Shares of Hydropothecary Corp. rose more than 18 per cent after the licensed medical cannabis producer announced ambitious plans that will see it further grow its operations in Quebec at a rapid pace.
The company (TSXV:THCX) said Tuesday it has acquired property adjacent to its existing facility in Gatineau, Que., to construct a new 93,000-square-metre greenhouse that would increase its production capacity to 108,000 kilograms of dried cannabis per year.
The expansion will bring the company's total production capacity to about 121,000 sq. m of cultivation and manufacturing labs, with the expansion expected to be completed in one year.
"Hydropothecary is boldly stepping forward to take the lead in the Canadian cannabis industry... Once legalization and the adult-use recreational market become a reality, Hydropothecary will be ready," said Sebastien St. Louis, CEO and co-founder, in a statement.
Vahan Ajamian, a research analyst with Beacon Securities Ltd., said the expansion would put Hydropothecary among the top three producers in Canada.
By comparison, Ontario-headquartered Canopy Growth Corp. (TSX:WEED) announced in October that it will develop up to about 280,000 sq. metres of greenhouse growing capacity in British Columbia, more than doubling the production footprint of Canada's biggest licensed marijuana producer.
Hydropothecary currently has a production capacity of about 4,600 sq. m and produces about 3,600 kg of dried cannabis per year. An expansion announced in October will see the company increase its production capacity by about 23,000 sq. m by next July, after which it said it's expected to produce about 26,000 kg annually.
St. Louis said costs for the newest expansion to be completed next December, which are expected to be $80 million, will be funded through the company's current financial resources.
The addition is expected to create up to 100 jobs during construction, with another 100 positions forecast for the operation of the new facility.
This is on top of 100 jobs which will be created when the company's 23,000 sq. m greenhouse expansion, which is expected to cost $25 million, becomes operational in July.
Shares of Hydropothecary closed at $4.11, up 63 cents or 18.10 per cent, on the TSX Venture Exchange.
