Pot stock has sleepy hometown abuzz
Nanaimo-based Tilray’s dizzying climb comes amid investor frenzy ahead of legalization
An $11 billion market capitalization doesn’t get you much of an office.
The nondescript headquarters of Canadian pot producer Tilray Inc., whose market value briefly exceeded that of American Airlines Group Inc. last week, is a beige, two-storey building with blue trimmings in sleepy Nanaimo, a two-hour ferry ride from Vancouver. It sits in an industrial area behind a chain-link fence topped with barbed wire.
But Tilray’s wild ride on Wall Street — one of the most remarkable yet in the euphoria surrounding marijuana stocks — has this town of 90,000 on Vancouver Island buzzing.
“Marijuana’s the flavour of the year — everybody’s been clamouring to buy,” says Mike Tomkins, an independent financial adviser in Nanaimo, who’s had several clients that invested in Tilray in recent months. He advised them to cash out at least part of their holdings during the stock’s parabolic climb last week to as high as $300 a share.
Did they listen? “Never,” he said by phone. “In most of their opinions, this is just the tip of the iceberg — things are just getting started.”
Tilray, backed by billionaire investor Peter Thiel’s Founders Fund, is one of more than 100 cannabis producers licensed to supply Canada’s medical market and also exports to 10 countries. The company declined a request to tour its Nanaimo facility though it did provide photos of the 60,000-square-foot plant producing more than 50 cannabis strains that treat everything from drug-resistant epilepsy in children to lung disease. Chief Executive Officer Brendan Kennedy wasn’t available for an interview.
Its stomach-churning ride comes amid an investor frenzy ahead of Canada’s legalization of recreational pot next month projected to create a $4 billion domestic market alone. Tilray’s poised to capture early market share with a new batch of greenhouses in Ontario and the Canadian rights to distribute Marley Natural, a line of cannabis products developed with the estate of reggae icon Bob Marley.
Kim Smythe, president of the Greater Nanaimo Chamber of Commerce, is a believer in the company. He participated in Tilray’s July initial public offering priced at $17 and rues letting his broker talk him out of investing in the company much earlier when it was still private. “I could’ve gotten in on such a ground level,” said Smythe, who hasn’t sold any of his Tilray shares, which dropped 19 per cent to close at $99.50 US per share in New York Monday.
At a chamber event last Wednesday, Smythe says he was accosted by a woman he knows — a debt-relief counsellor, no less — who was buying Tilray stock as fast as she could. Tomkins recounts being in a parking lot recently when his ex-mother-inlaw approached him to ask about buying marijuana stock. “That’s when you know everyone’s talking about it,” Tomkins said.