A Canadian cannabis company is set to be the first to export legal weed to the US — and its stock is soaring (TLRY)

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September 18, 2018 2:17 PM

The drugs, delivered in capsule form, are designed to treat essential tremor, a neurological disorder that causes involuntary and uncontrollable shaking that can make it difficult for patients to perform everyday tasks like eating, drinking, or writing. The trial is expected to begin in early 2019.

A production assistant inspecting a cannabis plant in a state-owned agricultural farm in Rovigo, Italy, about 40 miles from Venice.

The stock surged 24% following the news, hitting a fresh high of $133 in early trading.
It's now up 682% since the company's July initial public offering.

Tilray shares were up more than 20% in trading Tuesday after the British Columbia-based cannabis producer became the first company to receive approval to export legal weed to the US.

The drugs, delivered in capsule form, have been approved for use in a clinical trial at the University of California at San Diego to treat essential tremor, a neurological disorder that causes involuntary and uncontrollable shaking that can make it difficult for patients to perform everyday tasks like eating, drinking, or writing. The trial is expected to begin early next year.

"Tilray is proud to support this crucial research," Catherine Jacobson, Tilray's director of clinical research, said in a press release.

"If this study can identify cannabinoids as a potential treatment for patients suffering from essential tremor, we can conduct further research and potentially provide alternative effective methods of relief for the high numbers of patients with ET."

Today, essential tremor is treated with drugs originally developed to treat conditions such as high blood pressure or seizures and even sometimes with Botox. Tilray is also involved in trials to treat post-traumatic stress disorder, a form of epilepsy, brain cancer, and side effects of chemotherapy.

Tilray's stock price has soared more than 680% — with Tuesday's gains — since the company went public in July. And while Wall Street analysts remain optimistic for the company's outlook, the rally could be unsustainable. Analysts give the company an average price target of $49 — less than one-third of Tuesday's high of $153.

"Tilray has flowered into a global leader and GMP-certified cannabis researcher, cultivator, processor and distributor," Mike Grondahl, an analyst at NorthLand Securities in Minneapolis, said in a note to clients last month.

"We believe Tilray has positioned itself well to capture Canada's upcoming adult-use market share by leveraging its high-grade, high-potency pharmaceutical reputation."

Other cannabis companies like Canopy Growth, Cronos Group, and Aurora Cannabis were up by 2% to 3% in premarket trading.

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