Newstrike Brands Ltd.’s (TSXV:HIP) wholly-owned subsidiary, Up Cannabis Inc., has made the list of official recreational cannabis suppliers to the Ontario Cannabis Store
SmallCapPower | August 23, 2018: Newstrike Brands Ltd. (TSXV:HIP) Tuesday announced that its wholly-owned subsidiary, Up Cannabis Inc., has signed an agreement naming it to the list of official recreational cannabis suppliers to the Ontario Cannabis Store (OCS). This is the third such provincial supply agreement for Newstrike, following deals with Alberta Gaming, Liquor & Cannabis Commission (AGLC) and British Columbia Liquor Distribution Branch (BCLDB), both struck in July. The current deal bolsters Newstrike’s strategy to position Up Cannabis as a premier adult-use brand in Ontario, the largest adult-use market in Canada projected at $1.68 billion, or 38% of overall adult-use market.
For Our Complete Coverage Of Canadian Marijuana Stocks Click Here
Watch: Cannex Capital Holdings (CSE:CNNX) Wants to Emerge as a Multi-State U.S. Player, Says CEO
Post the announcement, shares of Newstrike Brands surged nearly 22% to close at $0.67 on the TSXV Tuesday and gained another 15% on Wednesday.
Newstrike Brands CEO Jay Wilgar said, “We are absolutely thrilled to be among the select group of licensed producers to partner with the OCS to service the ground-breaking launch of Canada’s largest adult-use cannabis market. This agreement marks yet another significant achievement for Newstrike and Up, bolstering our strategy to position Up Cannabis as a premier adult-use brand.”
Newstrike Brands also announced recently that it has accumulated dried and finished goods cannabis inventory valued at $8.2 million as at June 30, 2018. As well, the Company has broken ground and begun construction on the Phase II Niagara expansion, which includes 40,000 square feet of processing space and 160,000 square feet of additional greenhouse space dedicated to cannabis production.
Newstrike Brands currently has a production capacity of 15,000 kg/annum, which will increase to 25,000 kg/annum post Phase II completion of its Niagara facility in early 2019. Along with the three provincial supply agreements, Newstrike has investments in Inner Spirit Holdings Ltd, for the retail distribution of Up Cannabis Inc. products and the creation and operation of Up Cannabis-branded customer lounges or “Experiential Hubs” in Spirit Leaf stores. Newstrike Brands currently trades at a market cap of $427 million.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
To read our full disclosure, please click on the button below:
