MediPharm Labs reports 43% increase in Q2 revenues

MediPharm Labs

One of the world’s leading cannabis companies focused on CBD extraction, distillation, and isolation posted their financial earnings results Monday. MediPharm Labs (TSX: LABS)(OTCQX: MEDIF), a company that’s boasted an impressive 150 percent return over the past six months, reported a 43% increase in its Q2 revenue figures which surpassed Wall Street expectations for the most part.

While that figure in and of itself isn’t that impressive for the cannabis industry, which has seen triple-digit growth quite often, what’s impressive is the fact that this was above what the average consensus estimate was for the company. Revenues came in a $31.5 million, a 43 percent increase from Q1 2019.

Gross profit was at $11.3 million, which saw a 65 percent increase from the previous quarter. Lastly, net income before taxes came in at $4.1 million, representing a profitable quarter for the company. This is especially significant as many marijuana stocks still aren’t profitable. In comparison to the last quarter, where MediPharm had a loss of $0.3 million, this is a drastic improvement for the company.

“MediPharm Labs made tremendous progress in the second quarter with growth in all key value drivers,” said MediPharm Labs CEO Patrick McCutcheon. “Based on the strength of our business model and the effectiveness of our corporate strategies, we’ve become the first public Canadian extraction only company to deliver bottom-line earnings and do so while investing heavily in our sophisticated extraction and production platforms ahead of benefits realized. The significant momentum we’ve gained through important new customer and procurement relationships, and the successful ramp up of our Canadian and Australian facilities will drive growth and value for the remainder of this year and well beyond.”

Shares of MediPharm labs fell by 4.4 percent in response to the news, with retail investors not really being as impressed by these latest financial figures despite beating previous estimates. While most other sectors would find a 43 percent increase in revenues as being the cause to celebrate, investors don’t look at the marijuana sector in the same way.

A combination of lofty expectations alongside diminishing excitement has seen a number of companies lose the appealing luster they once had a year ago despite posting more than reasonable financial results. As such, it can be anyone’s guess how markets will respond when companies announce anything besides exceptional or atrocious earnings results.

Over the past-sixth months, however, the stock has done exceptionally well, rising from around $2 to it’s current $5.16 per share, a 150% gain. At the moment, there are few signs that MediPharm Lab’s growth will be slowing down.

MediPharm Labs Company Profile

MediPharm Labs Corp 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 Regulation without first receiving a cannabis cultivation license.

The focus on cannabis concentrates from current Good Manufacturing Practices and ISO standard clean rooms and critical environments laboratory, allows MediPharm Labs to produce purified, pharmaceutical-grade cannabis oil and concentrates for derivative products.

The company has invested in research-driven team, technology, downstream extraction methodologies and purpose-built facilities to deliver safe and precisely-dosed cannabis products to patients and consumers. – Warrior Trading News