Canadian pot firm Tilray posted strong gains in trading Wednesday after the Peter Thiel-backed firm gained U.S. federal approval to import marijuana for medical research purposes.
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Tilray shares closed 38 percent higher after a volatile day of trading that saw the company’s stock climb as much as 90 percent before giving back some of its gains. Trading of the stock was halted on multiple occasions due to volatility.
Federal approval is “another encouraging sign of improved government support of cannabis research,” Cowen analyst Viven Azer said in a research note according to Bloomberg, adding that the apparent support represented “another domino to future legalization in the U.S.”
Canopy Growth, a cannabis company backed by Corona beer parent Constellation Brands and a Tilray competitor, fell nearly 5 percent in trading. Based this week’s gains, Tilray surpassed Canopy, which previously ranked as the world’s largest cannabis company, in market cap.
Privateer Holdings, an investment fund backed by Thiel, owns 76 percent of Tilray, according to Bloomberg. Thiel is best known for co-founded PayPal.
Tilray announced Tuesday that the U.S. Drug Enforcement Administration would allow it to import a cannabinoid study drug to the U.S. for use in medical testing at the University of California-San Diego Center for Medicinal Cannabis Research.
“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 ET.”
Recreational marijuana is currently legal in nine U.S. states, as well as Washington, D.C.