MediPharm Labs (TSXV: LABS), one of the leading experts in the world when it comes to CBD extraction, purification, and concentration into oil products, has announced their Q1 2019 financial results.
Surprising many analysts, MediPharm went on to report that their revenues increased by 115 percent, sitting at $22 million for the quarter.
Considered to be one of Canada’s top cannabis-oil producers, MediPharm Labs breaks the pattern when it comes to most marijuana companies. Having steadily risen in share price regardless of what’s happened in the markets, MediPharm’s resiliency has surprised many in the markets, especially considering the company’s relatively small $700 million market cap.
In comparison to last year, MediPharm’s revenue increased by 115 percent in comparison to the same time last year. Gross profits were around 31 percent, or $6.9 million, while adjusted EBITDA were at $4.3 million. Additionally, the company also reported a positive cash flow for the quarter, something which isn’t too common among other cannabis companies.
“Our very strong start to the year included signing our fifth, 3-year tolling agreement, with TerrAscend Corp., and completing two new private label supply agreements in the quarter, raising the total potential value of our private label sales agreements to in excess of $85 million over a 15-month period from December 2018. This strong sales momentum continued well into the second quarter, with several new agreements in process and a healthy pipeline beyond those,” said MediPharm CEO Patrick McCutcheon. “In anticipation of expanded legalization in the fall of 2019, we are advancing our distillate and white label solutions platforms to enhance our position for vapeables, edibles and topicals as we expect our addressable market and consumer demand to significantly increase. Our white label offering will be an enduring advantage and attractive solution for LP’s, direct-to-consumer brands and CPG companies, which we expect will also accelerate our growth in the months and years ahead.”
MediPharm stands out in the cannabis community for the fact that it’s the first company in Canada to become a licensed producer of CBD-oils without getting a marijuana cultivation license previously.
MediPharm also announced earlier this year it had agreed to supply around $35 million worth of purified cannabis oils to a major licensed producer, whose name wasn’t revealed in the agreement. Overall, it’s expected that the company will continue to grow as it’s first mover advantage and leading technology in the field of CBD extraction and distillation puts it in a field above the rest of the competition.
Shares of MediPharm labs ended up dipping 1.6 percent in response to the news. Although the stock initially jumped in the first hour or so of trading on Friday, traders didn’t feel the news was strong enough to justify the increase and prices quickly fell back down to C$6.25.
Unlike most other cannabis companies, MediPharm’s share price has steadily risen over the past six months despite the Q4 2018 decline that ravaged most cannabis companies. Ever since first listing on the TSXV in February 2018, shares have been steadily increasing from C$0.7 to its current level, with the past two months seeing the stock almost double.