Ramping up production from 3,600 kg of dried cannabis up to 108,000 kg by the end of the year is the name of the game for Gatineau, Quebec’s The Hydropothecary Corporation (TSXV:THCX), and although its quarterly revenue came in lighter than expected, the company’s expansion plans remain on schedule, says Russell Stanley, analyst with Echelon Wealth Partners, who on Wednesday reiterated his “Speculative Buy” rating for THCX and one-year target price of $5.50.
The Hydropothecary Corp. delivered its three- and six-months ended January 31, 2018, financial results on Wednesday, reporting sales of medical cannabis up nine per cent over last quarter and up 45 per cent year-over-year. Its big news over the past month, however, was lining up to be the largest cannabis supplier to the province of Quebec’s retailer, the SQC, with negotiations still in progress on securing a definitive agreement.
“We have achieved excellent revenue visibility as we approach the legalization of recreational cannabis, with the 20,000 kg supply commitment under our letter of intent (LOI) with SAQ and our medical cannabis sales,” says Sébastien St-Louis, CEO and co-founder, in a press release.
“Predictable revenue streams from the recreational and medical markets, a debt-free balance sheet, two fully-funded expansion projects, and additional liquidity for corporate purposes, provide strong business certainty through Year 1 post-legalization and