Tilray, Inc (NASDAQ: TLRY)
Tilray, a company that sells adult and medical use marijuana products to distributors and consumers in Canada and other countries, has laid out the terms of its US public offering.
The company, which is growing rapidly, plans to offer 9 million shares of Class 2 common stock at an initial price of between $14 to $16 each.
Tilray plans to trade under the ticker symbol “TLRY” on the Nasdaq Global Select Market. It is expected to list during the week of July 16, 2018.
Underwriters have also been granted 30-day overallotment option to buy up to 1.35 million additional shares. The company would command a market value of $1.4 billion at the midpoint of the proposed price range.
It will become the third Canadian cannabis producer to list its shares in the United States, after Cronos Group, Inc. and Canopy Growth Corporation.
The company made its filed for an IPO with the United States Securities and Exchange Commission last month, after Canadian lawmakers decriminalized recreational marijuana sales.
It has also filed a prospectus for a proposed public offering in all Canadian provinces (except Quebec), in order to ensure that purchasers in Canada are not subject to restrictions on resale, and to qualify the offering of securities in the country. However, the company does not plan to list on any Canadian stock market.
Cowen and BMO Capital Markets are acting as the lead book-running managers for the initial public offering in the US and Canada, respectively.
Northland Capital Markets is acting as co-manager for the offering in the US, while Roth Capital Partners is acting as lead manager. In Canada, Eight Capital is acting as lead manager for the deal.
Tilray was founded by a team of horticulturists and botanists, with an aim of cultivating marijuana for medical purposes. It is under the leadership of chief executive officer Brendan Kennedy.
He has been with the company since it was founded five years ago. Kennedy is also the chief executive of Privateer Holdings.
The headquarters of the company are located in Vancouver Island in British Columbia. Tilray also has extra offices in Seattle, Sydney, Berlin and Toronto. Additionally, it has licensed cultivation facilities in Ontario, Portugal, and British Columbia.
The company develops marijuana packs, capsules, and oils to cater for the different needs of its customers. Further, it offers a collection of accessories to explore and enhance marijuana use – from cooking books to vaporizers, grinders, pipes, bubblers, or even trays.
The company expects to be able to offer more products from October 17, 2018, once recreational cannabis sales come into effect.
Marketing and sales costs have swelled slightly within the last two years. The costs hit 29% and 34.9% in the first quarters of fiscal 2018 and 2017, respectively.
Grand View Research, Inc reports that medical cannabis market is expected to hit $55.8 billion by 2025, as more regions continue to legalize cannabis. Tilray expects to benefit from the growing market, but it will still have to deal with some competition.
Rivalry is expected to come from major cannabis vendors, such as CannaGrow Holdings, GW Pharmaceuticals, United Cannabis, GrowBlox Sciences, and Cara Therapeutics.