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Novartis Partners with Canadian Medical Marijuana Company Tilray

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Rumors have long been circulating in the medical community that big pharmaceutical companies are going to enter the medical cannabis industry soon.

According to some experts, the only thing that is stopping them is that they are cautious and wary of the legal implications of entering the market.

The speculation came to a conclusion when Novartis AG, a multinational pharmaceutical company from Switzerland and one of the largest players in the pharmaceutical industry signed a deal with Tilray. As a result of this deal, this Canadian company will be the sole supplier of medical marijuana to Novartis AG.

Big Pharma Enters Marijuana Industry - Novartis Partners with Tilray

The Nanaimo City-based Tilray grows several types of whole flowers for their Canadian medical cannabis clientele and produces several types of ground marijuana, capsules, and drops.

Tilray forecasts growth this year as the government of Canada has authorized the trade and consumption of cannabis for adult use. It will become a legal policy sometime this year.

Reports said that Tilray and Novartis agreed that the latter’s subsidiary- Sandoz Canada, will procure non-combustible and non-smokable medical marijuana products.

Although this information was revealed, they did not disclose the terms of the agreement. They only shared that Sandoz Canada will purchase products from Tilray in bulk and will distribute the merchandise to health care clinics and pharmacies. Sandoz Canada will also help Tilray in researching and developing products that can further help people and of course can turn into profit.

Tilray is an American company but all of its facilities and the head of operations are located in Canada. It currently serves Canadian patients who are in need of medical marijuana.

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They have also reached Latin American, the European Union, and the Australian markets. Tilray has achieved a Series A capital raising in February raising 60 million Canadian dollars or roughly 46.3 million in US dollars.

We are thrilled to form a strategic alliance with Tilray to strengthen our portfolio,” said Michel Robidoux. He is the general manager and the president of Sandoz Canada. “We are committed to making every reasonable effort to respond to patients’ medical needs by increasing the number of high-quality, adequately dosed non-smokable, non-combustible medical cannabis products at the disposal of doctors,” Robidoux said in his statement.

A private equity firm from Seattle, called Privateer Holdings controls Tilray. Privateer focuses and invests their resources in non-US marijuana businesses.

Brendan Kennedy, the CEO of Tilray, also one of the founders of Privateer Holdings was interviewed about the Novartis agreement. In his statement, he said that the deal is one of the biggest breakthroughs on the promising path on regulating and making medical marijuana a legitimate medical alternative.

Brendan Kennedy - CEO of Tilray

Kennedy is also happy that they are making history in what he believes to be the first licensed cannabis producer that is approved at the federal level.

He said that they are the only one to produce medical marijuana and create a strategic partnership with a local subsidiary of a powerhouse pharmaceutical company that will boost and enhance the availability and the potency of medical marijuana drugs for patients in Canada who really need it.

Privateer Holdings also looks forward to the possible strategic moves they can make in the partnership including co-branding. They hope that the Sandoz-Tilray partnership can create products that can further establish the name of Tilray in the industry and to the market.

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Aside from Tilray, Privateer Holdings also have Leafly, Goodship, and Marley Natural under their investment belt. Leafly is a website that educates people about marijuana and has a library of information about the subject; Marley Natural is a venture initiated by the relatives of the reggae icon and popular marijuana user Bob Marley; and Godship focuses on baking and cooking edibles with marijuana.

Teva Pharmaceutical Industries Ltd's agreement with Israeli company, Syqe Medical to distribute cannabis inhalers

Novartis is the first ‘big pharma’ to enter the cannabis industry, but it is not the first pharmaceutical player. Teva Pharmaceutical Industries Ltd. has an agreement with an Israeli company, Syqe Medical to distribute cannabis inhalers. Another of Syqe’s investors is the Philip Morris International PM, a tobacco giant.

Another pharmaceutical company who has invested in the medical cannabis industry is Insys Therapeutics Inc. They recently gained authorization from the FDA for the fluid form dronabinol called Syndros. It is also considered as the pharmaceutical version of THC.

Syndros can be used to treat individuals who have low appetite due to anorexia, or for patients with AIDS who are beginning to lose weight.

The drug has also been accepted and favored by cancer patients who suffer from nausea and vomiting, saying that it is better than the meds they were used to take.

What are your thoughts on big pharma entering the marijuana industry? Share them with us in the comments section below. 

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