“MediPharm Labs is executing exceptionally well against all of our strategic operating priorities for 2019 and this will be reflected in our financial results for Q2 and beyond, “said Patrick McCutcheon, Chief Executive Officer, MediPharm Labs.” I am particularly pleased with the pace of new sales, the advancements we’re making in scaling up global production and the high-quality collaborations underway with industry Health Canada compliant suppliers, customers and scientific partners. I am confident that our recent momentum will continue as we strive to produce the world’s best cannabis concentrates and drive future cannabis product innovation.”
MediPharm Labs has increased production of private label cannabis concentrate products and distillate supply – including CBD or THC dominant as well as balanced formulations – to meet the growing demand for specialty concentrate based consumer end products ahead of legalization of vapeables, edibles and topicals in the fall of 2019. Production and quality operations teams ramped up weekly production output to approximately 75 million milligrams of active cannabinoid component concentrate at the end of Q2 2019.
To date, MediPharm Labs has signed four significant contracts for the sale of private label cannabis concentrate including to Canopy Growth, Cronos Group and AusCann. The Company also launched its White Label platform to service direct-to-consumer brands, CPG companies and large LPs in Canada. In June 2019, MediPharm announced its first white label deal to produce a minimum of approximately two million vape pens with Ace Valley, subject to purchase orders from provincial distributors.
The number of dry cannabis suppliers and concentrate purchasers in Canada continues to increase. In turn, this has resulted in higher demand that supports MediPharm Labs’ differentiated, private label business model.
The Company announced it successfully acquired 9,000 KG of dried cannabis in the last three weeks of June 2019 expected to be processed and sold in Q3 2019, and 5,000 KG in the last two weeks of March 2019 that were processed and sold in Q2 2019.
To date, the Company has purchased dried cannabis from over 23 suppliers across the country. MediPharm Labs has conducted in-depth qualifications of all of its dry cannabis and product suppliers.
Potential suppliers to MediPharm Labs are subjected to rigorous scrutiny before entering into agreements which require an enhanced Quality Agreement beyond Health Canada standards. This enhanced supplier qualification aligns with our pharmaceutical-like standards for production of cannabis oil and derivative products. All suppliers and customers remain in good standing with Health Canada Licensing and Inspection division.
During the quarter, MediPharm Labs became the only third-party concentrate manufacturer to begin shipping white label products, including bottled oil, to Provincial cannabis distributors. MediPharm Labs’ white label products can be found in three provinces including Ontario, British Columbia and Alberta. The Company expects to rollout distribution of Health Canada approved products to all remaining provinces during H2 2019.
MediPharm Labs successfully completed its first international export of commercial volume cannabis concentrate to AusCann in Australia in June 2019. The Company continues to focus on accessing and distributing its private label cannabis concentrate to global markets, including across Europe, and is working on various commercial terms.
At MediPharm Labs’ facility in Barrie, Ontario, the Company is adding over 25,000 square feet of purpose-built production space for filling and packing automation, new product manufacturing, cannabinoid isolation activities and specialized R&D projects. Taking a phased approach, operations in this new space are expected to come as each phase becomes approved by Health Canada during the second half of 2019.
MediPharm Labs has successfully completed several equipment automation and innovation projects. The success of these optimization projects has resulted in an increased in capacity of dry cannabis processing to 300,000 KG annually.
As a global leader in extraction with a focus on providing high quality cannabinoid concentrates, MediPharm Labs recently completed a 14-month project for an additional, fully customized large-scale extraction line. The extractor has completed its factory testing in Europe and is being shipped to the Company’s Barrie, Ontario facility. Upon completion of installation, operator training, EU GMP qualification and regulatory prestart activities, operational capacity of specialized and automated dry cannabis processing will exceed 500,000 KG annually.
MediPharm Labs is continuing to evolve its product mix. The bulk of its production and revenue to date has been in high quality winterized resin. This critical input ingredient will become the key building block for future high-growth and high-margin products:
Soft Gel Caps: MediPharm Labs has focused on building scale across operations and product lines including bottled oil and gel caps. An industrial scale soft gel capsule project is underway. Equipment has been deployed, equipment training has started, and formulation work is being conducted.
Vapourizers: The Company is building the foundation to be one of the largest vaporizer cartridge manufacturers in Canada. With new regulations finalized and set to come into effect on October 17, 2019 MediPharm Labs has finalized various formulations and started vapourizer pen cartridge filling research and development trials to ensure readiness to serve current and future white-label partners.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, ramping up of production capacity, a growing customer base, entering significant large-scale white label contracts, capacity increases and timing thereof, commencing shipping to additional provincial distributors, expanded licensed space and timing thereof, new product manufacturing, expected processing and sales in Q3 2019, Soft Gel capabilities and timing thereof, the manufacturing and supply of vapourizers and timing thereof, future cannabis product innovation, growing demand for specialty concentrate based consumer end products, broadening global distribution, completion of MediPharm Labs Australia’s facility and timing thereof, and the expected processing capacity of the Australian facility. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the inability of MediPharm Labs to obtain adequate financing; the delay or failure to receive regulatory approvals; and other factors discussed in MediPharm Labs’ filings, available on the SEDAR website at www.sedar.com. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, MediPharm Labs assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.Back to News