Hydropothecary signs 5-year preferred supplier agreement with SAQ, for an estimated volume of 200,000kg
April 11 2018 - 9:00AM
InvestorsHub NewsWire
- Hydropothecary becomes preferred supplier to Quebec market for
a five-year term.
- Total volume estimated at more than 200,000kg over five-year
term
- Option to extend term for an additional year.
- Largest supply agreement between an authorized producer and a
provincial authority responsible for the supply of cannabis for the
adult-use recreational market.
Gatineau, QC -- InvestorsHub NewsWire -- April
11, 2018 -- The Hydropothecary Corporation
(“Hydropothecary” or the “Company”) (TSXV:THCX) (OTC:HYYDF) is pleased to
announce that it has entered into a commercial agreement with the
Société des alcools du Québec (SAQ) to be the preferred supplier of
cannabis products for the Quebec market for the first five years
post-legalization, with an option to extend the term for an
additional year.
Under the agreement, Hydropothecary will supply 20,000 kg of
products in the first year of the agreement and is expected to
supply 35,000 kg in the second year and 45,000 kg in the third. The
volumes for the final two years of the agreement will be
established at a later date based on the sales generated in the
first three years. The supply arrangement covers the full
range of the Company’s products and brands, from flowers to
cannabis oil.
In the event the volume requirements in years four and five of
the agreement amount to 49,500 kg and 54,450 kg respectively based
on an anticipated 10% growth rate in both the cannabis market and
the Company’s supply requirements under the agreement, and assuming
the mix of products supplied moves towards less flower and more
value-added products as anticipated, the Company estimates the
total volume to be supplied over the five-year term of the
agreement could exceed 203,950kg.
The SAQ has the right to terminate the agreement in certain
circumstances.
“Becoming the preferred supplier to the Quebec market out of the
gate post legalization is a source of great pride and a vote of
confidence in our ability to scale operations to meet our supply
commitment,” said Sébastien St-Louis, co-founder and CEO of
Hydropothecary. “This agreement marks an important step in the
execution of our growth strategy, which is focused initially on the
Quebec market by expanding our Gatineau facilities and hiring new
employees, and then establishing our presence in other Canadian
markets.”
“By doing business with Hydropothecary, the SAQ is engaging with
a company that complies with the law and adheres to best practices
in both corporate governance and the development and manufacturing
of high quality and safe products,” added Mr. St-Louis.
Recognizing its responsibility toward Quebec and its citizens,
Hydropothecary is committed to:
- working with the Government of Quebec, the future Société
québécoise du cannabis (SQDC), a subsidiary of the SAQ and other
partners to implement awareness campaigns promoting responsible
cannabis use; and,
- supporting research and educational programs related to the
cultivation and processing of cannabis, as well as the development
of medical and recreational cannabis products in Quebec.
Hydropothecary is currently the only cannabis producer in Quebec
to hold a license from Health Canada for the sale of cannabis.
The agreement is conditional on the adoption by the federal and
provincial governments of the necessary regulatory framework.
Conference call
Hydropothecary will host a conference call for financial
analysts and shareholders to discuss the SAQ supply agreement today
at 8:30 am EST. The dial-in number is 1-(866) 521-4909, access code
is 1776268. A replay of this call will be available afterward on
our website www.thcx.com.
About The Hydropothecary Corporation
The Hydropothecary Corporation is an authorized licensed
producer and distributor of medical cannabis licensed by Health
Canada under the Access to Cannabis for Medical Purposes
Regulations. Hydropothecary creates award-winning innovative, easy
to use and easy to understand products. Hydropothecary is rapidly
increasing its production capacity in the lead-up to recreational
adult-use cannabis. Expansion plans will result in a total of 1.3
million sq. ft. of production space, producing 108,000 kg of dried
cannabis per year, making Hydropothecary one of the largest
producers in the country. Headquartered in Quebec, Hydropothecary
is one of the lowest-cost producers in the country.
Forward-Looking Information
This press release contains forward-looking information that is
based on certain assumptions and involves known and unknown risks
and uncertainties and other factors that could cause actual events
to differ materially from current assumptions and expectations.
Examples of forward-looking information include, but are not
limited to, the Company’s estimates of product volumes to be
supplied by it under the supply agreement with the SAQ, its
assumptions regarding product mix, its assumption that the
agreement will remain in force for its full term and conditional by
governments adoption of the necessary regulatory frameworks. These
statements should not be read as assurances of future performance
or results. Such statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from those
implied by such statements, including the actual product volumes
that will be supplied by the Company under the agreement, the
Company’s ability to produce the estimated product volumes, and the
actual mix of products that will be supplied and their pricing. A
more complete discussion of the risks and uncertainties facing the
Company appears in the Company’s Annual Information Form and
continuous disclosure filings, which are available on SEDAR’s
website at www.sedar.com. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. The Company disclaims any
intention or obligation, except to the extent required by law, to
update or revise any forward-looking statements as a result of new
information or future events, or for any other reason.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Investor Relations:
Jennifer Smith
Manager of Financial Reporting and Investor Relations
1-866-438-THCX (8429)
invest@THCX.com
www.THCX.com
Media Relations:
Shawn Lyons
Media Relations
Shawn.lyons@thehydropothecary.com
Director
Adam Miron
819-639-5498