Tilray stock (NASDAQ:TLRY) is surging at the time of writing. Up over 7%, TLRY is selling for $70.60 a share.
The cannabis producer has a major deal with Switzerland's Novartis AG (NYSE:NVS) to thank for its gains. The signing marks another legacy company partnering with a cannabis producer in this new era of cannabis legalization.
Let's check it out.
Tilray Stock in Green
The Canadian cannabis producer will go global with a supply and distribution agreement for medical marijuana with the pharma giant.
The deal will now give Tilray sales and distribution channels across dozens of countries.
As CEO Brendan Kennedy puts it:
“Around the world, people are substituting medical cannabis for traditional pharmaceutical products [...] Medical cannabis is disrupting Big Pharma, and Sandoz and Novartis are smart for being ahead.”
Right Moves for Tilray Stock
And it is a smart move—one that many big corporations are making as the cannabis industry becomes more and more legitimate following increased legalization. A deal of this capacity only adds further legitimacy to the industry once run by illegal cartels and smugglers.
In 2018 alone, we've seen a partnership strike up between alcohol beverage maker Constellation Brands (NYSE:STZ) and Canopy Growth Corp (TSX:WEED) (NYSE:CGC). We've recently seen tobacco giant Altria (NYSE:MO) shake hands with Cronos Group (TSX:CRON) (NASDAQ:CRON).
And now today's partnership between Tilray and Novartis AG is the first major deal between a cannabis company and a global pharmaceutical business. Tilray stock is bound to reflect the news positively.
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The Deal in Detail
Tilray had already signed a pact with Novartis subsidiary Sandoz to sell and distribute medical cannabis products in 2017. Today's deal is a much larger expansion on that agreement as it pushes the boundaries to 35 countries around the world that have medical marijuana laws.
This number will no doubt increase even further in the future.
Exclusive
Tilray has exclusively signed itself to Novartis AG and vice versa. Under the terms of the agreement, Tilray is not allowed to partner with another pharmaceutical business on non-combustible products and Novartis is not allowed to partner with another cannabis producer.
Kennedy said further:
“The key point is that it will allow us to expand into more markets, more quickly. This is an agreement that will take advantage of Sandoz’s global footprint and leverage their brand, which inspires trust and confidence with pharmacists around the world."
Tilray stock is set to explode in the coming months on the back of this deal. The opportunity afforded to Tilray means global markets and much larger sales.
What do you think about the cannabis deal?
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