The CEO of Hydropothecary – a Quebec-based cannabis producer that could soon become one of Canada’s largest – believes the province is eyeing a lower price-point for legalized marijuana than what is widely expected.

Hydropothecary (THCX.V) co-founder and CEO Sebastien St. Louis told BNN in an interview on Tuesday that Quebec is targeting a price of $7-8 per gram, as opposed to the $10 average that has been widely discussed during the legalization process.

“I think where Quebec has really differentiated itself and really been a leader here has been to realize that pricing will be key in driving out the black market. So, they’ve actually targeted pricing between seven and eight dollars [per] gram, which is sufficient to start making some serious inroads into the black market,” St. Louis said.

“There’s no discussion of any price control at the moment, but I think that seven to eight dollars, having a bulk of products and a bulk of choices, of consumption method at that level … it will be important to have a lot of choice at that price-point.”

Hydropothecary made a big move on Tuesday as it tried to take an early lead in Quebec’s cannabis market, announcing it has acquired 78 acres of land beside its existing 65 acre facility in Gatineau, Que. It also said it will construct a new one million square-foot greenhouse, increasing its production capacity to 108,000 kg of dried cannabis per year.

St. Louis said the large output is in line with what the province’s demands will be.

“I was sitting with the government of Quebec a few weeks ago, the parliamentary commission on marijuana legalization, and the government expressed concern around the legal industry’s ability to supply quality marijuana to Quebecers. In response to that, their demand – for Quebec alone – was 144 tonnes,”St. Louis said.

“That’s why in response, Hydropothecary has stepped up to the plate, has committed 108 tonnes of production with Quebec as our priority market”

The expansion is expected to be completed by December, 2018 and is slated to cost an estimated $80 million. St. Louis added that while a supply deal with the province is not yet complete, talks are “progressing.”

“The supply deal isn’t closed at the moment. We are in talks, however, with the government and also with the crown corporation that will be in charge of distribution,” St. Louis said. “Those talks are progressing very well and our commitment is to help the government achieve its goals of public safety and responsible supply of quality marijuana.”