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MediPharm Signs $26.38M Cannabis Oil Deal

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MediPharm Signs $26.38M Cannabis Oil Deal

Canada-based MediPharm Labs Corp. (OTC: MLCPF) will supply cannabis oil concentrate to an unnamed licensed producer under the terms of a CA$35-million ($26.38 million) deal.

What Happened

Under the terms of the supply agreement, the licensed producer will purchase CA$7.66 million in canabis oil concentrate this month. Over a 12-month period commencing in March, MediPharm will supply a minimum of CA$27 million worth of oil concentrate.

The buyer also has the option to purchase an additional CA$13.5 million worth of concentrate over the same period. 

Why It's Important

The latest deal is the fourth under MediPharm's private label program, under which it buys cannabis flower and trim from supply partners and produces cannabis oil concentrate products that are resold on a private label basis. The four deals signed so far generated have a value of more than CA$85 million in the 15-month period beginning in December, according to MediPharm. 

What's Next

The latest deal — in combination with a previously announced long-term supply agreement with Canopy Growth Corp (NYSE: CGC) — represents less than 10 percent of MediPharm Labs' annual extraction capacity of 150,000 kg.  MediPharm said it's working to expand its annual extraction capacity to 250,000 kilograms and expects to complete the project in the second quarter. 

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Posted-In: cannabis oil Cannabis Oil Supply marijuana MediPharm LabsCannabis News Contracts Markets Best of Benzinga

 

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