3 Cannabis Stocks with a French-Canadian Advantage

The cannabis stocks we’ve uncovered have a distinct advantage with the Société Québécoise du Cannabis (SQDC) as they are headquartered in provinces where French is an official language

SmallCapPower | June 3, 2019: One of the advantages of operating in Quebec or New Brunswick for a cannabis company is that it may be easier to obtain supply agreements with these provinces. This is because Quebec is primarily a French-speaking province, and New Brunswick is Canada’s only officially bilingual province. French-Canadians tend to be accommodating towards one another, meaning supply agreements may be more prevalent from both Quebec and New Brunswick towards cannabis companies headquartered in these provinces. Today we have identified three cannabis stocks that are headquartered within these provinces and have secured agreements to supply the Société Québécoise du Cannabis (SQDC) with recreational cannabis.

*Share prices as at close Thursday, May 30, 2019, data obtained from S&P Capital IQ

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HEXO Corp. (TSX:HEXO) – $9.05

Headquartered in Gatineau, Quebec, HEXO is a consumer-packaged goods cannabis company that manufactures and distributes products in the Canadian market. The Company is one of the largest licensed cannabis companies in Canada. HEXO operates 1.8M sq. ft of production facilities in Ontario and Quebec, yielding 150,000 kg annually. Additionally, the Company has a foothold in Greece to establish a Eurozone processing, production, and distribution centre. On May 28, 2019, HEXO announced that it completed a previously-announced arrangement to acquire all of the issued and outstanding shares of Newstrike Brands Ltd, a producer and seller of medical marijuana in Canada. HEXO secured the largest supply agreement in Quebec. The Company has agreed to supply the SQDC with as much as 100,000 kg over three years (Year 1: 20,000 kg, Year 2: 35,000 kg, Year 3: 45,000 kg).

  • Market Cap: $1.9B
  • YTD Return: 70%
  • 90 Day Average Trading Volume: 3,270,000

Terranueva Corp. (CSE:TEQ) – $0.85

Headquartered in Laval, Terranueva is a cannabis company that leverages its innovative technologies, along with its R&D initiatives, to provide Canadian and international markets with high-quality medical cannabis and seize new opportunities created by the legalization of marijuana for recreational use. TEQ currently produces 1,000 kg of annually, with plans to expand this to 12,000 kg. On May 22, 2019, Terranueva announced that it has signed a letter of intent with the SQDC, under which Terranueva will supply the SQDC with recreational cannabis for distribution and sale in the province of Quebec. Under this agreement, Terranueva will supply 128 kg of product with the potential for additional supply agreements once TEQ increases its capacity.

  • Market Cap: $27.9M
  • YTD Return: 49%
  • 90 Day Average Trading Volume: 80,000

Organigram Holdings Inc. (TSXV:OGI) – $10.22

Headquartered in Moncton, New Brunswick, Organigram Holdings is a licensed producer of cannabis and cannabis-derived products in Canada. The Company produces high quality, premium products for medical and recreational consumers. Organigram has a strong brand portfolio, including The Edison Cannabis Company, Ankr Organics, Trailer Park Buds and Trailblazer. On May 31, Organigram announced that its recreational cannabis plants and growing processes have been certified organic with Pro-Cert Organic Systems Ltd. This follows an announcement on February 27, 2019, where OGI signed a letter of intent (LOI) with the SQDC to supply recreational cannabis.

  • Market Cap: $1.6B
  • YTD Return: 80.2%
  • 90 Day Average Trading Volume: 1,640,000

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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