Canadian cannabis producer Tilray Inc (NASDAQ:TLRY) has sent cannabis investors scrambling with news that it intends to make a market debut soon, and is surprising even long-time supporters with a move that will see its IPO unfold in the US instead of Canada. The IPO comes ahead of the legalization of all cannabis across Canada, which is expected to send the profits of cannabis producers sky-high. Demand is already heating up for the product being pushed by companies like Tilray, and the company intends to ride the current legalization wave all the way to profits on the market.
Here’s everything you need to know about the cannabis producer Tilray and its industry ahead of its upcoming debut in the US market.
It’s a great time to be a cannabis investor
In Canada, cannabis investors are enjoying a heyday thanks to the recent legalization of marijuana. Canada recently became only the 2nd nation in the world to fully legalize recreational cannabis consumption, and fully-legal marijuana is expected to hit consumer shelves as quickly as this October. As consumers and companies alike are scrambling to prepare themselves for a new era of legal cannabis in Canada, companies like Tilray are hoping to drum up enough funds to ensure they have a firm foothold in the market for decades to come.
We don’t know too much about Tilray’s internal operations yet, and may not get to learn more until the date of its market debut draws closer, but what we know of the company’s industry thus far should have cannabis investors thrilled. That’s because there’s never been a better time to invest in the future of the cannabis industry, and companies like Tilray are set to cash in on a massive demand that’s been stymied by the criminalization of cannabis for years. Already, Tilray is offering medical marijuana to consumers in Canada through seven different brands, and the company will soon be churning out cannabis for recreational consumption, too.
Essentially, we’re going to see a billion-dollar cannabis industry pop up in Canada literally overnight. For its part, Tilray is hoping to cash in during its IPO to the tune of some $100 million, according to its S-1 filing. The company has demonstrated tremendously strong growth recently, and intends to ride the growing wave of excitement all the way to the bank. We don’t know the specific details of how many shares are being offered just yet, but we do know that Tilray has managed to book $23 million in sales for the 12 months ended March 31, 2018. While pricing terms aren’t disclosed, then, investors have plenty of reasons to believe that Tilray is no small fish in its market.
Making it in the cut-throat cannabis business
The cannabis industry may be thriving right now, but with any level of success in the market comes competition. Tilray intends to become truly global in scope over the next few years with the help of Zippa loans, and wants to offer its products in every country where medical marijuana is legalized. To do that, however, it will have to compete with the countless other cannabis companies who are also looking to cash in on the frenzy surrounding marijuana’s legalization. It’s been well-established that the long-term cultivation of cannabis is all but certain to morph into a race to the bottom, and profits that are plentiful today could realistically dry up in just the next few years.
That being said, it’s safe to bet on the fact that the cannabis industry as a whole will experience truly staggering growth for the foreseeable future. We can expect companies like Tilray to be inundated with a great demand for their products, and as the company moves to expand from its medical operations into the recreational sphere, it could substantially grow in size. The fact that the US is warming up to cannabis in the same way that Canada did doesn’t hurt the company’s chances, either.
As long as public opinion in the US continues to turn in favor of legalized cannabis, expect companies like Tilray to continue sharpening their knives in eager anticipation of carving up a bigger share of the market for themselves. This marvelously profitable business will be dominated by companies like Tilray, which establish strong consumer brands the minute their product is legalized, and latecomers will find themselves struggling to establish themselves. Thus, while we don’t know too much about the intimate financial details behind Tilray, we can be competent that the Canadian cannabis producer has a bright future ahead of it. As the cannabis industry continues to swell in size, expect more IPOs from aspiring companies like Tilray. The Canadian cannabis producer has big ambitions, but its dreams can easily be achieved in today’s thriving and steadily growing international marijuana market.