Marijuana stocks saw widespread gains on Tuesday after the Ontario provincial government in Canada announced that it had reached supply agreements with 26 licensed cannabis producers ahead of the recreational drug becoming legalized on October 17.

Smaller marijuana producers, which signed “initial agreements” with the Ontario Cannabis Store to sell marijuana and cannabis online starting in October, saw their stock prices lifted in trading Tuesday afternoon.

Shares of licensed producer Beleave Inc. (CNSX: BE), for example, rose 16 per cent to $1.55 on the Toronto Stock Exchange, while Newstrike Brands Ltd.’s stock (CVE: HIP) increased more than 21% to $0.67 in Toronto trading.

The Government of Ontario announced after markets closed on Monday that it had signed agreements with 26 licensed cannabis producers to supply government-run distributors with marijuana and cannabis items.

The licensed producers that secured Ontario government contracts include large players such as Canopy Growth Corp. (TSE: WEED), Aurora Cannabis (TSE: ACB) and Aphria Inc. (TSE: APH), as well as smaller companies such as Starseed Medicinal Inc. and Solace Health Inc.

Sales of recreational marijuana, beginning on October 17, will only be available through the Ontario Cannabis Store’s online retail channel. The provincial government said it will not sell marijuana and cannabis at bricks-and-mortar retail outlets until it establishes a wholesale distribution network to supply marijuana and cannabis to legal private stores — likely by April 2019.

The plan by Ontario’s newly elected Progressive Conservative government to have cannabis sold through a private retail model stands in contrast to the previous Liberal government’s plan for a provincial government monopoly on all cannabis sales within Canada’s most populous province.