Hydropothecary stock pops
On April 11, Hydropothecary (HYYDF) stock surged 13.2% after it became the SAQ’s (Société des alcools du Québec) preferred non-medical cannabis supplier once non-medical cannabis becomes legal in Canada.
The company’s press release stated that the agreement term extends to the first five years following legalization and has an option to extend for another year. The total supply volume is expected to reach over 203,950 kg (kilograms), according to the company. The company stated that it will supply 20,000 kg in the first year, followed by 35,000 kg and 45,000 kg in the second and the third years. The supply amount for the remaining two years is yet to be determined.
While this news helped the company’s stock rise 13% yesterday, it remains in the negative return territory with a YTD (year-to-date) loss of ~10% at 4.02 Canadian dollars. However, the company has managed to perform better than the Horizons Marijuana Life Science ETF (HMMJ), which has delivered losses of 28%.
Five other companies also signed a similar agreement with SAQ on April 11. These companies include Canopy Growth (WEED), Aphria (APHQF), Aurora Cannabis (ACB) (ACBFF), MedReleaf (MEDFF), and Tillray Canada, which is not a publicly traded company. While Hydropothecary signed a five-year agreement with SAQ, most of them have agreements for three years.
In the next article, we’ll discuss how these stocks reacted to the news.