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Tilray Shares Jump On The Back Of Novartis Partnership

December 18, 2018 10:30 am
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Tilray Shares Jump On The Back Of Novartis Partnership

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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