Tilray shares on wild ride after U.S. export approval
Shares in marijuana company Tilray Inc. went on a wild ride — surging by more than 90 per cent then briefly dropping into negative territory and rebounding — one day after the Nanaimo-based licensed producer said it got approval to export medical cannabis from Canada to the U.S. for a clinical trial.
The stock closed at more than $214, up 38 per cent, after being halted five times within one hour.
The drastic swings in the stock follow a nearly 30 per cent jump on Tuesday after the firm announced it got the green light from the U.S. Drug Enforcement Administration to export cannabis in capsule form to a researcher at a university in the U.S., where the drug is still illegal at the federal level.
Tilray will be exporting to the University of California San Diego capsules with two active ingredients — cannabidiol and tetrahydrocannabinol, better known as CBD and THC — extracted from the cannabis plant for a clinical trial as a potential treatment for essential tremor, a neurological disorder that causes uncontrollable shaking. The one-year trial is scheduled to begin in 2019.
On top of being positive for the sector, the clinical trial supports Tilray’s medical cannabis prospects as it competes with Smiths Falls, Ont.-based Canopy Growth in an intellectual property-arms race, said Cowen analyst Vivien Azer in a recent note.
“[The] news is a positive for both Tilray and the broader cannabis stock universe, as additional medical applications and improved government support add another domino to future legalization in the U.S.,” she said.
Tilray completed its initial public offering in July with its shares priced at $17 US per share. Its market capitalization was $19.9 billion US at close.
Canopy Growth had a market capitalization on Wednesday of $11.28 billion US on the Nasdaq at close.