Tilray's High Park Strikes New Supply Agreement With Zenabis Global

Canada-listed cultivator of medical and recreational cannabis company Zenabis Global said Tuesday it entered into a new supply agreement with Tilray Inc TLRY.

What To Know

Zenabis LTD, a wholly-owned subsidiary of Zenabis Global, said it entered into an agreement with High Park Holdings, a fully-owned subsidiary of Tilray. As part of the agreement, High Park will advance CA$30 million ($22.8 million USD) to Zenabis in return for a supply of dried cannabis.

Zenabis said it doesn't expect the new agreement to have any impact on existing customers.

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Why It's Important

Zenabis CEO Andrew Grieve said the new agreement "significantly reduces" the potential for the company to withdraw capital from its $60 million unsecured convertible debenture facility. He also said the agreement validates its ability to produce consistent and premium cannabis products.

Zenabis will deliver each month dried cannabis to High Park with the first delivery scheduled for October. The prepaid amount will vary as it is dependent on the product type and format High Park orders.

Zenabis Global's Toronto-listed stock was higher by more than 10%, while Tilray shares traded lower by 2.6% to $48 at time of publication.

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