Tilray’s (TLRY) stock made strong gains early Wednesday after the Canadian marijuana giant said its European arm had a very successful cannabis harvest. A statement from the company said Tilray Portugal Unipessoal completed the harvest of medical cannabis at its cultivation site in Portugal. The advanced facility, which has been developed with investments of more than EUR 20 million, also functions as a base for the company’s clinical research programs in Europe.
Tilray is a rare stock that received the top rating from almost all the analysts covering it. The consensus recommendation has been strong buy for quite some time, making the stock one of the most sought after investment options. The average price target is $90.
The rating reflects the positive outlook for the cannabis industry that is growing at a rapid pace, boosted by the strategic buyout deals and partnerships among the top players. The increasing acceptance of medical cannabis across global markets and the fast adoption of pot-based medicines as a replacement to conventional treatments brighten Tilray’s near-term prospects further.
The company’s tie-up with drug maker Novartis (NVS) gives it an advantage over rivals when it comes to taking forward the research activities in marijuana-based formulations for medical treatment. While the association helps in removing the taboo surrounding cannabis, it also adds momentum to Tilray’s near-term growth initiatives in the areas of production, cultivation, and distribution.
The company has clinched close to half-a-dozen buyout deals since the beginning of 2019. That the sector is bracing for a consolidation spree indicates that early players like Tilray could reinforce their market-leader status in the long run.
Also See: Tilray to report Q4 earnings on March 18
In the latest of the M&A deals, which also marked its entry into the food and drinks market, the Canadian firm last month acquired hemp food company Manitoba Harvest. One of the main attractions of the multi-million dollar deal is Manitoba’s extensive distribution network that complements Tilray’s future plans.
Tilray shares have maintained a steady momentum after descending from their peak in September last year. The stock made some sharp gains and crossed the $100-mark early this year. It moved up about 5% in early trading Wednesday but pared the gains as the session progressed.