Sundial Growers Inc. and Delta 9 Cannabis Inc. entered into a supply agreement pursuant to which Sundial will supply Delta 9 up to 5 million grams of cannabis and cannabis derivative products per year.
The supply deal has been designed to increase the ability of Delta 9 to meet the anticipated rise in market demand following Canada’s full legalization of recreational cannabis. Delta 9 plans to increase its annual production of cannabis in Manitoba to 17.5 million grams by the end of 2019.
The agreement is also deemed to be beneficial for Sundial. While it has a cultivation license, Sundial has not yet been able to secure a license from Health Canada to sell cannabis to the public. This means that sales can only be done through a producer that has been granted a license to sell, just like Delta 9. Delta 9 has testing protocols and quality assurance protocols in place in order to make sure that it is in compliance with Health Canada’s regulations.
According to Sundial Chief Commercial Officer Andrew Stordeur, the supply deal enables them to expand into Manitoba’s market. Sundial is thrilled to be able to provide the residents of Manitoba with high-quality cannabis products via Delta 9, he added.
Both companies have agreed to share marketing strategies and market data to make sure that they have optimized the production and the delivery of the cannabis products to meet the demand and the preferences of their customers. They also agreed to cooperate with each other when it comes to marketing and branding strategies, product trials, education, and technology services.
Delta 9 Chief Executive Officer John Artbuthnot said that they are committed to working with Sundial in order to make sure they meet or, better yet, exceed their supply projections so as to satisfy the requirements of Manitoba residents.
Artbuthnot pointed out that nobody can predict for certain what is going to happen to the cannabis market within the first year of adult-use cannabis legalization, but early indicators already suggest that there will be a dramatic increase in demand. Delta 9 wants to be ready for this rise in demand.
All the clauses in the agreement are pending approvals and regulations of Health Canada, as well as provincial regulatory structures. Moreover, the cannabis products supplied by Sundial will be subject to the relevant provincial regulatory authority’s terms and policies. Sundial is further required to supply products that meet Health Canada’s standards.
About Sundial Growers Inc.
Based in Alberta, Canada, Sundial is a privately held Health Canada ACMPR-approved and licensed producer of medical cannabis. The company combines innovative horticultural techniques with tried and tested heartland farming practices in growing a select range of cannabis plant strains.
Currently, Sundial operates a 31,000-square foot production facility located in Rocky View, Alberta, as well as two separate production facilities that are different stages of licensing. Sundial hopes to become one of the country’s leading cannabis companies by 2020, with a projected production of more than 100 million grams of dry cannabis, as well as more than 32 million grams of cannabis extract or cannabis concentrate.
About Delta 9 Cannabis Inc.
Delta 9 has a wholly owned subsidiary, Delta 9 Bio-Tech Inc., which is licensed medical cannabis producer pursuant to the ACMPR. Delta 9 Bio-Tech also operates an 80,000-square-foot production facility located in Winnepeg, Manitoba. Delta 9’s shares are listed on the TSX Venture Exchange under the ticker symbol NINE.
What is Health Canada’s ACMPR?
ACMPR stands for Health Canada’s Access to Cannabis for Medical Purposes Regulations. Only those producers authorized to produce and sell under the ACMPR can sell or provide fresh cannabis, dried cannabis, cannabis oil, and starter packs to eligible buyers.
In Manitoba, only two cannabis companies have been granted licenses under the ACMPR, while in Alberta, there are only five.