MediPharm Labs Jumps 34 Percent after signing $35 Million Supply Deal


One of Canada’s top research and development companies based around cannabinoid (CBD) extraction and isolation announced a major partnership today. Toronto-based MediPharm Labs Corp (TSXV: LABS) revealed to the public that it had entered into a large-scale sales agreement with a leading licensed producer in Canada (whose name was withheld and remains anonymous).

The arrangement would see MediPharm supply a minimum of $35 million in purified cannabis oil concentrate, of which the licensed producer would pay upfront $7.7 million, with an additional $27 million worth of inventory to be purchased over a 12-month period starting on March 2019. The agreement also gives the option to purchase another $13.5 million from MediPharm, putting the total worth of the deal up to $48 million potentially.

“As the cannabis industry continues to rapidly grow and evolve, MediPharm Labs has quickly established itself as a dominant player and leading provider of private label cannabis oil concentrates to other Licensed Producers and branded product manufacturers. We have also demonstrated the permanent need for a specialized extraction provider to fulfill and secure the cannabis supply chain for medical and recreational consumers,” said MediPharm CEO Pat McCutcheon. “With our significant first mover advantage, deep expertise, leading-edge proprietary technology to manufacture and develop high-quality cannabis oil and concentrate products at commercial scale, we have quickly been able to execute several major contracts already and continue to see robust demand for our specialized products and services and are well positioned to achieve strong revenue growth as a dominant extraction company in the cannabis industry.”

MediPharms Labs’ private label program remains one of its highest margin offerings in the company, purchasing dry cannabis flower and extracting a refined cannabis oil concentrate to be resold globally at a high-profit margin. This agreement is the fourth of its kind to date, with all of them collectively having an $85 million income potential for the company of the next 15 months. This agreement, however, marks the single largest of its kind. MediPharm has signed agreements with major companies such as Canopy Growth Corporation, which last year announced a long-term supply agreement with MediPharm.

In response to the news announcement, shares of MediPharm surged by 34 percent as traders and investors jumped on the good news. Currently sitting a C$2.59 per share, this represents the highest the company’s stock has been since February 22nd, 2018, where the stock jumped from C$0.80 to C$3.0 before falling back down to C$1.04.

MediPharm Labs Company Profile

Founded in 2015, MediPharm Labs is a pioneer in the cannabis industry and has the distinction of being the first company in Canada to become a licensed producer for cannabis oil production under the Access to Cannabis for Medical Purposes Regulations (ACMPR) without first receiving a cannabis cultivation licence. This expert focus on cannabis concentrates from its cGMP (current Good Manufacturing Practices) and ISO standard-built clean rooms and critical environments laboratory, allows MediPharm Labs to work with its established, Health Canada-approved cultivation partners to produce pharmaceutical-grade cannabis oil with a competitive advantage. MediPharm Labs is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification. – MediPharm Labs