Hexo Supply Agreement Quebec
Quebec-based HeXO, which management said had 108,000 kilograms of maximum annual production on track, announced that it would provide a total of 200,000 kilograms in Quebec over five years, with Quebec retaining the right to an option for a six-year year. As cannabis production gradually increases each year, the agreement has allocated about 40% of HEXO`s planned production by the end of 2023. This agreement has made HEXO the most vulnerable company of all major marijuana producers, as much of its annual production would be talked about over the next decade. “Becoming the preferred supplier to the Quebec market after legalization is a source of great pride and a vote of confidence in our ability to scale up operations to fulfill our delivery obligation,” said Sébastien St-Louis, co-founder and CEO of Hydropothecary. “This agreement is an important step in the implementation of our growth strategy, which focuses first on the Quebec market, expanding our Gatineau facilities, hiring new employees, and then establishing our presence in other Canadian markets.” In the event that the volume requirements for the four and five years of the agreement amount to 49,500 kg and 54,450 kg respectively, based on an expected growth rate of 10% in the cannabis market and on the company`s supply needs under the agreement, and which, as expected, shift the mix of products delivered to less floral and value-added products. , believes the company. that the total volume to be delivered over a five-year period of the agreement could exceed 203,950 kg. HEXO`s 1Q MD-A reports that the company has entered into an agreement with the SQDC for the delivery of 200,000 kg for 5 years. I understand that for the five-year period, the total amount of supply agreed upon was 200,000 kg, or 40,000 kg per year. I found it in the following article, which says “make 200,000 kg of pot a year available.” In addition, HEXO has obtained accreditation from the Financial Markets Authority to enter into contracts with government organizations such as the SQDC.
This is a permit required for companies that have more than $1 million in business with the Quebec government for both services and product supply. This press release contains forward-looking information based on specific assumptions, including known and unknown risks and uncertainties, as well as other factors that could lead to actual events significantly different from current assumptions and expectations. For example, forward-looking information is the company`s estimates of the quantities of products it must provide under the supply agreement with the SAQ, its product range assumptions, the assumption that the agreement will remain in effect for its duration and will be subordinated by governments that apply the necessary regulatory framework.