INSUBCONTINENT EXCLUSIVE:
Tilray, a five-year-old, British Columbia-based medical cannabis company that sells its products to patients, researchers, pharmacies and
even governments, saw its shares get high (sorry) on the Nasdaq today, after the company priced 9 million shares at $17 apiece and watched
them soar, closing at $22.39, a jump of slightly more than 32 percent.The company raised $153 million in the offering, capital it will
reportedly use in part to fuel its marijuana growing and processing facilities in Ontario.It was a huge win for the cannabis industry, which
has been growing like a weed (sorry again)
Related startups attracted $593 million in funding last year, twice what they raised in 2016 and a meaningful jump from the $121 million
invested in related startups in 2014, according to CB Insights
Among the different types of companies to garner investor dollars, showsCB Insights& research, are: startups focused on research or
distribution of medical marijuana products (as with Tilray); tools for ensuring compliance with state and federal marijuana laws; startups
focused on payments for marijuana companies; startups collecting data and producing marketing insights about the industry; and companies
creating novel strains and types of marijuana using new farming techniques.Tilray performance today is also a very positive signal for
Seattle-based Privateer Holdings, a private equity firm that owned 100 percent of the startup as it headed into its offering
In fact, Privateer CEO, Brendan Kennedy, is also the CEO of Tilray
(Cannabis companies are weird.)Privateer has itself raised more than $200 million since its founding in 2010, including from Founders Fund
and Subversive Capital, and it has used that money to finance, acquire and incubate companies
While it incubated Tilray, for example, it also ownsLeafly, a large cannabis information resource that it acquired in 2011
Another of its portfolio companies isMarley Natural,a Bob Marley-branded cannabis line that it launched in partnership with the Marley
estate and that sells a line of cannabis strains, smoking accessories and even body care products.It isn&t exactly clear how much Privateer
had sunk into Tilray (we have a press request into the company)
Tilray announcedC$60 million in Series A funding back in February, money it said had come from a &group of leading global institutional
investors.& But according to its S-1, it was solely owned until today by Privateer.What we do know: Tilray remains unprofitable, reporting a
net loss of $7.8 million last year
The company also cannot sell its products in the U.S
market, given that marijuana remains illegal under federal law, even though 30 states and Washington, D.C
have legalized it in some form
government classifies marijuana as a schedule 1 drug, meaning it considered to have no medical value and a high potential for abuse.That
could change, but as this Vox explainer makes clear, a review process for the current schedule would need to be initiated by either the U.S
Secretary of Health and Human Services or the Attorney General, and current Attorney General Jeff Sessions despises marijuana, saying once
that &Good people don&t smoke marijuana.&He seems to be among a dwindling minority
According to a Gallup Poll published last October, 64 percent of Americans favor legalization.
