Nova Scotia Liquor Corporation announced this week that they entered into supply agreements with several cannabis companies including Supreme Cannabis Company, Inc. (TSXV:FIRE) (OTC:SPRWF), Aphria Inc. (TSX:APH), WeedMD Inc. (TSXV:WMD) (OTC:WDDMF), and Organigram Holdings Inc. (TSXV:OGI) (OTCQB:OGRMF).
The news is another boon to the marijuana stock market, which has been steadily climbing since the announcement of similar deals signed in Ontario. While in many provinces and territories these organizations will, in most cases, be the only retailers of recreational marijuana when it becomes legal, Ontario will allow private brick-and-mortar stores to operate beginning next year.
In total, Novia Scotia placed orders with 14 cannabis vendors in preparation for the launch of recreational marijuana sales on October 17. According to a statement at least two come from the Atlantic region, and one is a cannabis accessory vendor.
“We have done our homework and believe the 78 strains we have ordered will provide customers with a varied product assortment,” said Bret Mitchell, the President and CEO of Novia Scotia’s government-led cannabis retailer. “We have carefully selected the strains and will adjust our inventory based on customer preference.”
Approximately 3.75 million grams of cannabis will be available for purchase initially, with the retailer expecting to order over 15 million by year’s end.
Supreme Cannabis and 7ACRES to supply Novia Scotia
The Supreme Cannabis Company, Inc. announced that their wholly owned subsidiary, 7ACRES, entered into supply agreements with both the Nova Scotia Liquor Corporation and the Prince Edward Island Cannabis Management Corporation. According to a statement, the agreement allows the company to supply recreational cannabis to their respective retail stores when marijuana officially becomes legal in Canada on October 17.
The company secured agreements with provincial recreational partners in Ontario, British Columbia, Alberta, and Manitoba putting it on the same level as other Licensed Producers including Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), Aphria, Aurora Cannabis Inc. (TSX:ACB), Tilray (NASDAQ:TLRY), and Organigram.
In a statement, Supreme noted how the agreement extends their reach into the Canadian cannabis market.
"We are excited to finalize these agreements with the provinces of Nova Scotia and Prince Edward Island," said John Fowler, CEO of Supreme Cannabis in a statement released yesterday. "We expect to be one of Canada's few producers who will be in stores coast-to-coast when the Canadian recreational market kicks off on October 17th, and the only major producer to be listing exclusively as a premium offering."
Aphria’s Nova Scotia supply agreement makes eight for the company
Licensed Producer Aphria Inc., the third largest cannabis company in Canada also announced that a supply agreement was made with the provincial group, bringing them to eight total across the country. Their current supply agreement count includes the six provinces where Supreme has agreements as well as New Brunswick and the Yukon territories.
"Today the NLSC has ensured that Nova Scotia's adult-use consumers will have access to our thoughtfully developed brands and products come October 17," said Jakob Ripshtein, Chief Commercial Officer at Aphria in a statement. "We are seeing tremendous momentum as provincial liquor boards and cannabis authorities across the country continue to respond favourably to our extensive range of product offerings. Each of our brands have been carefully developed to meet the needs and interest of distinct consumer segments, and we look forward to ensuring an ample supply is available to consumers in Nova Scotia and across the country."
In May, Aphria announced a partnership with Great North Distributors, Inc. a wholly-owned Canadian subsidiary of Southern Glazer’s Wine & Spirits. Serving 44 states, Canada, and the Caribbean, Southern Glazer is the largest alcohol distributor in North America. Through this partnership, Great North Distributors will be an exclusive manufacturer’s representative for Aphria’s adult-use cannabis products.
This partnership is the first of its kind according to Doug Wieland, Executive Vice President, and General Manager, Southern Glazer's Wine & Spirits Canada. In the announcement, Wieland said, [o]ur decision to become the first beverage alcohol distributor to facilitate the legal distribution of cannabis in Canada reinforces our innovative, first-mover position in the industry. We are thrilled to partner with cannabis industry leader Aphria, and to leverage our experience and expertise to ensure the efficient, legal, and safe distribution of cannabis in Canada.”
Marijuana stocks are on the rise
Earlier this week WeedMD and Organigram Holdings Inc. announced their own respective supply agreements with Nova Scotia Liquor Corporation. In a statement, WeedMD explained that the agreement allows the company to work with the corporation’s 12 retailers as well as online. The company currently has supply agreements in place in Alberta and British Columbia.
Organigam’s agreement allows customers in the province access to almost all of the company’s inventory. In a statement Tim Emberg, Vice President of Sales and Commercial Operations for Organigram explained that the company would provide a variety of products to the retailer.
"We are proud to have been recognized and approved by NSLC," says Tim Emberg, Vice President of Sales and Commercial Operations, Organigram. "Under the terms of the agreement, Organigram will provide NSLC with 41 SKUs from our overall product mix, which will essentially offer Nova Scotians access to almost 100 percent of our total product offerings."
The recent spate of supply agreements sent marijuana stocks on an upward trajectory in recent days. For example, last week when Tilray’s stock jumped 8.8 percent. Canopy Growth, who also entered into a supply agreement with Ontario Cannabis Store, saw a small increase in their stock as well. The North American Marijuana Index gained 27 points over the last few days following these recent announcements.
*Photo: Nova Scotia Liquor Corporation