By Gene Johnson • Associated Press

SEATTLE — A Canadian company is the first marijuana business to complete an initial public offering on a major U.S. stock exchange, raising $153 million to expand its operations as Canada prepares to legalize the drug nationwide.

British Columbia-based Tilray Inc.’s shares began trading Thursday on the Nasdaq stock exchange. Initially priced at $17, the stock quickly jumped, closing for the day at $22.55 —up about one-third.

Tilray isn’t the first pot company to trade on a major American stock exchange, but it is the first to do so with an IPO, a step that could boost credibility and confidence in the industry, said John Kagia, an analyst with the marijuana market research firm New Frontier Data.

“It’s another high-profile marker of how the cannabis industry is maturing and professionalizing,” he said.

Two other Canadian marijuana companies began trading on major U.S. exchanges earlier this year — Cronos Group on Nasdaq and Canopy Growth on the New York Stock Exchange. Those companies already were publicly traded in Canada.

Nine U.S. states and Washington, D.C., have legalized the recreational use of marijuana and about two-thirds have legal medical marijuana.

But American cannabis companies have been unable to list on major U.S. exchanges because of the drug’s illegal status under federal law. Instead, some have gone public in Canada by being acquired by companies there.

Medical marijuana is legal in Canada, and on Oct. 17, the country will become the first major industrialized nation to legalize production and sale for recreational use. Uruguay is the only other country to do so.

Tilray doesn’t do business in the U.S., but is licensed to produce cannabis for medical use in Canada and Portugal.

In documents filed with the U.S. Securities and Exchange Commission, it said it sold marijuana to “tens of thousands of patients in 10 countries spanning five continents through our subsidiaries in Australia, Canada and Germany and through agreements with established pharmaceutical distributors.”

Chris Barry, a partner at the Dorsey and Whitney law firm in Seattle, handles marijuana investments and mergers in the U.S. and Canada. Major institutional investors, including Cowen, were involved.

“You wouldn’t be able to do an offering of that size without institutional participation,” Barry said.

Tilray plans to use the money to build additional marijuana growing and processing capacity in Ontario, and to repay Privateer Holdings, the Seattle-based private equity firm that controls it.

The IPO “signifies tremendous validation for Tilray as a company, but really for the entire sector,” Tilray Chief Executive Brendan Kennedy said. “It gives us access to large pools of capital, capital that feeds the global paradigm shift taking place.”

Analysts will watch how the Canadian marijuana stocks perform in the U.S. Many are concerned the companies are overvalued amid excitement around a newly legitimate industry with vast growth potential, Kagia said.

Canada’s recreational marijuana market is expected to be worth between $5 billion and $9 billion.

“Right now a lot of investment has been highly speculative. Those valuations feel a little supercharged,” Kagia said. “We expect some kind of correction in the near future.”

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