MediPharm Labs Secures 100% Ownership of its Australia Subsidiary, Poised for New Wave of Global Medicinal Cannabis Growth
TORONTO, Sept. 28, 2020 (GLOBE NEWSWIRE) -- MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE:MLZ) (“MediPharm Labs” or the “Company”) a global leader in
specialized, research-driven pharmaceutical-quality cannabis extraction, distillation and derivative products, today announced it has entered into a share sale and purchase agreement (the “Buyout
Agreement”) with its local Australian partner to acquire its 20% ownership interest in the Company’s 80%-owned subsidiary MediPharm Labs Australia. Upon closing of the Transaction, MediPharm Labs
Australia will be a wholly-owned subsidiary of the Company.
“Since our founding, MediPharm Labs Australia has been a cornerstone of our strategy to develop a multi-jurisdictional, GMP-certified production capability chain to service worldwide medicinal, wellness and adult-use markets,” said Pat McCutcheon, CEO, MediPharm Labs. “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. 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.”
Under the Buyout Agreement, MediPharm Labs will pay consideration of approximately $3.2 million comprising a mix of 37.5% cash to be paid in three instalments over an 18 month period and 62.5% MediPharm Labs common shares priced based on the 5-day VWAP on the TSX (the "Transaction"). The common share portion of the consideration will be subject to a twelve-month lock-up.
Poised for New Wave of Global Medicinal Cannabis Growth
The Company’s Australian facility was certified by the Therapeutic Goods Administration (“TGA”) as meeting the GMP standard and secured a Licence to Manufacture Therapeutic Goods in May 2020. As the Company’s Canadian facility was TGA GMP certified in late 2019, MediPharm Labs has created a global pharmaceutical-quality supply chain that is qualified to serve new emerging medical markets internationally. Since the end of 2019, MediPharm Labs Australia has signed a number of significant domestic and international customer supply agreements and achieved revenue of $625,000 in its first month of operations from the shipment of formulated CBD and THC oils to its customers. These shipments were the product of synergies between MediPharm Labs’ Canadian and Australian supply chain made possible by a large shipment of finished products and bulk oil from the Company’s GMP-certified facility in Barrie, Ontario to Australia. The Company intends to continue taking advantage of its internal supply pipeline on a strategic basis as it targets new supply agreements to expand its international market share.