Got Pot?
Tilray Inc. has signed a global supply and distribution agreement for medical marijuana with pharmaceutical giant Novartis AG, in what Max A. Cherney, writing in www.marketwatch.com, described as “Big Pharma’s first deal of its kind with Big Marijuana.” It continued a trend of legacy industries linking up with the new breed of marjiuana producers, Cherney said.
The CEO of Tilray said that the distribution deal was first global partnership between a marijuana company and a big pharmaceutical company, enabling the company to expand into more markets, more quickly. Tilray shares opened nearly 10 percent higher after the deal was officially announced and reached gains of 12 percent in the first few minutes of trading. Tilray stock has gained nearly 200 percent since it began trading earlier in 2018 after its initial public offering. Novartis stock was close to even at the opening of trading.
After investments by big beverage and tobacco companies in Canadian pot producers focused on the recreational market, the agreement between Tilray and Novartis gives additional legitimacy to an industry that “until recently was dominated by drug cartels, outlaw motorcycle clubs and smugglers,” Cherney said. Tilray Chief Executive Brendan Kennedy. Who put months of work into the deal, said that the partnership “will give his company a sales and distribution channel in dozens of countries.”
He added, “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.”
The deal has its beginnings in Canada, the second country in the world and only member of the G-7 to legalize marijuana for recreational use, Cherney reported. Tilray signed a similar agreement to distribute and sell medical cannabis products in 2017 through the Novartis subsidiary Sandoz. That agreement was the catalyst for this much larger deal, which “expands the agreement to the roughly 35 countries around the world that have medical cannabis laws, a number that Kennedy says will likely increase in the future,” Cherney’s article said.
Tilray will have access to Sandoz’s huge global sales channels to help smooth the way for Tilray to introduce medical products where it is legally allowed to do so. Tilray procured an exclusive deal with Novartis, which “is not allowed to partner with another pot company, and Tilray cannot make a pact with another pharmaceutical business on non-combustible products.”
Kennedy added, “ “This is an agreement that will take advantage of Sandoz’s global footprint and leverage (its) brand, which inspires trust and confidence with pharmacists around the world. Also, we can use their salesforce to educate physicians and pharmacists around the world — which can be a challenge.”
According to Kennedy, the companies will work together to develop new products. They want to have several that focus on defined dosage. The agreement covers non-smokable and non-combustible medical products.
Kennedy explained that the agreement with Novartis does not mean that Tilray is going to prioritize the medical cannabis market ahead of recreational pot, which it currently offers in Canada. “For Tilray, both are equally important,” he said.
