Hydropothecary Set to Ramp Up Cannabis Production

The Hydropothecary Corporation (TSX:HEXO) has 10 zones planned, all of which are expected to be operational by August 2018

SmallCapPower | June 29, 2018: The Hydropothecary Corporation (TSX:HEXO) Tuesday announced that it received licensing for two additional zones in its 250,000 sq. ft. greenhouse expansion at Gatineau, Quebec, taking the total licensed zones to four of the total 10 zones planned. The remaining six zones will be completed in the coming weeks and all 10 zones are expected to be operational by August 2018.

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Hydropothecary currently operates a 50,000 sq ft facility at Gatineau, Quebec with a production capacity of 3,600 kgs per year. The Company broke ground on the 250,000 sq. ft. greenhouse complex at the same facility in October 2017, which will increase the total production capacity to 25,000 kgs per year. The capacity expansion will allow Hydropothecary to fulfill its first year supply commitment of 20,000 kgs of cannabis products for the recreational market as part of its preferred supply agreement with the Société des alcools du Québec (SAQ) in April 2018. To meet the total volume of more than 200,000 kgs over the five-year term as per the SAQ agreement, Hydropothecary plans to increase its total capacity to over 100,000 kgs per year of dried cannabis by constructing a new 1.0 million sq. ft. greenhouse on the newly-acquired 78 acres of land adjacent to its existing 65 acre Gatineau facility.

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Following the SAQ agreement and in preparation for the upcoming recreational legalization in Canada, the Company launched a new brand, ‘HEXO’, last month and received approval from the TSX to graduate from the TSXV on June 21, 2018 and began trading under the new ticker ‘HEXO’ from June 25, 2018. Hydropothecary currently trades at a market cap of $941 million.

Disclosure: Neither the author nor his family own shares in the company mentioned above.

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