The Quebec-based Hydropothecary Corporation is eyeing the U.S. legal cannabis market as it ramps up production ahead of legal recreational marijuana this October, the company’s CEO told BNN Bloomberg.
Hydropothecary’s (HEXO.TO) CEO Sebastien St-Louis told BNN Bloomberg in a phone interview that the company expects revenue to skyrocket once marijuana is legalized in October. And, while the Quebec market is expected to generate north of $100 million in sales in its first year of legalization, St-Louis sees a bigger opportunity for Hydropothecary south of the border.
“Our belief is the medical market will pale in comparison to adult use,” St-Louis said.
He sees Hydropothecary supplying the legal U.S. market with products like elixirs, edible powders and water-soluble cannabis drinks with a formal announcement expected by the end of the year. That focus comes as St-Louis expects to see a “massive devaluation of cannabinoids” in the market, making the consumer packaged goods segment more attractive from a gross margin basis.
However, it is unclear yet how Hydropothecary will be able to sell its products in the U.S. without running afoul of recent rules announced by the Toronto Stock Exchange stating a cannabis company listed on the bourse can’t do any business or have operations in the U.S., where marijuana remains illegal under federal law.
St-Louis declined to provide specifics on how