Canadian cannabis producer Tilray Inc. (NASDAQ: TLRY) surged Tuesday morning on the announced partnership with pharmaceutical
giant Novartis AG (NYSE: NVS).
What Happened
Tilray said that its subsidiary, Tilray Canada, has entered into an agreement with Sandoz AG, part of the Novartis AG. Under the
terms of global framework agreement, Sandoz may help Tilray commercialize its non-smokable and non-combustible medical cannabis
products around the world. Tilray and Sandoz might develop medical marijuana brands and products. In addition, Tilray will supply
Sandoz with medical marijuana products.
The agreement builds on top of the previous alliance between Tilray Canada and Sandoz Canada, which was announced in March.
Why It's Important
The partnership between Tilray Canada and Sandoz will help both companies leverage their strengths as cannabis' popularity
spreads across the world. There are 30 countries worldwide that allow medical marijuana to one degree or another. Tilray already
has operations in 12 countries, including Australia, New Zealand, Germany, Portugal and Latin America.
In this way, the partnership will allow Tilray expand into new markets and develop new products in collaboration with the
subsidiary of one of the largest pharmaceutical companies.
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What's Next
The partnership between a large cannabis company and a pharmaceutical giant will certainly provide a boost to the medical
marijuana segment, not only by increasing availability of medical-grade pot around the globe, but also through additional capital
flowing in research and development, which could potentially result in more cannabis-based drugs.
At time of publication, Tilray traded up 8.7 percent at $71.65 per share.
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