Hydropothecary will host a conference call for financial analysts and shareholders today at 8:30 a.m. EST to discuss the SAQ delivery agreement. The entry number is 1-(866) 521-4909, the passcode is 1776268. A repeat of this call will be available after the fact on our website www.thcx.com. MediPharm Labs Corp. is suing Quebec-based Hexo Corp. after claiming that the pot grower did not pay for cannabis oil worth several dollars because of a delivery contract signed last year, the marijuana extraction firm said in a court case. In mid-March 2019, HEXO announced the acquisition of Newstrike Brands for approximately $197 million. Under the agreement, Newstrike shareholders will receive 0.06332 HEXO shares for each Newstrike share. In return, HEXO receives a strong boost of capacity and a large high-end bump. The next step in the maturing process for pot stocks is dealmaking, whether from the point of view of consolidation, signing supply contracts or supplies or partnering with other companies or industries. As part of the agreement, Hydropothecary will supply 20,000 kg of products in the first year of the agreement and is expected to supply 35,000 kg in the second year and 45,000 kg in the third year.
The quantities for the last two years of the agreement will be determined later on the basis of the turnover achieved during the first three years. The delivery agreement covers all of the company`s products and brands, from flowers to oil. HEXO estimates its market share in adult use at 30% in Quebec based on publicly announced delivery agreements, and during the five-year period of its delivery agreement, management believes it could receive a turnover of about $1 billion. We have taken important steps to ensure that we are well equipped to meet future demand for cbd derivatives markets in Canada and around the world. This also implies that, in our current plant in Belleville, we have secured a large and consistent supply of high quality hemp for product processing. We are in the process of obtaining technology to clean outdoor hemp of harmful pesticides, which we believe gives us an advantage in obtaining quality extracts in the United States. We have 8 high strains of cbd hemp in tissue culture in partnership with the University of Guelph, as we prepare the foundation for becoming a field that acquires a previous contract.