Europe is in position to grow into the largest cannabis market in the world in the next four years. Cannabis companies with an early presence in Europe’s high-growth cannabis industry are in position to capitalize.
Today I am going to reveal an early cannabis industry leader out of Canada that just became one of the first companies to import medical cannabis into Germany – giving it a valuable first-mover advantage over the competition.
With a population that is twice the size of the US and Canada, many industry-leading research firms are predicting that Europe will grow into the largest cannabis market in the world in the next four years.
- The Brightfield Group estimates that legal medical cannabis sales in Germany will reach $2.7 billion by 2023.
- Prohibition Partners predict Europe’s cannabis industry could be worth 116 billion by 2028.
This explosive wave of growth is creating a great opportunity. Leading cannabis companies will have an opportunity to ride a huge wave of growth in the next four years.
Tilray (TLRY) Is in Excellent Position
Tilray (TLRY) is one of the largest cannabis companies in North America with a market value of $2 billion. Headquartered in British Columbia, Tilray listed on the US-based NASDAQ exchange last year and became the first Canadian cannabis producer to list directly on a US exchange.
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As one of the most international cannabis companies in the industry, Tilray is a direct play on the European cannabis market.
Its largest presence is in Canada, but Tilray already operates all across the world, including the US, Europe, South America, Africa, and Australia.
Take a look below at Tilray’s international markets.
Tilray made big news when it announced a multi-million dollar deal to begin importing cannabis into Germany.
Here are some more details from the press release.
Tilray, Inc. today announced it has entered into an agreement with Cannamedical Pharma GmbH (“Cannamedical”) through its wholly-owned subsidiary Tilray Portugal Unipessoal Lda. (“Tilray Portugal”), to export a wholesale shipment of $3.3 (€3) million worth of medical cannabis from Portugal to Germany. The shipment, which is expected to be completed in fall 2019, will be Tilray’s first from its state-of-the-art EU campus in Portugal to supply patients in Germany.
“This is a significant milestone for Tilray as we ramp up our capacity to serve international markets and generate revenue from our EU campus through the end of 2019,” says Tilray CEO Brendan Kennedy. “We believe our 2.5 million square feet of cultivation and state-of-the-art processing space in Europe is an important differentiator, which will enable us to reduce costs and improve margins while hedging against regulatory risk.”
Founded in 2016 in Cologne, Germany, Cannamedical is fully licensed and GDP-certified (Good Distribution Practice) to import and distribute high quality medical cannabis products. The privately owned company is a leading independent supplier of medical cannabis products to 2,500 pharmacies and clinical facilities across Germany.
This is a big win for Tilray. It expands the company’s presence in high-growth Germany and Europe. And it also gives Tilray a valuable first-mover advantage over the competition. Moving forward, I expect Tilray to continue building on these supply deals and grow its presence in Europe.
Tilray Just hit a New 2019 Low
Tilray has been volatile since shares began trading on the NASDAQ in July 2018.
Shares rallied big last summer. But after hitting a new all-time high in September, shares have been falling with the broader cannabis sector.
Shares recently hit a new 2019 low. I don’t view this weakness as a signal that this company is a failure. Shares were overvalued last year and this kind of extreme volatility is common in the cannabis sector.
Long term, I expect Tilray to grow revenue and earnings and shares to stabilize and once again begin trending higher.
Take a look at the chart below.
The Big Picture on Europe and Tilray
Europe is projected to grow into one of the largest cannabis markets in the world in four years.
Tilray is an early cannabis industry leader. The company is already one of the most international companies in the industry, and recently expanded further into Europe.
Tilray looks well-positioned to benefit from growth in Europe’s young cannabis industry.
Disclosure: Michael Vodicka does not own shares Tilray, Inc. (TLRY) at the time of this writing.
About the Author & Cannabis Stock Trades
Michael Vodicka is an equity analyst with more than 20 years of experience in trading and investing. His research has been featured in some of the industry’s most respected publications. He has been investing and leading investors in the cannabis sector since 2013.
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