Tilray Amends IPO On NASDAQ to Raise $135 Million

Canadian-based cannabis cultivator, processor, and distributor Tilray Inc. has launched an initial public offering (IPO) of its Class 2 common stock and has applied to list its shares on the NASDAQ (NDAQ)  exchange under the ticker symbol “TLRY” as previously announced. The company amended the offering to raise $135 million.

Tilray is offering 9,000,000 shares at an initial price to the public between US$14.00 and US$16.00 per share. The company also said that it intends to grant the underwriters a 30-day over-allotment option to purchase up to 1,350,000additional shares.

Tilray was one of the first companies to receive a license in Canada to produce medical marijuana. In addition to its home country, Tilray products have been made available in Argentina, Australia, Canada, Chile, Croatia, Cyprus, the Czech Republic, Germany, New Zealand and South Africa. It was initially formed as a subsidiary of Privateer Holdings, whose portfolio of brands also includes Leafly, Marley Natural, and Goodship.

Its medical cannabis has been favored by patients as a precise and predictable product. Tilray has not been granted exclusive rights by the Canadian government to produce or distribute any category of adult-use cannabis products. Instead, it has “secured the exclusive rights from a wholly owned subsidiary of Privateer Holdings to produce and distribute a broad-based portfolio of certain adult-use brands and products in Canada.”

The company reported $20.5 million revenue for the year ending in 2017, a 62% increase over 2016′ revenue of $12.6 million. For the three months ending in March 2018, revenue was $7.8 million, a 55% increase over $5.0 million for the same time period in 2017.

Net losses were trimmed slightly in 2017 at $7.80 million versus the prior year’s net loss of $7.88 million. Losses grew in the first quarter of 2018 as the company reported $5.1 million in net losses versus only $679,000 in losses for the previous year’s first quarter. The company has an accumulated deficit of $45.6 million as of March 2018.


The risk section in most IPO filings must spell out every possible and potential problem the company could face. Tilray noted that with Canada’s upcoming recreational cannabis market, medical marijuana sales could potentially drop. The company also noted that Canada could become oversupplied with marijuana with recreational legalization and may be unable to export that oversupply.

Use of Proceeds

The proceeds from the IPO will be used to increase Tilray’s liquidity and raise capital to further
develop its cultivation and processing capacity. The plan is to build out of cultivation and processing capacity at Enniskillen, Ontario, London, Ontario, and Cantanhede, Portugal facilities. In addition to the building expansion, Tilray plans to repay outstanding principal and interest under the Privateer Holdings debt facilities which it has used for working capital and general corporate purposes. The company statement said that as of March 31, 2018, there was $34.6 million outstanding under the Privateer Holdings debt facilities and the interest rate was 2.54% for 2017 (which represented 2.4 times the mid-term applicable federal rate). The Privateer Holdings debt facilities are payable on demand of Privateer Holdings.


According to a company statement, Tilray has also filed a preliminary prospectus for a proposed IPO in Canada with the securities regulatory authorities in each province of Canada other than Quebec, in order to qualify the offering of securities in Canada and to ensure that purchasers in Canada are not subject to restrictions on resale. Still, Tilray does not intend to list on any stock exchange in Canada.

Privateer will continue to own a majority of the voting power of the outstanding shares, making it a “controlled company” by NASDAQ’s definition.

Cowen and BMO Capital Markets are acting jointly as book-runners for the proposed IPO. Cowen is acting as the sole book-running manager for the IPO in the United States, and BMO Capital Markets is acting as the sole book-running manager for the IPO in Canada. Eight Capital is acting as lead manager for the IPO in Canada. In the United States, Roth Capital Partners is acting as lead manager and Northland Capital Markets is acting as a co-manager for the IPO.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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