Like a weed
Pot purveyor market cap up tenfold
It was an amazing high, but the comedown was brutal.
Shares of Peter Thielbacked marijuana grower Tilray soared as much as 94 percent on Wednesday — briefly giving the small, 5-year old Canadian company a market cap greater than CBS, Twitter or Best Buy.
The spike, driven by bullish comments from Tilray’s chief executive, lifted the company’s market cap to $28 billion at about 2:50 p.m.
Many on Wall Street joined in the euphoria, lighting up trading in several marijuanarelated shares.
But late in the afternoon, Tilray’s shares gave up all of their gains — and then some — before a last-minute rally left it up 38 percent, at $214.06, in Toronto. Its closing valuation was $20 billion — up tenfold from its July IPO.
Traders blamed the wild ride, marked by five halts for volatility, on a short squeeze as investors tried to get their heads around the budding business of legalized weed.
Tilray’s steep valuation flummoxed many on Wall Street, who noted the company reported only $17.6 million in sales for the first half of the year.
But Thiel, the libertarian tech tycoon who backed Donald Trump in the 2016 vote, is rolling in the green thanks to Tilray’s runup.
Thiel is a large investor in the pot-focused private equity fund Privateer Holdings, which owns 76 percent of Tilray’s stock — valuing the fund’s stake in Tilray at roughly $15 billion.
Tilray CEO Brendan Kennedy argued on CNBC Tuesday that big pharmaceutical firms and the alcohol industry will soon be forced to partner with cannabis companies as a “hedge” against the growing popularity of legalized weed for medical and recreational use.
And Tilray has a reason to talk about medicinal uses for cannabis.
The company announced Tuesday that the Drug Enforcement Administration had approved one of its cannabis strains to be used in a clinical study at the University of California, San Diego, to test its efficacy in treating essential tremor, a nervous disorder characterized by involuntary shaking, usually in the hands or voice.
Tilray was the only pro- ducer able to deliver a blend of cannabis ingredients THC and CBD in capsule form, a researcher at UCSD said.
The varieties of US marijuana made available for research by the National Institute on Drug Abuse can only be smoked or vaporized, according to Dr. Fatta Nahab, who is leading the study.
“I don’t think that’s going to be a feasible method [for patients],” Nahab told The Post, noting that dosing quantities are difficult to measure with inhaled products.
Nahab spoke to at least two other US medicinal marijuana producers, but they did not show evidence that they could provide the strain he needed in capsule form, he said.
Because there were no US substitutes available, the DEA allowed Tilray’s product to be imported.
Kennedy predicts more joint ventures in the industry, especially with alcohol companies, which are expected to face stiff competition if recreational cannabis becomes more widely legal.
“This is a global opportunity,” Kennedy said.
Currently, nine states and the District of Columbia allow cannabis for recreational use, although US Attorney General Jeff Sessions has warned it remains illegal at the federal level.