Multinational companies moving into cannabis territory

Sandoz Canada, Tilray partnership underscores market legitimacy of medical marijuana

Tilray CEO Brendan Kennedy: “we’ll continue to see cannabis companies forging partnerships with pharmaceutical companies, alcohol companies, even makers of traditional food and beverages” | Submitted

Walls between the previously separate worlds of biotechnology and medical cannabis appear to be coming down.

Sandoz Canada Inc. recently established a partnership with B.C. medical cannabis company Tilray to produce and distribute medical marijuana products. Sandoz Canada is a division of Switzerland’s Novartis (VTX:NOVN), one of the world’s largest pharmaceutical companies.

Toronto’s Tilray has its processing plant and facilities in Nanaimo, B.C., and in Enniskillen and London, Ontario. The company employs more than 240 people in four Canadian provinces and seven countries and serves patients all over the world.

Tilray CEO Brendan Kennedy said the Sandoz-Tilray partnership is one of the first major strategic deals struck between a multinational pharmaceutical company and a Canadian cannabis producer.

“Our agreement with Sandoz Canada Inc. is a major milestone on the road to legitimizing medical cannabis as conventional medicine.”

The announcement comes at what will likely be a wave of big pharmaceutical companies and cannabis companies joining forces to further legitimize the drug’s medical market and standardize products.

“We’re in the midst of a paradigm shift. Globally, cannabis is a $150 billion industry that’s currently transitioning from the black market to a legalized and regulated market, not just in Canada, but around the world,” said Kennedy.

“In the future, we’ll continue to see cannabis companies forging partnerships with pharmaceutical companies, alcohol companies, even makers of traditional food and beverages.”

Industry professionals agree that this kind of partnership is overdue.

“It’s almost as if there has been this research room in the pharmaceutical companies and the door has been closed for 100 years,” said Chris Wagner, CEO of medical cannabis company Emerald Health Botanicals.

“That’s about how long cannabis has been illegal. You couldn’t go into the room, but everybody knows that there is something really interesting in there and now the doors have opened.”

But Wagner is careful to point out that biotechnology and pharmaceutical companies should be differentiated.

Once a biotech company has caught the attention of a big pharmaceutical company, the pharmaceutical company provides the infusion of capital to ensure the product works and gets to market. And for partnering companies in B.C. cannabis, that market should largely be considered global as opposed to just local.

“Canada is small; we are a tiny country, so the partnerships they are planning to do here in Canada … they need to ensure they do not affect [international companies’] business anywhere else in the world where cannabis is not viewed in the same light that Canada looks at it – the U.S. being a good example.”

But products also need to be produced for the global market, even though other nations might have far more restrictive cannabis regulations.

“The barrier is fitting what we are currently doing in cannabis into the pharmaceutical company’s business model, which is really protected, global products,” said Kennedy. “We have a tendency as Canadians and as Canadian companies to think of only Canada, and that’s really not the right way to think about it.”

Terry Roycroft, CEO of Medicinal Cannabis Resource Centre Inc. said the key is to get products to market.

“Products have got to get out there, salespeople have to be out there. They have to talk to the doctors and let them know what the benefits are and why they should be prescribing this, and I think that’s going to take time. Getting doctors trained to the level that there is actually a product that they can prescribe to an individual, because when it goes through the pharmacies, the doctors have to do a prescription and they can’t prescribe, say, cannabis in general.

“They can prescribe three grams per day and [patients] can get the flower, but they have to understand the products available so they can make appropriate product suggestion.”

Kennedy added that linking the established industry with its emerging counterpart will help rebrand the image of cannabis nationally and globally.

“Partnering with pharmaceutical companies reinforces that cannabis is a mainstream medicine, which we also hope will pave the way for other positive changes for patients such as insurance company coverage and zero-rating. More interest from pharmaceutical companies in medical cannabis could also help facilitate further clinical research.”