Sundial Growers Inc. (SNDL.O) tumbled as much as 28 per cent in its trading debut on the Nasdaq as investors grow more skittish about the cannabis sector following disappointing earnings reports.

Sundial fell to US$9.55 in New York Thursday after raising US$143 million selling shares at US$13 apiece in one of the largest IPOs in the pot industry. Cannabis stocks have slumped since the beginning of May amid weak results and a regulatory breach at CannTrust Holdings Inc.

“We fully expected volatility, we continue to expect volatility,” Chief Executive Officer Torsten Kuenzlen said in a phone interview.

He said the regulatory breach at CannTrust Holdings Inc., which led that company to fire its CEO and suspend sales of its products, has made investors “a little nervous,” but Sundial was able to sell itself to investors as a credible company with an experienced management team. Kuenzlen previously held management roles at Coca-Cola Co. and was chief commercial officer at Molson Coors International.

“What differentiates us is we’re very much a consumer packaged goods industry play, we have people that have decades of experience in the industry, and investors really found comfort in knowing this is a professional team,” he said.

Calgary-based Sundial has supply agreements with five Canadian provinces and operates two pot-growing facilities in Alberta, with another under construction in British Columbia. It acquired U.K.-based Bridge Farm Group in July, giving it three more locations, where it plans to grow cannabis and hemp alongside Bridge Farm’s legacy flower and herb business. It expects to report gross revenue of US$19 million to US$21 million for the second quarter and a “significant net loss,” according to the IPO prospectus.

Sundial’s IPO is slightly smaller than the US$153 million Tilray Inc. raised in its debut last summer, and marks the second-largest IPO of a Canadian company this year, after software maker Lightspeed POS Inc.

Cowen, BMO Capital Markets and RBC Capital markets led the IPO.