The company also has its sights set on Europe, as it believes that the European Union will ultimately become the world's largest medical marijuana market. In particular, TLRY sees very significant near-term opportunity in Germany, which legalized medical marijuana last year. In light of recent successful legalization campaigns within these target regions, TLRY certainly has some opportunity ahead to take advantage of significant growth catalysts.
As for its IPO, the deal priced at $17, above the $14-$16 expected range, generating total gross proceeds of $153 mln. The company plans to use the capital to expand its cultivation resources, and it also may look at acquisition opportunities.
The deal was led by Cowen & Company, and shares opened for trading earlier this morning on the Nasdaq at $23.05.
TLRY is a Canada-based supplier of cannabis products. It has supplied cannabis products to tens of thousands of patients in ten countries spanning five continents through subsidiaries in Australia, Canada, and Germany and through agreements with pharmaceutical distributors. It also produces medical cannabis in Canada and Europe. It was one of the earliest companies to be licensed by Health Canada to cultivate and sell medical cannabis in Canada, and it was also one of the first companies to become a licensed dealer of medical cannabis in Canada.
Its products have been made available in Argentina, Australia, Canada, Chile, Croatia, Cyprus, the Czech Republic, Germany, New Zealand, and South Africa. Tilray was the first company to legally export medical cannabis from North America to Africa, Australia, Europe, and South America, and it was among the first companies to be licensed to cultivate and process medical cannabis in two countries, Canada and Portugal.
According to the United Nations, the global cannabis market, including the illicit market, is estimated to be $150 bln, annually, and approximately 3.8% of the adult population, or over 180 mln people, are estimated to be cannabis users. Although cannabis is still heavily regulated, medical use is now authorized at the national or federal level in 29 countries. The pace of regulatory change globally has been rapid, with more than 25 countries having introduced significant reforms to their cannabis use laws since 2015.
Turning quickly to the financials, TLRY began operating in 2014. It generates revenue but has not yet generated a profit. The company intends to continue to spend significant funds to increase its production capacity, invest in R&D, and expand its sales operations, so it may be a while before they turn a profit. In terms of revenue, it grew 62% in 2017 to $20.5 mln. In 1Q18, revenue grew 55% year/year to $7.8 mln.