Tilray Inc (NASDAQ:TLRY) shares jumped on Tuesday as the company announced that it would be working with pharmaceutical company Sandoz AG to make medical marijuana products available around the globe. Tilray already has a presence in a dozen countries and this will help accelerate the company’s incredible growth.
And with 35 countries having legalized some form of medical marijuana, there is still ample opportunity for Tilray to continue to build its global market share.
Tilray CEO Brandon Kennedy on the news: “Tilray is a global company and we’re thrilled to build upon the success and momentum from our existing agreement with Sandoz Canada by taking our partnership global. Sandoz AG will be a valuable partner as we work together to improve access to the highest quality medical cannabis products in countries all over the world.”
Under the agreement, the companies will co-brand and potentially collaborate on new products as well. While the two companies have worked together in the past, their previous agreement had focused on Canada, whereas this new one will set its sights on the global cannabis market.
Could we see more deals to come?
This is a big move and yet another milestone for the cannabis industry, as Sandoz is owned by pharmaceutical giant Novartis. It’s the first big pharmaceutical company to get involved in the cannabis industry and Tilray could definitely use its vast network to its advantage.
There haven’t been many companies linking up with the cannabis industry just yet, but as we continue to see more pot stocks pair up, the choices might be limited for latecomers to the party.
This could precipitate more deals as top stocks like Tilray and Canopy Growth Corp (TSX:WEED)(NYSE:CGC) now have deals in place with other industries, and the number of potential options might be limited for others looking to get in on the cannabis craze.
While there’s definitely been some hesitation from other industries, the bigger danger could be missing out on a deal altogether. For that reason, I wouldn’t be surprised if we see some more wheeling and dealing to come.
Tilray could have another big year in 2019
Despite only having $31 million in sales over the past 12 months, Tilray has been one of the hottest pot stocks this year, tripling in value since its IPO. And while it is nowhere near its peak price of $300 a share, it has still done very well, but this deal could make next year even bigger for the company.
With the U.S. still being very difficult for a company to navigate, stocks like Tilray and others have had to look to the rest of the world in order to grow their market share. The big advantage the stock has now is that by partnering with a big name like Sandoz, it will lend credibility to its products, especially any co-branded ones.
In the world of pharmaceuticals and healthcare, name recognition and image are everything. And by partnering with a big brand, Tilray will have a leg up on others in the medical marijuana market. While a lot of the excitement may be surrounding recreational pot, the medical segment is the one that has been making headway around the world, and the growth potential there could be significant.