Montreal, Quebec – Mercanto Holdings Inc. (TSX-V: MUSH), a company focused on the Canadian cannabis market, has achieved a significant milestone ahead of Quebec’s highly anticipated launch of its legal cannabis vape category. The company has received preliminary acceptance from the Quebec cannabis authority, the Société québécoise du cannabis (SQDC), for three distinct vape cartridge products. This development positions Mercanto to be among the first participants in the province’s newly opening market segment.
Securing Early Market Access
The acceptance covers products under Mercanto’s established Velada and Nordique Royale brands, broadening the company’s portfolio presence in the Quebec market beyond traditional dried flower and oils. The preliminary approval is a crucial step in making these products available to Quebec consumers as soon as the category officially launches, offering new consumption options within the province’s regulated framework.
Mercanto Holdings Inc. specified that the acceptance applies to three particular vape cartridge products:
* Cherry Blossom: A formulation designed with a high-CBD and moderate-THC profile, intended for distribution across all retail stores province-wide.
* Afghan Gold: Featuring a high-THC and moderate-CBD formulation, also designated for availability in all retail stores throughout Quebec.
* Peach Sumo: A high-CBD vape product specifically slated for sale via the SQDC’s online sales channel.
This strategic selection ensures Mercanto captures both in-store and online consumer segments right from the outset of the category launch.
Projected Market Share at Launch
Based on the products that have received preliminary approval from the SQDC for the initial launch phase of the vape category, Mercanto is set to command a notable presence. According to the company, at launch, Mercanto anticipates holding approximately 8% of the physical shelf space dedicated to vape cartridges, representing three out of the 25 vape cartridges approved for retail province-wide. Furthermore, Mercanto expects to secure roughly 10% of the online segment, with these three products making up three out of 30 SKUs approved for online sales at launch. These figures indicate a significant initial market share for Mercanto in a category with no prior established players in Quebec.
Leadership Perspective on Market Opportunity
Eric Ronsse, CEO of Mercanto Holdings Inc., underscored the strategic importance of this achievement. He stated that securing these initial listings is a pivotal step for the company. Ronsse commented on the unique nature of the Quebec market opportunity, describing it as the “last true gold rush in Canadian cannabis.” This characterization stems, in his view, from the absence of entrenched incumbents in the Quebec vape market segment, presenting a distinct opportunity for early entrants like Mercanto to establish a strong presence and build market share rapidly.
The CEO’s remarks highlight the competitive landscape in other Canadian provinces where vape products have been available longer, leading to more consolidated market positions. Quebec’s delayed entry into the vape category creates a relatively open field for companies capable of meeting the SQDC’s rigorous product standards and supply requirements.
Regulatory Compliance and Next Steps
Mercanto noted that while the acceptance from the Quebec cannabis authority is preliminary, it is conditional upon final reviews of product packaging and the cartridges themselves. However, the company expressed confidence in its compliance efforts, stating that Mercanto does not anticipate these final reviews will pose hurdles to the ultimate listing and sale of the products. This suggests that Mercanto is well-prepared to meet the regulatory specifications set forth by the SQDC.
Navigating the regulatory landscape is a critical factor for success in the Canadian cannabis market, and receiving preliminary acceptance is a strong indicator that Mercanto’s products meet the SQDC’s stringent quality and safety standards. The final reviews represent a standard procedural step before products can be officially added to the SQDC’s catalogue and made available for purchase by consumers.
The Significance of the Quebec Market
Quebec represents one of Canada’s largest consumer markets, and the launch of the legal cannabis vape category is expected to be a significant driver of growth. Vapes have proven to be a popular consumption method in other Canadian provinces, offering convenience and discretion. For Mercanto, securing early listings in this province is not only about immediate sales but also about establishing brand recognition and loyalty in a crucial market segment before it becomes saturated. The “gold rush” analogy used by CEO Eric Ronsse underscores the potential for substantial rewards for companies that successfully penetrate this virgin market space effectively.
Conclusion
Mercanto Holdings Inc.’s preliminary acceptance for three vape products marks a critical development in its strategy to capture a meaningful share of the Canadian cannabis market. By securing early access to Quebec’s nascent legal vape category with products under its Velada and Nordique Royale brands – specifically Cherry Blossom, Afghan Gold, and Peach Sumo – the company is poised to capitalize on a significant growth opportunity. The projected initial market share figures of 8% in retail and 10% online, combined with the strategic intent highlighted by CEO Eric Ronsse, position Mercanto as a notable player in what is set to be a dynamic new segment of the Quebec cannabis market.
