MediPharm Labs Corp. (TSXV: LABS) (OTCQX: MEDIF) (FSE: MLZ) says it’s acquired the house brands and intellectual property associated with former medical cannabis seller Shelter Market to fill a gap in its product portfolio.
On Tuesday, the Canadian cannabinoid drug developer said it acquired Shelter Cannabis’s pre-rolls and dried flower products, including manufacturing know-how, trademarks, marketing assets and provincial listings.
MediPharm will pay Shelter on an earn-out reflective of future gross sales, net of excise tax. Shipments are expected to begin during the second quarter of this year.
The products will come from MediPharm’s facility in Barrie, Ontario. The company says the deal creates an opportunity to improve its existing medical flower distribution network that’s already shipping to pharmaceutical partners in Germany and the United Kingdom.
Agro-Greens Natural Products Ltd. has been operating as the small-batch craft company Shelter Cannabis, which is headquartered in Victoria and processes in Saskatchewan.
“We are very excited by the opportunity that MediPharm has created for our brands to live on in the Canadian recreational market,” Shelter CEO Michael Nederhoff says in a statement.
“After a successful journey, Shelter and Wildlife have made a lasting impression which MediPharm will now take ownership of and continue to grow.”
MediPharm CEO Bryan Howcroft says the transaction is an important step for the company’s goals of building its recreational market portfolio.
“With Shelter, we see a significant opportunity to get a head start in the important dried flower and pre-roll segment of the market, with the addition of a well-regarded list of brands, led by Shelter’s flagship Wildlife brand,” Howcroft says.
“With MediPharm’s existing buying power, and established sales and production platforms, we believe there are multiple opportunities to generate revenue and cost synergies through this transaction, to continue building value for MediPharm shareholders.”
In January, beloved medical cannabis platform Shelter Market — known for its selection of high-quality products and customer service — shuttered operations, while facilitating the transfer of its registered patients to other providers.