With legal marijuana sales to adults closing in, deal flow is starting to pick up steam in the industry, including Aurora Cannabis (TSX:ACB)(OTCQB:ACBFF) saying Tuesday morning that its subsidiary MedReleaf has struck a supply agreement with the Ontario Cannabis Store and The Supreme Cannabis Company (TSX-V:FIRE)(OTCPK:SPRWF) also announcing that its subsidiary, 7ACREAS, will be supplying products to Ontario Cannabis Stores.
On October 17, online sales of recreational cannabis launch across Canada. Supreme Cannabis said that the deal is structured to include supplying brick and mortar retail sales once the framework for such sales are hashed-out and implemented by the province.
There are more than 14 million people in Ontario, making it Canada's largest adult consumer use market.
The Supreme Cannabis deal with the Ontario Cannabis Store has a term of 24 months, with renewal options. The Toronto-based company also has supply agreements with the provinces of Manitoba, British Columbia and Alberta. In each of these provinces, 7ACRES' brands have been qualified in the "highest-quality" category.
Ontario has yet to label 7ACRES products, but management expects to again be deemed at the highest level of quality when those decisions are announced.
7ACRES, a federally licensed producer of medical cannabis, intends to meet demand from its 342,000-square-foot facility in Kincardine, Ontario.
As we touched on last week, Supreme Cannabis is also supplying over 210 kilograms of medical cannabis to PureSinse, a subsidiary of Pure Global Cannabis (TSX-V:PURE)(OTCPK:PRCNF).
Shares of Toronto Venture-listed FIRE has struggled mightily since hitting a 52-week high at $3.49 in January, including sinking to as low as $1.25 last week. Shares have climbed some off that bottom, gaining 2.9% on Monday to close at $1.44, with investors likely looking for the stock to push higher on this morning's news.
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