffice it to say, with the positive reception that Tilray received from U.S. investors on Nasdaq, this will not be last cannabis-related IPO that occurs in American securities markets. The fact that it occurred at all and was such a resounding success marks a major milestone for the ongoing mainstreaming of the cannabis industry, and further erodes the remaining market bias stemming from the thicket of legal and regulatory risks that have kept some major U.S. financial institutions and players on the sidelines.

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^[1] Canopy Growth and Cronos Group, two larger Canadian marijuana businesses preceded Tilray in trading on U.S. markets but they were simply additional listings of securities already trading on Canadian exchanges and did not involve an IPO.

^[2] Canada nationally is scheduled to rollout full adult use on October 17, 2018.

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For more information on the topic discussed, contact:

• James Rieger  |  rieger@thsh.com  |  212-508-6728