On March 05, 2018 The Hydropothecary Corporation (TSX-V:THCX) announced that it had signed a letter of intent to supply its home province of Quebec with 20,000 kilograms of cannabis products in the first year of legalization. It is the largest supply agreement announced in Canada to date, and the company says it is just the beginning.
Quebec has opted for a public distribution model and has tasked the Société des alcools du Québec (SAQ) with setting up the public corporation responsible for cannabis retail and distribution, the
Société Québecoise du Cannabis (SQdC). The SQdC will be the only cannabis retailer in the province, operating from both physical locations
and an online store.
With Quebec expecting to sell just under 58,000 kg of cannabis in the first year of legalization, Hydropothecary’s letter of intent for 20,000 kg represents 35% of projected market demand in the province. In total, the SAQ has signed supply agreements with six licensed producers, although Hydropothecary’s order outstrips those of the other companies, including Canopy Growth Corp. at 12,000kg, Aurora Cannabis Inc. at 5,000kg and Aphria at 8,000kg.
Hydropothecary is seeking to strongly establish itself in its home-province of Quebec before moving outward and is continuing its expansion plans which currently include finishing a 250,000 sq. ft. greenhouse as well as constructing an additional 1 million sq. ft. facility. By the end of the year, the company should be able to grow and process 108,000 kg/year of cannabis products and, according to Hydropothecary sources, the company has been participating in meetings with the Ontario Cannabis Retail Corporation (OCRC) to
supply the neighboring province’s recreational market.