Medipharm Labs (LABS.T) closes 2019 strong by tripling their manufacturing capacity

12/30/2019

Medipharm Labs (LABS.T) was given the regulatory nod from Health Canada today to begin producing in its recently expanded area of its specialized manufacturing facility in Barrie, Ontario.

The amendment triples Midipharm’s facility production size, adding 16,746 square feet to round the manufacturing plant out to approximately 25,000 square feet of space, which they will use automated downstream production and packaging, cannabis control and testing, research and development and secure storage to support the fulfillment and distribution of new product format formulations and orders.

“This amendment is an important development and achievement for Medipharm that unlocks the value of our recent investment in advanced capabilities and expanded capacity at a very opportune time. With an increasing focus on our white label business, we can now significantly scale our platform to serve the end-to-end needs of our customers as we fulfill orders for new diversified products under cannabis 2.0,” said Pat McCutcheon, chief executive officer, Medipharm Labs.

Medipharm’s aim with this facility, and all of the Good Manufacturing Practice (GMP) approvals are in, is to enter the international medical market. The facility will facilitate that by allowing Medipharm to grow greater quantities of GMP product, while it moves its non-GMP activities, like filling vape pens, into its newly licensed area.

Canadian manufacturing facility expansion

Medipharm Labs’ phased plan for 2019 included expanding its licensed space and scaling its Canadian operations within its Barrie facility. They were hoping to complete construction prior to applying for the expansion license, and today’s announcement means that Health Canada has given them permission four month after completing construction.

The now-completed first phase of the expansion includes:

  • Five new large manufacturing rooms, including two sizable fire- and explosion-containment rooms (that allow for the handling of solvents) that create scale, provide flexibility in production processes and include capabilities such as automated downstream production and packaging to fulfill end-to-end white label product orders for distribution. Automation equipment qualified by the company’s quality team is on site and expected to be operational in the coming weeks;
  • An expanded state-of-the-art quality control lab to support advanced cannabis product innovation and ensure strict adherence to pharma standards at every step of the process. The lab will be used by the company’s growing research and development team to analyze terpene profiles, cannabis 2.0 products and new formulations. Medipharm will also use the lab for in-house testing of product for release, incoming product verification, process improvement testing and validation;
  • A second secure storage space that more than doubles the company’s current capacity to store dry cannabis and finished goods;
  • Major building infrastructure updates, such as a new mechanical mezzanine for process support equipment and an updated building electrical transformer, to support GMP-compliant-required equipment and future expansions.

Expanding their international footprint has been the company’s aim and trajectory for 2019, and they made some strides towards that earlier this month, when they got the Australian Therapeutic Goods Administration (TGA) told the company that they met GMP requirements to operate there.

“We are executing on a focused plan to increase exports. This important amendment is additive to this strategy and complements other recent developments including receipt of our first GMP certification earlier this month and completion of construction of our Australian manufacturing facility. These initiatives position Medipharm Labs to drive global sales as we address growing international market demand for high-quality pharmaceutical-grade cannabis derivative products,” said McCutcheon.

Medipharm Labs received its certification less than 60 days form its TGA inspection, which had been completed in October. The certificate was issued by Australia’s TGA to permit the company’s Canadian facility to deliver medicinal products to the Australian medical cannabis market, and when the company’s Australian production facility received its GMP certificate, the company would be well-placed to take advantage of a global supply chain to sell cannabis products to countries throughout the European Union, including Germany, courtesy of a mutual recognition agreement between Australia and the EU.

—Joseph Morton

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