MediPharm Labs Improves Domestic Sales Gross Margin with Termination of Shelter Cannabis Brands Royalty Agreement
- Termination of royalty agreement improves gross margin and provides flexibility for investment in driving sales.
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- MediPharm Labs and Shelter Cannabis Brands have terminated their royalty agreement with a one-time cash payment.
- Agreement includes the elimination of ongoing royalty payments, for a one-time lump sum payment.
Under the existing Asset Purchase Agreement, executed in March 2022, MediPharm Labs purchased the IP of Shelter Cannabis Brands. This IP has been focused in market on Wildlife Cannabis domestic dry flower and pre-roll products that are manufactured and distributed via the MediPharm sites.
This supplementary agreement allows for a significant improvement in this product line's gross margin, which will provide flexibility for the Company to further invest in the brand to drive sales, as it continues on the path to profitability. In the last year, MediPharm has made significant improvement in its adjusted gross margin. In the last reported quarter, Q2 2023, this was approximately
The Company appreciates the work done by the previous owners in creating the Shelter Cannabis and Wildlife brands, and their support and flexibility through the transition of the brands to MediPharm.
MediPharm continues to review every product category and selling channel to optimize margins and streamline business operations to attempt to achieve the Company goal of profitability.
Founded in 2015, MediPharm Labs specializes in the development and manufacture of purified, pharmaceutical-quality cannabis concentrates, active pharmaceutical ingredients (API) 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 for delivery of pure, trusted and precision-dosed cannabis products for its customers. MediPharm Labs develops, formulates, processes, packages and distributes cannabis and advanced cannabinoid-based products to domestic and international medical markets.
In 2021, MediPharm Labs received a Pharmaceutical Drug Establishment License from Health Canada, becoming the only company in
In 2023, MediPharm acquired VIVO Cannabis Inc. which expanded MediPharm's reach to medical patients in
Website: www.medipharmlabs.com
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, significant improvement in gross margin on various product lines, providing flexibility for the Company to further invest its brands to drive sales, continuing on a path to profitability. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the inability of MediPharm Labs to obtain adequate financing; the delay or failure to receive regulatory approvals; and other factors discussed in MediPharm Labs' filings, available on the SEDAR website at www.sedar.com. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, MediPharm Labs assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.
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SOURCE MediPharm Labs Corp.
