Cronos Group Inc (NASDAQ:CRON) (CSE:CRON) (FRA:7CI) spiked in the premarket on Tuesday after announcing a clutch of cannabis supply agreements across Canada for the upcoming launch of the recreational market in October 2018.
Cronos said it has secured listing and signed binding master supply agreements with both the Ontario Cannabis Retail Corporation and the BC Liquor Distribution Branch. Combined, these provinces encompass over 50% of the Canadian population and hence the potential customer base which the company is prepared to serve.
The company added it has also secured listings and accepted supply terms with the Nova Scotia Liquor Corp and Prince Edward Island Liquor Corp. Cronos Group will be offering Dried Flower, Pre-Rolls and its highly rated Oils through both government-operated retail stores and online platforms across its three recreational brands.
Shares of Cronos in New York shot up more than 11% to US$8.14 in Tuesday Morning trading.
READ: Cronos Group reports jump in 2Q revenue and profit on booming demand for cannabis oil
Cronos Group plans to serve the Canadian recreational market through its bi-coastal production platform which includes facilities in British Columbia and Ontario.
Excitement has been building in Canada because of legal recreational marijuana sales by October.
"Cronos is excited to provide our premium quality products to Canadian consumers for the upcoming legalization and launch of the recreational market," said Cronos chief executive Mike Gorenstein.
Cronos Group is a globally diversified cannabis company with a presence across four continents. The company operates two wholly-owned Canadian licensed producers regulated under Health Canada's Access to Cannabis for Medical Purposes Regulations. Cronos has multiple international production and distribution platforms in Germany, Poland, Israel and Australia.
Tilray also inks a deal
Tilray Canada Ltd (NASDAQ:TLRY) is also bringing its portfolio of cannabis products to Ontario’s adult-use market.
The recently-public Canadian cannabis company has signed an agreement of its own with the Ontario Cannabis Retail Corporation to supply the province of Ontario as of October 17.
Shares of Tilray were up nearly 9% to US$39.03 in Tuesday morning trading.
Tilray’s affiliate High Park Holdings Ltd will produce and distribute the products.
“Our goal is to deliver on the high expectations that Ontarians have of us by cultivating and distributing a portfolio of world-class adult-use brands and products that will lead the market in quality, excellence and craftsmanship,” said Adine Fabiani-Carter, Chief Marketing Officer at High Park, in the company’s press release.
The brands offered will include Marley Natural, a line inspired by musician Bob Marley, as well as women’s wellness brand Irisa and Canaca brand’s Canadian cannabis strains.
--Updated to include details of Tilray's agreement and latest share price