(Reuters) - Medical marijuana company CanniMed Therapeutics Inc CMED.TO said on Tuesday it had entered into an agreement with Up Cannabis for the supply of raw material in the face of rising demand as Canada prepares to legalize recreational pot.
The deal includes the production and supply of 1,500 kilogram (kg) of cannabis over the next 15 months.
Canada is set to legalize the production, sale and consumption of recreational marijuana, prompting a wave of deals by companies to cash in on the market and secure supply.
“Access to consistent supply is the key differentiator in today’s fast-growing medical cannabis market,” CanniMed Chief Executive Brent Zettl said in a statement.
CanniMed is in the process of buying Up Cannabis’ parent Newstrike Resources, while also fending off a hostile takeover by larger rival Aurora Cannabis Inc (ACB.TO).
Zettl said the supply deal will help CanniMed provide to both the medical and recreational markets.
Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Arun Koyyur