Shares of Canadian cannabis producer Tilray surged after it announced approval from the Drug Enforcement Administration to import marijuana to the United States for medical research.
The company’s U.S.-listed shares jumped more than 20 percent Tuesday.
Tilray will work with the University of California San Diego Center for Medicinal Cannabis Research to study the safety, tolerability and efficacy of marijuana for a neurological disorder.
“Tilray is proud to support this crucial research,” says Dr. Catherine Jacobson, Director of Clinical Research at Tilray.
“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 Essential Tremor,” he added.
Essential Tremor is a neurological movement disorder characterized by involuntary and rhythmic shaking, according to the company’s website. Tilray added that ET impacts 0.4 percent of the general population, with 4.6 percent to 6.3 percent of those 65 and older suffering from the condition.
Wall Street, meanwhile, heralded the go-ahead as a sign that the DEA is standing by their goal to improve resources and cannabis research. Tilray’s market cap, despite the company posting $9.7 million in revenue as of last quarter, is larger than more than one-fifth of the S&P 500.
“Today’s news is a positive for both Tilray and the broader cannabis stock universe, as additional medical applications and improved government support add another domino to future legalization in the U.S.,” wrote Cowen analyst Vivien Azer.
“Further, the new clinical trial supports Tilray’s medical cannabis prospects (both in U.S. and globally) as it competes with Canopy Growth (39 U.S. patents and 15 clinical trials) in an intellectual property-arms race,” the analyst added.
Programming Note: Tilray CEO Brendan Kennedy will appear on Mad Money tonight on 6 p.m. ET.