The Hydropothecary Corp.’s share price closed up 13 per cent Wednesday after the company said it had struck a cannabis supply deal with the Societe des alcools du Quebec.
The Gatineau, Que.-based company says the deal has it set to supply upwards of 200 tonnes of cannabis products over five years to the provincial Crown corporation.
The company says the deal, which sent its share price up 17 per cent earlier in the day on the TSX Venture Exchange, is the largest supply agreement between a producer and a provincial supplier for recreational cannabis.
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The deal sees Hydropothecary supplying 20,000 kilograms in the first year, then ramping up to 35,000 kilograms in the second and 45,000 kilograms in the third with the final two years yet to be determined. The contract could be extended for another year.
Chief executive Sebastien St-Louis says the deal is an important step in Hydropothecary’s growth strategy of focusing on Quebec before expanding capacity to serve other Canadian markets.
Hydropothecary says it’s the only cannabis producer in Quebec with a licence to sell from Health Canada.