Tilray Inc. (NASDAQ:TLRY), one of the Canadian marijuana stocks, saw its stock surge after Privateer Holdings decided not to sell its shares in Tilray in first half 2019
SmallCapPower | January 15, 2019: Tilray Inc. (NASDAQ:TLRY), one of the Canadian cannabis stocks trading in the United States, closed nearly 20% higher on Friday after rising 29% intraday following a statement by its largest shareholder, Privateer Holdings Inc., that it does not plan to register, sell or distribute shares of Tilray in the first half of 2019. A private equity firm focused exclusively on the cannabis industry, Privateer Holdings holds 75 million Tilray shares (~80% of Tilray’s current outstanding shares of 93.1 million shares) and is eligible to sell its stock as the private placement lock-up expires this week. The private equity firm also said that if, and when, it does decide to sell shares, it will do so in an orderly manner so that the impact on the tax considerations of its investors and on the public float of Tilray is favourable.
The market has been nervous about possible selling by Privateer heading into the lock-up expiry, but the statement by the private equity shop is a big positive for Tilay investors.
Michael Blue, Managing Partner of Privateer, said, “Privateer Holdings strongly believes in Tilray’s long-term global growth strategy and pioneering role in shaping the future of the legal cannabis industry. Given this, we do not have plans to register, sell or distribute the shares Privateer holds in Tilray during the first half of 2019. When we decide to distribute shares, we will do so in an orderly and deliberate manner to maximize tax-efficiency considerations for Privateer investors, while also taking into consideration potential impacts on Tilray’s public float. And we will do it in a way that reflects our long-term confidence in Tilray’s business model and management team.”
Tilray is focused on the research, cultivation, production and distribution of medical cannabis and cannabinoids, and is the world’s first licensed producer of medical cannabis to have its facility Good Manufacturing Practices (GMP) certified, as per European Medicine Agency (EMA) standards. Tilray was the third Canadian cannabis company to get listed on a U.S. stock exchange, after Cronos Group (NASDAQ:CRON) (TSX:CRON) and Canopy Growth Corporation (NYSE:CGC) (TSX:WEED), but the first to raise capital via a U.S. listing. Tilray stock currently trades at a market capitalization of US$8.9 billion on the NASDAQ.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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