Novartis embraces the cannabis business

Novartis, through its generic drug arm Sandoz, has signed an agreement with Tilray Canada to distribute medical cannabis products in countries where it is—or will be—legal.

Although a handful of alcohol and tobacco companies have announced partnerships in the growing cannabis industry, Novartis is the first pharmaceutical firm to publicly experiment with it.

British Columbia-based Tilray founded its medical cannabis business in 2014 and also sells recreational cannabis in Canada. It is the only marijuana producer to go public on the NASDAQ stock exchange.

The agreement expands significantly on a letter of intent the two firms signed in March to make Tilray Novartis’ supplier of nonsmokable medical cannabis products in Canada. At the time, the companies also agreed to develop new products together.

The expanded agreement allows Sandoz to commercialize Tilray’s nonsmokable products globally, to cobrand products, and to promote the products to pharmacists and physicians. Financial terms were not disclosed.

Tilray says it has made investments to ensure that its cannabis products are of pharmaceutical quality. It has a license under Canada’s access to cannabis for medical purposes (ACMP) regulation and has facilities certified for good manufacturing practices.

Tilray sells products in 12 countries including Australia, Germany, and South Africa. It has production facilities in Canada and Portugal. Currently, 35 countries have legalized medical use of marijuana.

Tilray’s products include cannabis oil extracts and purified products. It offers products high in tetrahydrocannabinol, the psychoactive cannabinoid in the marijuana plant; cannabidiol, a nonpsychoactive component; and blends of the two compounds.

While the US does not have a federal law allowing broad use of medical marijuana, in June the Food and Drug Administration approved Epidiolex, made from cannabidiol derived from the marijuana plant. Tilray has received approval to export its products to the US for clinical trials, including a study at the University of California, San Diego, that will evaluate cannabis for controlling essential tremor.