Opportunities For Emerald Health Continue To Expand After Expansion Of Production Capacity

A recent news release indicates that Emerald Health Therapeutics Inc. (OTCMKTS:EMHTF) will expand its market share in supplying cannabis. Notably, the firm intends to be the cannabis supplier for Société Québécoise du Cannabis (SQDC) after signing a letter of intent. In the letter, Emerald agreed to deliver the first shipment during Q2 2019.

Emerald Health on production capacity expansion drive

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Interestingly, the firm will not have a problem in delivering the orders since it already has a production facility around. Emerald operates Verdélite Sciences Inc., a wholly owned subsidiary based in Quebec. Launched in early February, the facility holds an operational license from Health Canada. The firm acquired the license under the name Agro-Biotech but Emerald changed it Verdélite on acquisition.

In particular, Verdélite occupies 88,000 square feet and it cost Emerald $100 million to be ready for high capacity production.

In addition to Verdélite, Emerald will count on another production facility, Pure Sunfarms, which is a joint venture. Just this month, the subsidiary acquired additional 1.1 million square foot greenhouse. With the expanded production area, the firm has a production capacity of close to 75,000 kgs annually. The firm hopes to double this capacity in the coming months.

Entering new markets

Clearly, the new acquisitions and production capacity expansions are evidence that Emerald is aiming pretty high. The acquisition of SQDC as a new business partner exposes the firm to the opportunities in the Quebec market. For starters, Quebec has a large population of adult-use consumers. According to Dr. Avtar Dhillon, Emerald President and Executive Chairman, their main objective is supply cannabis throughout Canada.

The addition of SQDC as a business partner implies that Emerald now has presence in over seven major cannabis markets. Besides Quebec, Emerald already has operations in Ontario, Yukon, BC, and Newfoundland. Recently, the firm signed an agreement with Alberta Gaming, Liquor and Cannabis (AGLC). Also, the firm has a license that allows it to operate in Saskatchewan.

The signing of the LOI with SQDC is just another demonstration by Emerald of its robust expansion strategy this year. In mid-March, the firm made its first major shipment of cannabis after delivering an order to Ontario Cannabis Retail Corporation.

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