Canadian cannabinoid firm MediPharm Labs Corp. mentioned it has offered its Napanee, Ontario manufacturing facility to Kensana Well being, a biotechnology agency specializing in phytopharmaceuticals, for roughly $4 million (CA$5.5 million) in money.
The transaction, anticipated to shut by Jan. 1, 2025, consists of the sale of MediPharm’s subsidiary ABcann Medicinals, which owns the constructing, land, gear, and related enterprise license.
Each corporations make CBD and medical-grade THC merchandise. The MediPharm Ontario facility produces pharma-grade CBD and THC concentrates, energetic pharmaceutical components, and by-product merchandise, together with oils, smooth chews, capsules, and vapes, primarily for the medical market.
Provider deal
A strategic partnership shaped alongside the sale will see Kensana Well being as a key provider of services to assist MediPharm’s worldwide manufacturers and buyer base.
MediPharm CEO David Pidduck mentioned the deal displays the corporate’s technique to streamline operations by monetizing non-core belongings whereas additionally securing a strategic provide and providers settlement.
The Napanee facility obtained Good Manufacturing Practices (GMP) certification from Brazil’s Nationwide Sanitary Surveillance Company earlier this 12 months
Kensana Well being, primarily based in Ontario, Canada, is a biotechnology and plant-based drugs producer. It mentioned acquisition of the Napanee facility helps its ongoing U.S. Meals and Drug Administration (FDA) registration course of for a topical continual wound remedy.
Trying overseas
Kensana mentioned it plans to pursue regulatory approvals in Europe, the UK, Canada, the Center East, the Pacific Rim, and Australia.
MediPharm continues to battle with declining revenues and mounting losses which have bedeviled your complete CBD sector over the previous few years. The corporate reported web income of $9.8 million for Q3 2024, with a gross revenue of $3.1 million however a web lack of $2.8 million. Income elevated by 15% in comparison with $8.5 million in Q3 2023, whereas the online loss improved from $4.3 million.
Nearly all of Q3 income got here from the Canadian market ($6.2 million), up from $5.9 million in the identical quarter final 12 months. Different gross sales included $2.5 million in Australia (up from $2.2 million), and $1 million in Germany (up from $319,000).
The corporate reported revenues of $20.66 million in 2023, after posting $23.01 million in 2022 and $26.39 million in 2021. Losses in these years had been $21.77 million, $19.07 million, and $15.63 million, respectively.
Based in 2015, Barrie, Ontario-based MediPharm makes pharmaceutical-quality hashish concentrates, energetic pharmaceutical components (APIs), and superior by-product merchandise.
MediPharm’s product portfolio consists of CBD isolates, formulated oils, smooth chews, capsules, and vapes, offered on home and worldwide medical markets. It owns the VIVO Hashish Inc., medical hashish e-commerce platforms and mentioned it has worldwide operations in Australia and Germany.
Kensana Well being, a personal Canadian firm, develops proprietary and patent-protected phytopharmaceutical formulations.
Dismal share worth
MediPharm’s inventory, traded on the Toronto Inventory Trade, is presently at CAD$0.23 (23 Canadian cents). The inventory’s historic excessive was CAD$5.00 in 2019.
MediPharm is struggling to proper itself after the CBD market was suffering from oversupply, regulatory uncertainty, and falling shopper confidence, circumstances which have killed off many CBD corporations.
A rush to domesticate hemp flowers for CBD led to a glut of uncooked supplies, inflicting costs to plummet and making it exhausting for producers to remain worthwhile. In the meantime, the shortage of clear, constant laws, particularly within the U.S., created confusion for companies navigating a fancy authorized panorama. This, mixed with restricted scientific proof to again the well being claims of CBD, led to shopper skepticism and restrained demand. Because the market grew to become saturated with competing manufacturers, many companies lacked the sources to outlive, resulting in a wave of closures and bankruptcies. Investor confidence additionally waned because the broader hashish sector slowed, making it more durable for CBD corporations to safe essential capital.
Moreover, many corporations struggled to diversify their merchandise past oils and tinctures, additional limiting their capacity to face out in a crowded market.
All hashish hit
The medical marijuana enterprise has additionally skilled softness lately on account of regulatory challenges, worth pressures from oversupply, and slower-than-expected affected person progress. Many markets, notably in Canada and the U.S., have seen a shift of sufferers towards leisure hashish whereas market saturation and intense competitors have made it more durable for corporations to distinguish and preserve profitability.
The latest sale is simply the most recent by MediPharm Labs within the firm’s ongoing effort to streamline its operations.
In 2024, the corporate offered its Canna Farms facility in Hope, British Columbia, following its acquisition of Canna Farms by means of the acquisition of Vivo Hashish in 2023. The power, which had been used for hashish cultivation and processing, was closed on account of declining hashish costs and operational inefficiencies.
In 2022, MediPharm additionally offered its Australian manufacturing facility to an area hashish firm. The corporate mentioned on the time that the sale was a part of MediPharm’s broader technique to streamline operations and refocus on increasing its presence in key markets like Europe.
