Medipharm Labs (LABS.T) is acquiring the remaining 20% of Medipharm Labs Australia. When the transaction closes, Medipharm Labs Australia will become a wholly owned subsidiary of the company, according to a press release.
The buyout agreement has Medipharm Labs paying approximately $3.2 million, comprising a mix of 37.5% cash in three instalments over a year and a half, and the rest in company shares based on a five-day volume-weighted average price on the TSX.
“Since our founding, Medipharm Labs Australia has been a cornerstone of our strategy to develop a multijurisdictional, GMP-certified production capability chain to service worldwide medicinal, wellness and adult-use markets. Now a wholly owned subsidiary, Medipharm Labs Australia will continue to represent a strategic segment of our global supply chain and a highly sought-after, valuable and irreplaceable asset that differentiate us in the marketplace,” said Pat McCutcheon, chief executive officer, Medipharm Labs.
The company’s facility was certified by the Therapeutic Goods Administration (TGA) as having met the requirements for good manufacturing practices (GMP) standards, and therefore secured a license to manufacture therapeutic goods back in May, 2020. The company’s Canadian facility got their TGA GMP in late 2019, and have since created a global pharmaceutical-quality supply chain, qualified to serve medical markets on an international level.
“With our Australia GMP-certified manufacturing assets and licences from the Therapeutic Goods Administration, we are perfectly positioned for the next wave of growth in global cannabis markets as Medipharm Labs Australia continues to serve as a door-opener to sophisticated new pharma accounts and new medically focused cannabis companies in emerging international jurisdictions,” said McCutcheon.
Medipharm Labs Australia has signed into domestic and international customer supply agreements and made $625,000 in revenue in its first month of operations from shipping formulated CBD and THC oils to customers. These shipments came about as part of the relationship between Medipharm Labs’ Canadian and Australian supply chain, largely made possible by a shipment of finished products and bulk oil from their GMP-certified facility in Barrie, Ontario, to Australia. The company will continue to capitalize on its supply pipeline as it seeks out new supply agreements so it can expand its international market share.