Quebec Cannabis: Canada’s top three cannabis producers have signed a supply deal with Quebec’s liquor board, agreeing to supply the province with at least 39,000 kg of cannabis between them over a three-year period.
Specifically, Canopy Growth Corp (TSE:WEED) and Aphria Inc. (TSE:APH) have agreed to supply 12,000 kg each over three years, while Aurora Cannabis Inc. (TSE:ACB) will supply at least 5,000 kg per year with no set maximum amount. The agreements will come into effect when Canadian lawmakers pass a final vote to legalize recreational cannabis nation-wide later this year, expected to take place on June 7th.
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The three big firms make up a total of six which have agreed to supply the province with cannabis. Yet the biggest contributor of them all is set to be The Hydropothecary Corp. (CVE:THCX), which has agreed to supply Quebec with an enormous 100,000 kg of cannabis over three years, and an estimated 200,000 kg over five.
The firm, which is now the preferred supplier of cannabis for the entire province of Quebec, is the biggest gainer on the North American Marijuana Index today, currently up 10.70% to $3.93 CAD per share, bringing its market cap to $707.9M. The deal covers not just marijuana itself, but the entire Hydropothecary product range, which includes cannabis oil, capsules, and dried buds.
The deal has been placed through the Société des Alcools du Québec (SAC), a crown corporation within Quebec which overlooks the trade of alcoholic beverages in the province. It also has a subsidiary – the Société Québécoise du cannabis – which will eventually have outlets selling Quebec cannabis products.
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“Becoming the preferred supplier to the Quebec market out of the gate post-legalization is a source of great pride”, said Sebastien St-Louis, co-founder, and CEO of Hydropothecary. “This agreement marks an important step in the execution of our growth strategy.”
Meanwhile, stocks in big three firms Canopy Growth, Aphria, and Aurora all increased 1.42%, 2.63%, and 2.53% respectively on the news. The North American Marijuana Index is seeing growth for the second day running, currently up just over two points to 228.73. It marks a welcome turn to a year so far which has seen the index fall -37% since January 23rd. Analysts have penned this down to a market correction after a frenzied end to 2017 which saw the industry boom with investment.
Featured image: BNN
