Tilray (TLRY - Get Report) shares were rising Wednesday after the company announced it signed an initial supply agreement to deliver medical cannabis to a German distributor with product sourced from its new grow house in Portugal.
The $3.3 million distribution deal is the first that is tied to the company's operations out of Portugal.
"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," said 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."
The deal is with Cannamedical, a medical cannabis importer that is based in Cologne, Germany.
"We are pleased to enter into an agreement with a partner who shares Tilray's commitment to product quality and safety and patient access," said Sascha Mielcarek, Tilray's managing director, Europe. "This initial shipment will be the first of many from our EU Campus in Portugal to Germany as well as other European and international markets."
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