Following market close on Dec. 4, 2017, Aphria Inc. (TSX:APH), an Ontario-based licensed producer of medical cannabis, made headlines when it announced that it had entered into an agreement to be the medical cannabis supplier for Shoppers Drug Mart, a Canadian pharmacy chain.
“We have an impeccable record cultivating and producing high-quality, medical-grade cannabis,” said Vic Neufeld, CEO of Aphria, in a press release. “These traits make us a strong partner for an organization looking to serve and support Canadian patients.”
Considering the significance of a public Canadian cannabis company making a deal with a national pharmacy chain, Aphria went from a closing price on Dec. 4 of C$11.62 to a closing price of C$13.53 on Dec. 5.
The Canadian Index ended the day up by nearly 5%, largely driven by four companies each having more than 10% gains for the day, including Aphria, Emerald Health Therapeutics (TSXV:EMH), Tetra Bio-Pharma (CSE:TBP) and The Hydropothecary Corporation (TSXV:THCX), with increases of 16.44%, 11.59%, 19.7% and 18.96%, respectively.
The deal between Aphria and Shoppers Drug Mart was welcome news to shareholders, but it’s important to note that Loblaw Companies Ltd., parent company of Shoppers Drug Mart, is still waiting for its licensed producer application to be approved by Health Canada.
While the federal and provincial frameworks for recreational cannabis are still being worked out in Canada, which will ultimately affect medical cannabis in the country as well, Loblaw still sees a place for Shoppers Drug Mart in the medical cannabis market.
“As the federal and provincial governments finalize their respective cannabis frameworks, we remain optimistic that they will allow pharmacists in stores, in communities to apply their professional care to medical cannabis patients,” said Catherine Thomas, a spokeswoman for Loblaw, as reported by the Canadian Press.