TORONTO — Cannabis company The Hydropothecary Corp. has signed a “commercial agreement” with the Société des alcools du Québec to supply an estimated 200,000 kilograms of marijuana to the province’s recreational market over five years.
“This is transformational,” said Hydropothecary chief executive Sebastien St-Louis. “This is over $1 billion in forward revenue over five years.”
The agreement, which is the largest publicly announced legal marijuana deal to date, will see Hydropothecary supply the SAQ with 20,000 kilograms in the first year of legal recreational use. That will increase to 35,000 kilograms in the second year and 45,000 in the third year, the company said in a press release.
The size of the deal in the fourth and fifth year is yet to be finalized. Hydropothecary estimates an annual 10 per cent growth in demand, meaning roughly 50,000 and 55,000 kilograms in years four and five. There’s an option to extend the agreement for a sixth year.
Five other companies announced smaller three-year deals with the SAQ on Wednesday.
Aphria Inc. will supply up to 12,000 kilograms a year for three years, the company said. Canopy Growth Corp. likewise announced an annual 12,000 kilogram three-year supply agreement.
MedReleaf Corp. will supply the SAQ “with 8,000 kilograms of cannabis products per year with a minimum three-year term,” the company said. Tilray