Tilray stock rises 29% on plans to import cannabis to U.S. for clinical trial

The U.S. Drug Enforcement Administration has signed off on cannabis cultivator Tilray Inc.’s plan to import a marijuana product from Canada to test its effectiveness at treating a disorder that affects millions of Americans.

The DEA’s signoff is the final regulatory hurdle Tilray TLRY, +28.95%  needed for a clinical trial of the medication’s effects on essential tremor, a neurological movement disorder. Tilray, the first pot producer to go public on Nasdaq, is testing for marijuana’s potential efficacy for different diseases, but its other four studies are taking place in Canada, Spain and Australia, in part because of U.S. federal prohibition of the drug.

“There is no good treatment for essential tremor,” Tilray clinical research director Catherine Jacobson said. “The ultimate goal, what we want to know, is we want to understand whether cannabinoids might be a good treatment.”

Don’t miss: For Canadian marijuana investors, coming to U.S. is a ‘crapshoot’ that can end in lifetime ban

Tilray said it is providing the formulation for the trial in capsule form that will let researchers test an “investigational drug product” that contains cannabidiol, or CBD, and tetrahydrocannabinol, or THC, the latter of which is the psychoactive component in cannabis.

The trial at the University of California, San Diego, is expected to kick off in 2019 and is backed by Tilray and the International Essential Tremor Foundation, a nonprofit organization that provides education and funds research surrounding essential tremor. Initially, 16 people will participate, and Jacobson said that if the study is successful, it would lead to larger testing groups.

Jacobson says there is a “good scientific rationale” for testing whether cannabinoids can treat essential tremor and that patients have been reporting for some time that taking some form of cannabis has improved their quality of life.

This clinical trial is part of a larger effort to determine “how to target therapies for specific symptoms,” Jacobson said. Questions around dosing, efficacy and safety have all essentially been left up to patients to determine on their own.

Related: The first cannabis-derived drug was just approved in the U.S.

The research will be overseen by neurologist Fatta Nahab at UCSD’s Center for Medicinal Cannabis Research. Nahab had been searching for a company that could produce a cannabis-based medicine that can treat essential tremor and meet Food and Drug Administration standards, Jacobson said.

Tilray went public in July at $17 a share and surged 29% Tuesday to $154.98, roughly a sixfold increase from its IPO price. The S&P 500 index SPX, +0.54%  has gained 3.6% since Tilray went public in July.

See also: Weed beer is near, and it’s gonna get weird

Short sellers have taken a considerable position in Tilray stock, with $381 million in short interest, according to research from S3 Partners, which also said the stock has become very expensive to short, with borrow fees ranging from 450% to 600% on Monday.

Cannabis is illegal according to U.S. federal law, though several states such as California, Oregon and Washington have legalized the drug for recreational adult use. Canada is set to legalize pot for adult consumption Oct. 17.

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