MediPharm Labs, Corp. (TSX: LABS) says it struck a supply deal inside Brazil’s medical cannabis market, as the struggling Canadian extractor continues to target new international opportunities.
On Tuesday, the Ontario company said it signed a two-year agreement with Rio de Janeiro-based XLR8 Brazil to supply the local distributor with several CBD and THC extract products.
While the company didn’t disclose the financial terms of the deal, it sees big potential inside Brazil — a country with a population of nearly 210 million. Cannabis research firm Prohibition Partners forecasts medical cannabis sales of US$12 billion by 2028 in Latin America, with the largest growth being driven by Brazil.
“By virtue of its large population, forward-thinking legislative eco-system and economic strength, Brazil is one of the world’s most promising medical cannabis markets and the natural next port of call for our international expansion and growth strategy,” MediPharm CEO Pat McCutcheon said in a statement.
INT'L NEWS: MediPharm Labs Enters Brazil – Latin America’s Largest Medical Cannabis Market in Partnership with XLR8 Brazil; two-year agreement for patient-ready formulated products. $LABS $MEDIF $MLZ #LATAM #MedicalCannabis https://t.co/1WBQMFocDP pic.twitter.com/xjRSjJqpCQ
— MediPharm Labs (@MediPharmLabs) September 22, 2020
This is the second time this month that MediPharm inked a supply deal inside Latin America, after it signed a one-year contract with a Peruvian-based producer. The company also inked two deals in Denmark’s medical market this month, and says it remains focused on international expansion after posting three straight quarters of falling revenues in Canada.
MediPharm says its pharmaceutical approach to extraction and GMP certification at its Ontario and Australia facilities has helped it land more global supply deals.
Under Brazil’s regulatory framework, the federal government set out strict requirements for production, import and dispensing of all medical cannabis programs.
In December 2019, the National Agency for Health Surveillance of Brazil issued regulations under a three-year pilot program that requires all imports to meet GMP certification as well as global pharmaceutical inspection standards.
Medical cannabis in Brazil can only be prescribed to patients with severe, debilitating diseases by registered doctors and sold through pharmacies. Brazil is expected to potentially have one of the world’s highest potential patient counts, according to Prohibition Partners.
MediPharm said it chose to partner with XLR8 “because of their focus on quality and compliance, their extensive relationships with local healthcare professionals and dedicated focus on the advancement of medical cannabis scientific validation and education.”
The company’s stock has fallen eight cents since the supply deal was announced and more than 80 per cent year-to-date.
Top image by Nico Kaiser via Flickr