One of the world’s largest cannabis extractors, MediPharm Labs Corp. (TSX:LABS), has had an action-packed last several days: The Barrie, Ont.-based company announced Wednesday it entered a multi-year supply deal with Canadian pot producer TerrAscend (CSE:TER); a day before, the firm said it entered Europe’s medical cannabis through a sales agreement with a German pharmaceutical company; and on Friday, MediPharm said its gained organic certification for its cannabis oil products.
MediPharm, TerrAscend link up
MediPharm Labs said under its multi-year deal with TerrAscend Canada, the subsidiary of TerrAscend, it will supply the pot firm with around $27 million of high-quality, private label cannabis concentrate over the next two years starting this month. The contract has the potential to reach $192 million and extend to September 2022 under its renewal and purchase options.
TerrAscend will use the cannabis oil supply to bolster its production of second-phase products such as vape pens and edibles that will become available in Canada later this fall.
“As Canada prepares for the next stage of legalization, we are thrilled to be collaborating with a leading global company like TerrAscend focused on creating new and innovative product formulations and brands that enhance the consumer experience.”
Patrick McCutcheon, MediPharm Labs CEO
McCutcheon added as the company moves closer to receiving EU GMP certification, the deal with TerrAscend will position the two firms to explore global and U.S. growth opportunities.
TerrAscend CEO Michael Nashat said the agreement will allow the company to access MediPharm’s high quality pharmaceutical-grade cannabis extract to develop premium derivative products for Canada and international markets.
According to TerrAcend, it is the first and only company to sell to the medical and legal recreational markets in the U.S., Canada, and Europe.
MAJOR SALES AGREEMENT: MediPharm Labs & @terrascendcorp Enter Major Private Label Concentrate Supply Agreement with Potential Value Up to $192 Million. To support the production & launch of TerrAscend's Cannabis 2.0 portfolio $LABS $MEDIF $TER $MLZ https://t.co/zlAqKZPiA6 pic.twitter.com/TfvaY2dm4h
— MediPharm Labs (@MediPharmLabs) September 25, 2019
MediPharm enters Europe for first time
On Tuesday, MediPharm Labs said it signed its first white label sales contract to export into Europe with ADREXpharma Gmbh, a leading licensed wholesale distributor of medical cannabis which serves 20,000 pharmacies across Germany.
The extraction company said it will supply ADREXpharma with its pure cannabis concentrate products, including THC and CBD oil, that will be distributed and sold under ADREXpharma’s brand in Germany once the products gain regulatory approvals.
“Germany is one of the largest and fastest growing medical cannabis markets in the world and represents MediPharm Labs’ second major international milestone as we prepare to export our private label cannabis concentrates into Germany,” said CEO McCutcheon in a release.
“We are excited to be partnering with ADREXpharma, leveraging their deep expertise and local distribution to bring high quality, purity assured cannabis derivative products into the German market and expand our international exports.”
Germany’s medical cannabis market is one of the fasted growing markets outside of North America with a patient base growing from 1,000 to an estimated 30,000 to 50,000 since 2017, according to a recent Bank of Montreal report. The EU medical cannabis market could reach $30 billion by 2026, according to a separate report from the Canadian bank.
EU SALES AGREEMENT: MediPharm Labs Enters European Medical Cannabis Market with German Pharmaceutical and Medical Cannabis Distributor ADREXpharma® https://t.co/ycuc452z21$LABS $MEDIF $MLZ pic.twitter.com/hzqMkcd14M
— MediPharm Labs (@MediPharmLabs) September 24, 2019
Company is certified organic
MediPharm Labs was the first Canadian cannabis company to receive an extraction only licence from Health Canada in 2018. The extraction pioneer says its built up the experience it needs to produce some of the highest quality marijuana concentrates in the industry.
The company said Friday its subsidiary, MediPharm Labs Inc., gained organic certification from one of North America’s leading certifiers of organic products that also provides third party verification to the Canadian Organic Standards.
Gaining organic certification from Pro-Cert Organic Systems is a strong validation to MediPharm Labs’ quality operations and GMP complant facility, the company said.
The certification will allow MediPharm to manufacture organic extracts and oil products in large quantities that can be further used as a quality ingredient in cannabis products such as edibles, topicals and vape pens for both adult-use and medical markets, it said.
“With the increasing demand for high quality, differentiated products, MediPharm Labs has again expanded its capabilities to enable our customers, and other non-cannabis CPG brands, to introduce innovative and premium, higher margin derivative products in additional categories to the Canadian cannabis market,” said CEO McCutcheon in a statement.
“We are proud to receive this certification which further adds third-party validation of our quality management system and integrity in the supply chain.”
The announcement spree in the last several days hasn’t help MediPharm Labs’ stock rally, as the company’s shares have dropped 3.7 per cent since markets opened Friday morning.
ORGANIC CERTIFICATION: MediPharm Labs Receives #Organic Certification for Cannabis Oil & Extracts for Medical- & Adult-Use Markets, from @ProCertOrganic expanding their ability to offer innovative & premium, higher margin derivative products $LABS $MEDIF https://t.co/rmxCK1itRj pic.twitter.com/UT1MKAXNT2
— MediPharm Labs (@MediPharmLabs) September 20, 2019