Pot Grower Aphria Surges After Its Online Pharmacy Sales Pact

(Bloomberg) -- Aphria Inc., a Canadian medical marijuana grower, surged after striking a deal to have its production sold through the website of a major pharmacy chain.

Aphria jumped as much as 30 percent in Toronto trading Tuesday. The shares were up 15 percent at C$13.67 at 9:54 a.m. local time.

The Leamington, Ontario-based company agreed to supply Shoppers Drug Mart, part of retail group Loblaw Cos., it said in a statement Monday. The weed is expected to be sold online as current Canadian regulations restrict the sale of cannabis in retail pharmacies.

Pot Grower Aphria Surges After Its Online Pharmacy Sales Pact

“It’s really a huge reach-out to thousands of doctors who probably today have not” yet written marijuana prescriptions, Aphria Chief Executive Officer Vic Neufeld said on a conference call following the announcement. “When a pharmacist is involved in the process, they become a lot more agreeable or receptive or comfortable in writing a script.”

The agreement comes amid a frenzy surrounding Canada’s nascent marijuana market as the country is poised to legalize recreational pot by July. Canaccord Genuity Group Inc. estimates sales could reach C$6 billion ($4.7 billion) annually by 2021 and medical sales could reach C$1.8 billion.

“There are 1,300 Shoppers Drug Mart and Pharmaprix locations across the country,” Beacon Securities analyst Vahan Ajamian said Tuesday in a note. “We see this five-year agreement as a major milestone for Aphria and for the sector at large.”

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