MediPharm Provides Update on its Liquidity

MediPharm Labs provides investors with an update on its balance sheet, liquidity, and plans for legalization 2.0.

MediPharm Labs Corp. (TSX: LABS) a global leader in specialized, research-driven, pharmaceutical quality cannabis extraction, distillation, and derivative products, today provided an update on its aggregate liquidity position, which supports plans for domestic and international growth, and announced it has fulfilled further Cannabis 2.0 product shipments to Canadian provincial distributors in January 2020.

The Company continues to maintain a very strong balance sheet and had an unaudited aggregate liquidity position of approximately $67 million as at December 31, 2019.

"With our strong balance sheet, a healthy aggregate liquidity position, supply of pharmaceutical-quality products and the fact that the Cannabis 2.0 market is opening, we are well positioned to support our customers in Canada as they ramp up sales, as well as new potential customers in emerging international markets," said Pat McCutcheon, CEO, MediPharm Labs.

In Canada, as the consumer market begins to achieve its full potential, we have remained disciplined in shaping our committed wholesale and service agreements based on our credit policies and sizeable upfront payments.

Pat McCutcheon, CEO, MediPharm Labs.


As noted in the Company's press release dated January 24, 2020, the Company filed a statement of claim against one of its customers after negotiations to settle a past due amount proved unsuccessful. To provide additional background, the Company considers this claim to be a singular event and not representative of the strong liquidity of its customer base.

As at December 31, 2019, the Company's unaudited past due balance was approximately $8.6 million, of which $7.7 million was related to the statement of claim. The majority of the other remaining outstanding balance has already been collected as of today. The Company is pleased to note that it expects to collect its existing receivables in the normal course of business and does not perceive any additional credit risk on its remaining customer base due to the high credit worthiness of these customers.

Increasing Cannabis 2.0 Shipments

In late December 2019, the Company commenced shipments of Cannabis 2.0 products into three of Canada's provincial jurisdictions – British Columbia, Manitoba and Saskatchewan. Following initial shipments in December, the Company received multiple purchase re-orders.

Because of the nature of its business, MediPharm Labs is also able to supply B2B customers serving four product categories recognized under Schedule 4 of the Cannabis Act: cannabis extracts (for ingestion and Inhalation), cannabis topicals, edible cannabis (beverages and food products) and cannabis oils. This exposure to each cannabis 2.0 product category is another element of the Company's risk-managed plan for diversifying its growth – the primary elements being international expansion and focus on the global medical market.

"As the Canadian market builds on the launch of the next generation of cannabis products, our specialized GMP certified platform and ability to produce a stable supply of pharmaceutical-quality concentrates will continue to position us to support various licensed producers and new upcoming direct to consumer brands launching innovative products," said Pat McCutcheon, CEO, MediPharm Labs.

"Beginning last year, in anticipation of a slower roll-out of Cannabis 2.0 products in Canada, we made the decision to accelerate our international diversification plans and develop our capabilities to partner with international pharmaceutical companies to address an emerging medical cannabis consumer and research market."

Enactment of Cannabis 2.0 federally, and recent moves by the Ontario government to accelerate licence applications from prospective retailers in Canada's largest province are expected to improve product choice and accessibility for consumers as the retail market matures.

To learn more about MediPharm Labs, visit the company HQ here.

Disclaimer: Past performance is not an indicator of future performance.


This could be one of the best investing opportunities of 2020

Legislative changes are blowing through the US, and with it, an ever-increasing number of states legalising cannabis for recreational use.

With the success seen in Illinois, which legalised for adult-use on January 1 and saw products moving off the shelf at an unprecedented rate, this company is primed to take advantage of the booming US recreational market.

They have secured partnerships with the biggest cannabis companies in the US, and their portfolio is second to none.

And with the sector-wide pullback of 2019, this company is now at a bargain-basement price.

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.

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