Gatineau-based company inks major cannabis supply deal with SAQ

Quebec's liquor board, the SAQ, has made it official with six Canadian cannabis suppliers, signing contracts to provide the province's legal recreational market with thousands of kilograms of marijuana products.

The companies will supply the Socit qubcoise du cannabisoutlets, SAQ subsidiaries that will eventually sell marijuana, with58,000 kilograms in the first year.

Hydropothecary, the only Quebec-based company of the six, inked the biggest contract. Over five years, the company estimates it could supply more than 203,000 kilograms of cannabis products.

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It will provide 20,000 kilograms in the first year of the agreement, 35,000 in the second and 45,000 in the third. The volumes for the final two years will be based on the sales generated in the first three years.

The value of the contracts was not disclosed.

Prioritizing companies with Quebec presence

TheSAQsays the finalized agreements are expected to fulfilthe demand for the first wave of retail store openings, and that other calls for tender may occur at a later date.

The hope is to prioritize doing business with producers that have a presence in Quebec.

The five other companies whose contracts have been finalized are:

• Canopy Growth (12,000 kg).
• MedReleaf (8,000 Kg).
• Aphria (8,000 kg).
• Aurora Cannabis (5,000 kg).
• High Park (Tilray) (5,000 kg).

Canopy Growth, based in Smith Falls, Ont., and Edmonton's Aurora Cannabis have operations in Valleyfield, Mirabel and Saint-Lucien, Que. All six producers already had Health Canada authorizationto produce therapeutic cannabis.

The contracts are contingent upon the adoption of the necessary regulatory frameworkby the federal and provincial governments.

The federal legislation is still stuck in the Senate, and itwill take eightto 12 weeks to get the retail system up and running after that legislation receives royal assent, meaning legal cannabis productslikely won't be for sale before early August.

Bill 157, which would legalize recreational cannabis in Quebec and formally create theSocitqubcoisedu cannabisoutlets, has yet to pass.