Quebec Inks Deals with Six Canadian LPs Promising To Provide 62 Tons of Marijuana

Six Canadian licensed producers (LPs) of marijuana have each announced the signing of letters of intent with the Canadian province of Quebec to supply cannabis and related products for the province’s recreational marijuana market once it becomes legal, possibly sometime next summer.

The agreements were made with government-owned alcohol retailer, the SAQ. The Société Québécoise du Cannabis (SQC), which will eventually oversee the sale of legalized marijuana, does not yet exist as a legal entity.

The news comes just as the Ottawa-based e-commerce platform, Shopify, announced a deal with the Ontario government to manage both online and in-store sales. The provinces expect 15 cannabis outlets are going online when the market launches.

Bills Are Yet To Pass

Quebec has yet to pass a bill which would legalize recreational cannabis in the province. Meanwhile, federal legislation is still being debated in the Senate. For sales to commence, both bills must pass. But plans must start being laid down now for Quebec to be prepared when the market launches.

"We've got to move," said Public Health Minister Lucie Charlebois. "We've got to be ready when it's going to be legal."

Opposition To The Plan

Many politicians and Quebec producers are opposed to the province's plans, claiming they do little to help local businesses. Although more than half of the 62,000 kilograms on order involve companies with Quebec connections, five of the six LPs are based outside the province.

Below are some of the details on the LPs and their agreements:

Canopy Growth Corporation

Canopy Growth Corporation (TSX:WEED) has agreed to provide the Quebec market with 12,000 kilos of high-quality cannabis annually.

The Company now boasts more supply commitments than any other licensed producer in the country. It is Canopy Growth's fourth and most abundant supply agreement to-date, following previous agreements with the Provinces of New Brunswick, Newfoundland and Labrador, and Prince Edward Island.

Canopy Growth has established a significant presence in Québec with the acquisition of Vert Cannabis in Saint Lucien, Québec, and the recent introduction of Vert Mirabel, a Joint Venture with Les Serres Stéphane Bertrand Inc., a large-scale tomato greenhouse operator in Mirabel, Québec.

We've made major investments in the Province of Québec and feel honoured to be chosen to supply the country's second-largest province, and a region we call home, with our wide variety of cannabis products. Signing this letter of intent with SAQ further establishes our dedication to the region and our level of commitment to providing adult consumers in Québec with safe, high-quality cannabis. - Mark Zekulin, President, Canopy Growth

MedReleaf Corp.

MedReleaf Corp. (TSX:LEAF), Canada's first and only ISO 9001 and ICH-GMP certified LP has agreed to supply Quebec with 8,000 kilograms of cannabis products per year.  

At the voter-driven 2017 Lift Canadian Cannabis Awards, MedReleaf led the industry by winning LP of the year and placing in 10 different categories, including first place awards in several product categories: Top Indica Flower, Top CBD Flower, Top High THC Flower, and Top High CBD Oil.

We are proud to be working with SAQ, one of the largest purchasers of alcohol in the world, to ensure the safe, reliable, and responsible distribution of adult-use cannabis. Our capacity expansion in Bradford is on track, and we look forward to delivering an assortment of our award-winning cannabis products and brands to the Province of Quebec in the first year of this agreement. - Neil Closner, CEO of MedReleaf

Aurora Cannabis Inc.

Aurora Cannabis Inc. (TSX:ACB) (OTCQB:ACBFF) (Frankfurt: 21P; WKN: A1C4WM) will supply a minimum of 5,000 kg of cannabis per annum per their agreement.

Supply quantities will be determined based on demand on month by month basis, with a minimum of 5,000 for the first year, but no set maximum.

This LOI is significant in terms of product volume, and an essential step in our commercial development. It also reflects our strong commitment to the Quebec market, where we have two production facilities, as well as access to significant additional supply through our partnership with The Green Organic Dutchman, once their Valleyfield facility is completed. We are pleased to be working closely with the SAQ, and look forward to becoming a key supplier of Canada's second most populous province with more than eight million people. - Terry Booth, CEO of Aurora

Aphria Inc.

Aphria Inc. (TSX:APH) USOTC:APHQF) is guaranteeing a supply up to 12,000 kg of cannabis products in the first year, including cannabis oils and other derivative products and several strains of dried cannabis flower.

We're thrilled to partner with the SAQ to supply the Quebec adult-use market with a variety of high-quality, safe and pure cannabis products," said. Aphria is uniquely positioned to meet the anticipated demand in Canada's second-largest market and we are pleased to be working closely with the SAQ and its management team as one of the first suppliers to the province. - Vic Neufeld, Chief Executive Officer of Aphria  

The Hydropothecary Corporation

The Hydropothecary Corporation (TSX VENTURE:THCX) will supply 20,000 kg of cannabis products in the first year of adult-use recreational cannabis. The LOI covers the full range of the Company’s products and brands, from H2 and Time of Day (flower) to Elixir (sub-lingual oil spray) to Decarb (powder).

The Company claims it is on track to complete previously announced facility expansions which will increase annual production capacity to 108,000 kg of dried cannabis, making the company one of Canada’s largest producers.

This supply arrangement is an essential step for Hydropothecary. We are honoured by the opportunity to supply cannabis in our home province and we want Quebecers to know that we are committed to providing safe and high-quality products for the adult-use recreational market. Excited as we are about this significant breakthrough in the adult-use recreational market, we will continue to serve the Canadian medical market and the thousands of Canadians who count on us for their cannabis products. -  Sebastien St-Louis, CEO of The Hydropothecary Corporation

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