Greenlane Holdings Inc ( GNLN ) shares are trading lower Tuesday, pulling back after rallying more than 365% on Monday. Here’s a look at what you need to know.

What To Know: Greenlane ( GNLN ) shares surged on Monday after the company announced that it entered into a non-binding letter of intent (LOI) to be the exclusive distributor of Safety Strips in the U.S.

Safety Strips offers fentanyl, xylazine and drink spike detection test strips. To use the test, a small sample of the substance is mixed with water. The test strip is then dipped into the liquid for 15 seconds. After waiting approximately five minutes, the results can be read, offering a quick way to identify the presence of dangerous adulterants. 

“We are excited and proud to provide Safety Strips affordable and highly accurate tests with trace level fentanyl and xylazine detection capabilities to our customers throughout the U.S.,” said Barbara Sher, CEO of Greenlane ( GNLN ).

“Safety Strips products are an innovative and complementary addition to our extensive product portfolio, and we plan to leverage our strong distribution, operations, marketing and sales teams to support the brand.”

Shortly after shares soared on the announcement, Greenlane ( GNLN ) said it entered into a securities purchase agreement with an institutional investor for aggregate gross cash proceeds of $6.5 million. In connection with the private placement, the company will issue an aggregate of 2,363,637 units and pre-funded units. Each unit will consist of one share of common stock and two common warrants.

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Tuesday morning, Greenlane ( GNLN ) highlighted recent stock purchases from its CEO. The company announced in a press release that Sher acquired 12,500 common shares of Greenlane ( GNLN ) in the open market between Aug. 5 and Aug. 9 at an average price of $2.66 per share.

“The purchase of Common Shares by the Chief Executive Officer of the Company reflects confidence in the intrinsic value of the stock and the near-term and long-term growth prospects of the Company,” the company said.

It’s worth noting that Greenlane ( GNLN ) effected a one-for-11 reverse stock split on Aug. 5. The stock began trading on a post-split basis that day. The stock also appears to be seeing increased attention from retail investors. According to Benzinga Pro, 19.41% of the company’s float is currently being sold short.

GNLN Price Action: Greenlane ( GNLN ) shares were down 14.2% at $9.87 at the time of publication, according to Benzinga Pro.