The international cannabis giant has announced plans to issue a ‘reverse stock split’, an increasingly common tool in the cannabis industry to inflate stock prices artificially.
Tilray made history in 2018 by becoming the first cannabis company to launch an Initial Public Offering (IPO) on the NASDAQ, but its stock continues to trend downwards, and it is now under threat of being delisted.
Its listing was especially significant for the Canadian company and the industry at large. Given its stringent federal restrictions on cannabis, the US remains an especially difficult market for companies to trade in.
Despite this milestone, these restrictions have also limited the company’s access to capital on the second-largest capital market in the world.
Given the federal restrictions, which the NASDAQ and NYSE markets adhere to strictly, the majority of US institutional investors are prohibited, or unwilling, from investing in plant-touching cannabis companies.
Although Tilray is far from the only major publicly listed cannabis company to suffer from this dynamic, its stock price has continued to trend downwards since peaking in early 2021 amid the peak of the COVID-19 pandemic.
In the last 12 months alone, its stock price has dropped some 81% and has been trading below $1, the NASDAQ’s minimum required listing price, since February 2025.
On June 10, 2025, Tilray’s board members will be asked to vote on whether to implement a reverse stock split at a ratio ranging from 1-to-10 to 1-to-20, depending on the board’s decision.
This means the value of each ordinary share could be inflated by up to 20x, placing Tilray in a position to ‘continue executing on our strategic plans’.
Chief Executive Irwin Simons continued in a public statement: “Looking ahead, we expect this decision to aid in the Company’s efforts to stabilize trading levels, attract and retain institutional shareholders, and decrease our cost structure by over $1 million on an annual run rate basis.
“The fundamentals of our company remain intact, and we are confident that we have the right strategy and team to deliver long-term value for our shareholder base.”
While the company posted earnings below analysts’ estimates earlier this month, with net revenue from its cannabis arm falling from $63m to $54m year-on-year, it remains in relative financial health.
According to its most recent financial figures, Tilray reported a cash and marketable securities balance of over $248 million, ‘which provides the Company with financial strength and flexibility to pursue strategic opportunities and accretive acquisitions’.
Tilray’s NASDAQ-listed stablemate Flora Growth is also following suit, and has proposed a potentially far more drastic share consolidation to its board.
Marking the third NASDAQ-listed cannabis company to announce measures to prevent a delisting, following news last week that IM Cannabis was implementing a stock consolidation for the third time.
As cannabis stocks across the globe continue a consistent and steady decline in value, keeping listings on major stock exchanges is becoming an increasingly expensive and challenging task.
Numerous companies, including Oxford Cannabinoid Technologies, Celadon Pharmaceuticals, and Argent Biopharma, have either suggested or enacted delistings from the London Stock Exchange over the past year.
Each suggested that the liquidity and access to capital that their public listings were intended to provide no longer justified the costs associated with keeping their shares listed.
In May 2024, OCT told Business of Cannabis: “The main point of being on the public market and opening yourself up to all that scrutiny, all that extra cost, and all that regulation is that you’ve got access to capital. That’s not working for biotech and small-cap companies in particular. It’s currently just not delivering what it’s supposed to deliver.”
According to a proxy statement filed with the SEC last week, Flora says it will ask its board of directors to vote ‘to effect a share consolidation of the company’s outstanding common shares… at a ratio not less than 10:1 and not greater than 100:1.
Its board meeting is now scheduled for July 21, and its shares are trading at $0.55, well below the NASDAQ’s $1 minimum threshold.
Chill Brands
CBD and wellness retailer Chill Brands has had its shares suspended on the LSE for months due to a delay in filing its statutory audit for the year ending March 31, 2024.
Following further delays announced last month, the company now says it intends to publish these in ‘mid-May’ and its ‘H1 FY25 Interim Accounts shortly thereafter’.
Recognizing that these filings are long overdue, the delay was attributed to issues in accessing information and records maintained by the Company’s US subsidiary.
In June 2024, it was revealed that two former executives had reportedly attempted to defraud the company when its CEO was suspended.
An internal investigation found that ex-directors Antonio Russo and Trevor Taylor transferred the Chill.com domain and trademarks to a company owned by Mr Russo. The company also moved $400,000 from a US subsidiary to their personal accounts without board approval.
The alleged actions occurred while CEO Callum Sommerton was suspended over insider trading claims, which he says were made by the same directors seeking to remove him and for which he was later cleared.
While the company now says these issues have been resolved, ‘extended efforts to complete the fundraising and the influence of global macroeconomic conditions on this process have had a consequential impact on the company’s financial modelling and overall financial reporting procedures’.
In more positive news, Chill Brands also announced that it has secured a £1m underwritten fundraising deal, raised through the issue of convertible loan notes (CLNs). These notes offer investors the option to convert debt into shares at 1.5 pence each, a 30% discount on the company’s last closing share price before its suspension on 3 June 2024. The notes carry a 10% annual interest rate and mature three years after issue.
The company’s largest shareholder, Jonathan Swann, has underwritten the entire fundraising, guaranteeing the funds will be raised. Investors will also receive warrants to purchase shares at a premium tied to the market price once trading resumes.
Chill Brands said the proceeds will support developing and distributing a new range of compliant vaping products, expanding its chill.com marketplace, and building a broader sales and marketing infrastructure.
In a statement, Chairman Harry Chathli thanked Mr Swann and called the support ‘a critical step’ toward the company’s recovery.
“With the identified challenges now resolved and the fundraising underwritten, we are confident that we will quickly progress towards finalizing the audit and will seek to lift the suspension and resume trading in the company’s shares,” he said.