Gatineau marijuana grower Hydropothecary raises $20M for expansion

Pot

Less than a week after Health Canada removed limits on how much pot it could produce, Gatineau-based Hydropothecary (TSX-V:THCX) says it’s raising $20 million in new financing.

The firm said Tuesday that it had entered into an agreement with its longtime financing partner, Canaccord Genuity Corp., and a syndicate of underwriters to raise the money via a private placement.

Last week, Health Canada approved two new buildings at Hydropothecary’s Gatineau facilities and granted the pot producer a licence renewal to grow and sell as much cannabis as it can store.

A Hydropothecary spokesperson said Tuesday that the loosened restrictions signal a major move on the part of Health Canada to fast-track industry expansion ahead of the federal government’s plans to legalize marijuana for recreational use by July 2018.

The move came as Ontario Finance Minister Charles Sousa was quoted as saying that he expects a shortage of marijuana when it’s legalized, echoing previous comments by financial analysts.

Hydropothecary’s stock price was down 9.5 per cent, or 15 cents per share, to $1.43 in late-afternoon trading on the TSX Venture Exchange.