Medipharm Labs Corp (OTCMKTS:MEDIF) stock has been on the radar within the cannabis industry with a gain of over 250% so far in 2019. In fact, the stock has gained almost 35% since the beginning of this month. Now let’s discuss in detail about the recent developments.
The Supply Agreement With Cronos
On May 14 MediPharm Labs Corp (OTCMKTS:MEDIF) and Cronos Group Inc. (NASDAQ: CRON) announced a supply agreement that will see MediPharm supply Cronos with private label cannabis concentrate worth $22.3 million for over 18 months.
The deal could potentially reach $44.65 million in the next two years when renewal and other purchase options are factored. The companies have equally signed a multi-year deal that will see Cronos supply MediPharm with bulk cannabis so that it can fulfill its processing potential.
The “Bulk Resin Supply Agreement” will grant Crono’s subsidiary Peace Naturals opportunity for additional cannabis concentrate of about $18 million. However, that right will be subject to availability of the concentrate from MediPharm. There is an option of extension that will offer Peace Naturals the option of adding $6 million worth of supply for 6 months and an extra $6 million supply that will bring the total to $60 million.
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MediPharm CEO, Patrick McCutcheon stated that they were delighted to partner with Cronos to launch their new products. He added that the company will support Cronos in terms of expertise and Extraction assets so that it can meet the growing demand.
Q1 2019 results and milestones
On May 10, MediPharm announced its Q1 2019 financial results in which it reported that the company had generated $22 million in revenue which is a 115% sequential quarter increase. The company posted a gross profit of $6.9 million and a 31% gross margin. Its adjusted EBITDA was $4.3 million marking a 102% increases over Q4 2018 and a 20% margin. Net loss for the quarter was around $573,000.
Other milestones reported include over 5 million of dried flower that was acquired in the last two weeks of the quarter.
The CEO indicated that the company continues to demonstrate robust growth and their next steps include topicals, Vaporized items, distillate and white label solutions. Sign-up for continuing coverage on shares of $MEDIF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $MEDIF, either long or short, and we have not been compensated for this article.