As The Hydropothecary Corporation (TSXV:THCX) embarks on its massive expansion the deal with Shopify Inc. (TSX:SHOP) strengthens its online distribution capabilities
SmallCapPower | March 26, 2018: The Hydropothecary Corporation (TSXV:THCX) Tuesday announced that it has chosen Shopify Inc. (NYSE:SHOP) (TSX:SHOP), an eCommerce giant with 600,000 merchants and gross merchandise volume exceeding $26.0 billion, to develop its eCommerce platform for selling cannabis online. This is the second cannabis deal for Shopify. Last month, the Ontario government, through The Ontario Cannabis Retail Corporation (OCRC), signed a deal to use Shopify eCommerce platform for recreational cannabis sales online and in stores.
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Leveraging Shopify’s expertise in providing secure and flexible eCommerce websites, the bilingual website will improve the shopping experience for Hydropothecary’s medical customers by automating the medical registration and ordering process. The website will also provide information to discerning recreational consumers as well as support engagement with provincial cannabis retailers.
As Hydropothecary embarks on its massive expansion with total cannabis capacity exceeding 100,000 kgs per annum by 2018 year end, the deal with Shopify strengthens its online distribution capabilities. Cannibis companies in Canada continue to focus on expanding distribution capabilities, with several players including Aphria, Aurora, MedReleaf and Tilray striking deals with pharmacy chains for online distribution (current regulations prohibit in-store sales in retail pharmacies) of medical cannabis.
Hydropothecary CEO Sebastien St-Louis remarked, “Shopify is a great fit for our business, providing an ideal way for customers to learn, browse and buy. As we move into new markets, Shopify’s platform allows us to provide informed and engaging online experiences to new consumers, while giving us the flexibility to adapt to regulatory challenges and market variations from province to province.”
Loren Padelford, VP of Shopify, said, “We are excited to work with an industry leader like Hydropothecary to deliver another innovative eCommerce solution to the Canadian cannabis market. The Shopify platform will allow Hydropothecary to rapidly capitalize on the emerging opportunities in medical and recreational cannabis in a safe, secure, and reliable way.”
Headquartered in Quebec, Hydropothecary is a premium and diversified producer of cannabis, offering over 20 medical cannabis products including Elixir, the first and only cannabis peppermint oil sublingual mist. The Company also boasts of one of industry’s lowest costs at $0.89, aided by its location in Quebec, which has low utility rates, reduction in hydro consumption due to natural sunlight growing, and centralized location. Hydropothecary currently trades at a market cap of $750 million.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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