Exclusive CEO Interview: Hydropothecary’s Strategic Presence, Dual Focus Set It Apart


Ryan Allway

December 7th, 2017

Exclusive, News, Top News


Canada’s cannabis industry is projected to reach $22.6 billion over the coming years, according to Deloitte, but there are more than 70 licensed producers for investors to choose from for exposure. While many LPs are focused on scaling up their operations, The Hydropothecary Corporation (TSX-V: THCX) has focused on developing award-winning products and scaling up in a province that could give it near-exclusive supply rights.

In an exclusive interview, CFN Media’s Mike Elliott talked with CEO Sebastien St-Louis:

 

Strategic Presence in Quebec

Canada’s projected growth in the cannabis industry is driven by the pending legalization of adult-use cannabis next year. Under the new laws, provinces have the right to develop their own legislation governing the distribution and sale of cannabis, which means that different provinces could have different advantages and disadvantages affecting the licensed producers within them.

Quebec is widely known as having a unique and independent culture, compared to the rest of the country, with a French-speaking population. The consumers of the province are known for favoring products originating in the province.  Not surprisingly, Quebec’s Premier stated in the National Assembly recently that he would prefer adult-use cannabis sold in the province to be grown in the province. The Hydropothecary Corporation is uniquely positioned as one of only two licensed producers located in Quebec, and the only one headquartered in the province.

Quebec’s pending legislation would legalize the purchase, possession, and consumption of marijuana for adults over 18 years of age. No one will be permitted to grow cannabis for personal use and possession is limited to 150 grams of dried cannabis. The drug may be smoked in the same areas as tobacco, but there would be a zero tolerance for driving under the influence of marijuana, with a 90 day suspension for those who test positive.

Strong Product & Branding

The Hydropothecary Corporation has focused on developing great products and distribution channels to accelerate its growth over the coming years. This dual focus sets the company apart from many other licensed producers that are focused purely on achieving scale and others that are focused squarely on developing pharmaceutical-grade products, and could set the stage for tremendous value creation over the coming years.

The company has invested heavily in product research and development. Its Decarb cannabis pills are ready-to-consume activated marijuana powders that are priced between $3 and $15 per gram, while its Elixir sublingual mist provides an easy-to-use consumption method. These products have already received awards at the inaugural Canadian Cannabis Awards, including a first place award for its Decarb cannabis powders and third place for Elixir.

At the same time, the company is investing about $25 million in building out a 300,000 square foot facility.  The expansion would enable the company to generate an estimated annual output of about 25 tons of cannabis, which would make it among the top producers of legal cannabis – with many peers trading with $1+ billion market capitalizations.

Looking Ahead

The Hydropothecary Corporation (TSX-V: THCX) represents a compelling investment opportunity in Canada’s burgeoning market. With recreational legalization coming next year, the company has committed to scaling up its production while continuing to develop award winning products. This dual focus sets it apart from many other companies in the space and could put it on track to become a leading licensed producer.

For more information, visit the company’s website at https://www.thehydropothecary.com.

Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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