CGC stock is in the red today despite an announcement that Canopy Growth (TSX:WEED) (NYSE:CGC) had entered into a memorandum of understanding with Israeli firm Univo Pharmaceuticals for the sale, production, and marketing of medical cannabis.
Israel Deal Fails to Spark Movement in CGC Stock
The first phase of the agreement will see Univo import 470 kilograms of dry medical cannabis to Israel from Canopy Growth, which it will then refine into finished products and will carry the joint branding of both companies. The second phase of the agreement will allow Canopy to carry out manufacturing and processing services from Univo's plant in Ashkelon for export to European cannabis markets under the EU-GMP standard. Despite news of the deal, CGC stock is down 5.6% today.
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"The agreement will enable us to grow both our market share in Israel, without being dependent on the farm and on local supply, and to continue selling and expanding our product portfolio of medical cannabis products of the highest quality, while laying the foundation for Canopy to produce in the international market,” said Golan Bitton, CEO of Univo Pharmaceuticals. Currently, exports from Israel are not permitted, but the country's Ministry of Health has ruled that shipments could begin once the cannabis shortage is overcome. CGC stock is currently trading for $17.58.
Canopy Follows Tilray in Israel
With Canopy Growth aiming to capitalize on the Israeli market, close rival Tilray Inc (NASDAQ:TLRY) has already beaten it to the punch. Back in January, it signed the first-ever deal to deliver medical-use cannabis to Israel through an agreement with Canndoc Ltd. That deal saw Tilray ship 2.5 tonnes of medical-grade cannabis from its facility in Portugal, with Canndoc also agreeing to export up to five tonnes of cannabis for use in products marketed by Tilray. Like CGC stock today, that deal failed to spark any upward movement in Tilray shares.
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