Medipharm Labs Corp (OTCMKTS: MEDIF) has been on the rise since recently briefly dipping below $2 USD per share, levels the stock has not seen since February of last year. The stock has fallen a long way since it was trading for over $5.50 USD per share back in March of this year.
Medipharm Labs specializes in the production of purified, pharmaceutical quality cannabis oil and concentrates and advanced derivative products utilizing a Good Manufacturing Practices certified facility with ISO standard-built clean rooms. MediPharm Labs has invested in an expert, research driven team, state-of-the-art technology, downstream purification methodologies and purpose-built facilities with five primary extraction lines for delivery of pure, trusted and precision-dosed cannabis products for its customers. Through its wholesale and white label platforms, MediPharm Labs formulates, develops (including through sensory testing), processes, packages and distributes cannabis extracts and advanced cannabinoid-based products to domestic and international markets. As a global leader, MediPharm Labs has completed commercial exports to Australia and is nearing commercialization of its Australian extraction facility. MediPharm Labs Australia was established in 2017. The Company recentlhy reported increased annual processing capacity of 300,000 kg. The Company also has a new customized, 200,000 kg extraction line on-site and available for commissioning once allocated to a licensed room.
Medipharm Labs Corp (OTCMKTS: MEDIF) (TSE: LABS) announced in November its financial results for the three and nine months ended September 30, 2019. Revenue was $43.4 million, a 38% increase over Q2 2019, as the Company expanded its leadership of the Canadian cannabis extraction industry. Gross Profit was $14.8 million, a 30% increase over Q2 2019 and Gross Margin was 34% compared to 36% in Q2 2019 despite lower market-selling prices and increased GMP audit certification costs. Net income before tax was $5.4 million compared to net income before tax of $4.1 million in Q2 2019
The Company’s balance sheet and financial capacity to support growth remained strong, with positive working capital of $87 million and cash and equivalents of $42.1 million at September 30, 2019, as well as unutilized credit under its new facility that closed subsequent to period ending. The Company also filed an application to list its common shares on the NASDAQ Stock Market after period end
“Results from the third quarter marked our fourth consecutive quarter of positive Adjusted EBITDA(1) and revenue growth,” said Patrick McCutcheon, Chief Executive Officer, MediPharm Labs. “Our results are fueled by our expanding private label business, increasing exports and expanding relationships with our growing customer base. During the quarter our team has made great strides towards European GMP and Australian compliance of our facilities and continued to build out our capabilities and capacity across our global platforms in Canada and Australia. These investments will prepare us for a very exciting future as the market and world leader in extraction and white label production.”
“We are on track to surpass the $100-million milestone in revenue this year, which is a remarkable testament to the tireless efforts of the skilled professionals at MediPharm Labs,” said Mr. McCutcheon. “With the completion of the roll-out of our initial white label products in sight, and as the regulated retail distribution system starts to hit stride, we can seize the opportunities that Cannabis 2.0 brings beginning next year.”
On January 31 MediPharm announced receipt of a key importation licence for its Australian business. This licence is a critical step to building the Companys international supply chain that will be used to create additional synergies between MediPharm Labs Canadian and Australian operations. The Company is now positioned to leverage a global supply chain to sell cannabis APIs and finished products to countries across the EU, including Germany, due to a Mutual Recognition Agreement between Australia and the EU.
Since receiving its State Licences for cannabis substances from the Victorian Department of Health and Human Services, and finishing the initial phases of construction of its 10,000 sq. ft. specialized extraction facility in Wonthaggi in December 2019, MediPharm Labs Australia has completed the first of two stages of a TGA Audit (related to its storage facilities and release for supply) and submitted an evidence package in January 2020. The next TGA Audits of its full production capabilities (including laboratory) are expected in the first half of 2020. This positions the facility to receive Australian GMP certification and full production by H2 2020.
Currently trading at a $264mm USD market valuation Medipharm Labs is getting lots of attention from Investors at current price levels. Medipharm Labs is an exciting story developing in small caps – The Company reported revenue was $43.4 million, a 38% increase over Q2 2019 for the three and nine months ended September 30, 2019, as the Company expanded its leadership of the Canadian cannabis extraction industry. We will be updating on Medipharm Labs on a daily basis so make sure you are subscribed to microcapdaily.com so you know what is going on with Medipharm Labs.
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Disclosure: we hold no position in Medipharm Labs either long or short and we have not been compensated for this article.