August 31st, 2018
Exclusive, Feature Stories, News
Cannabis oils and extracts have quickly become the fastest growing segment of the global cannabis industry. In the United States, cannabis concentrate sales rose more than 50 percent last year, compared to a decline in cannabis flower sales across most markets. In Canada, cannabis extracts have already become more popular than cannabis flower for medical patients — a trend that could accelerate with the legalization of recreational cannabis in October.
MediPharm Labs Inc. has focused exclusively on becoming a leader in cannabis extraction with the most sophisticated and largest extraction footprint in the country. Investors looking for a pure play opportunity in cannabis extraction may want to take a closer look at the company as it prepares to go public soon.
From Flower to Extracts
Health Canada has reported a consistent increase in cannabis oil and extract sales. Between April and December of last year, cannabis flower sales rose 9.2 percent to 2,079 kilograms compared to a 56.7 percent increase in cannabis oil sales to 3,005 kilograms. Inventories of cannabis oil are also much tighter at just 11,140 kilograms compared to 38,927 kilograms for cannabis flower, suggesting that prices could continue to rise.
There are several reasons for these trends:
- Higher Margins – Cannabis extracts create higher margin products than cannabis flower, ranging from recreational edibles to pharmaceutical-grade medical products.
- Longer Shelf Life – Cannabis extracts have a longer shelf life than cannabis flower, which makes them preferable from an inventory standpoint.
- Physician Supported – Many physicians prefer extracts because of the improved safety (no smoke inhalation) and efficacy (more predictable effects with exact dosing).
The Opportunity: Many licensed producers are not very well equipped to produce cannabis oil since they have focused largely on cultivating cannabis flower. While some companies are providing in-house extraction technology to a number of producers, many licensed producers are opting to partner with a third party that is already an expert at extraction. That way, each company can focus on what it does best and maximize its efficiency and returns.
MediPharm’s Purity Focus
MediPharm was the first company in Canada to secure Licensed Producer approval for oils from Health Canada without first receiving a cannabis cultivation license. MediPharm is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification. With the current ability to process over 100,000 kilograms of dried cannabis per year (and expansion plans to go to 300,000 kilograms of dried cannabis per year in its Barrie Ontario operations), the company has the largest cannabis oil production footprint in the country. MediPharm plans to partner with Licensed Producers and other parties to bring both medical and recreational advanced derivative products to market. The company’s extraction methodology results in exceptional purity, offering trust and assurance to end consumers.
Within a month of being licensed, the company secured over 1,000 kilograms in dried cannabis supply contracts and its professional business development team is driving future supply with fixed volume contracts, product-focused partnerships with licensed producers, and one-off bulk purchases. The company is working with licensed producers to manufacture and distribute pharma-grade extract-based products under joint ventures, white-label partnerships, and other agreements.
Management is also focused on building an international presence through its MediPharm Labs Australia Pty. Ltd. subsidiary. The facility will act as an important import hub until Australian domestic patient demand warrants dedicated production activity. With the Australian government’s recent move to legalize medical cannabis exports, the country could become one of the largest players in the global cannabis industry.
The company’s management team is also well-equipped to build long-term shareholder value:
- Pat McCutcheon – President and CEO – Pharmaceutical sales and marketing expert.
- Keith Strachan – Business Development – Healthcare business development expert.
- Ahmed Shehata – General Counsel – Corporate and commercial law expert.
- Martha Smart – Director of Innovation – Pharmaceutical product experience.
- Chris Hobbs – Chief Financial Officer – CPA with finance and compliance experience.
- Chris Talpas – Director of QA – Biomanufacturing and cGMP operations expert.
- Paul Hamelin – Director of Security – Public safety and risk management expert.
- Sybil Taylor – Chief Marketing Officer – CPG and strategic marketing expert.
MediPharm represents a compelling investment opportunity in Canada’s cannabis industry. With the largest extraction operation in the country and a focus on international quality standards, the company is well positioned to partner with leading licensed producers and fulfill a key gap in the industry. Investors looking for a pure-play opportunity in the extracts space may want to take a closer look at the company as it gears up to go public over the near-term.
The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: http://www.cannabisfn.com/legal-disclaimer/
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
MJShareholders.com is the largest dedicated financial network and leading corporate communications firm serving the legal cannabis industry. Our network aims to connect public marijuana companies with these focused cannabis audiences across the US and Canada that are critical for growth: Short and long term cannabis investors Active funding sources Mainstream media Business leaders Cannabis consumers