FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “MediPharm Labs Secures 9,000 KG of Dried Cannabis Adding Substantial Private Label Cannabis Extract Production.”
MediPharm Labs Corp. (TSX-V: LABS) (OTCQX: MEDIF) (FSE: MLZ) a global leader in specialized, research-driven cannabis extraction, distillation, purification and cannabinoid isolation, is pleased to announce that its wholly owned subsidiary, MediPharm Labs Inc., has entered into purchase agreements to secure a substantial 9,000 KG of dried cannabis supply from multiple cultivators in the last three weeks in June. In addition to MediPharm Labs’ ongoing procurement of cannabis biomass for existing contracts, this bulk purchase is expected to contribute to increased production for future sales and position the Company to meet the mandatory minimum monthly volume requirements to win new large white-label contracts.
Founded in 2015, MediPharm Labs has the distinction of being the first company in Canada to become a licensed producer for cannabis oil production under the ACMPR without first receiving a cannabis cultivation licence. This expert focus on cannabis concentrates from being built to cGMP (current Good Manufacturing Practices) and ISO standard-built clean rooms and critical environments laboratory, allows MediPharm Labs to produce purified, pharmaceutical-like cannabis oil and concentrates for advanced derivative products.
Cannabis has emerged as a global and disruptive market over recent year due to a group of the countries moving towards legalization. Notably, Canada’s legalization of adult-use marked a historic milestone within the cannabis industry as it became just the second country and the first G-7 nation to fully legalize cannabis. However, most analysts have diverted their attention towards the U.S. because of the opportunities available within the region. The U.S. has not federally legalized cannabis as of yet but has granted states their own jurisdiction whether to legalize cannabis or not. Now, more than half of the U.S. has legalized cannabis for medicinal applications, while a little over a fifth have legalized its recreational use. While the U.S. has not federally legalized either medical or recreational cannabis, it is still the largest market within the global market space. The U.S. remains as the global cannabis industry driver because of its early adoption, dating back to 1996 when California became the first state to legalize medical cannabis. Moreover, Colorado and Washington made remarkable progress when the two states became the first to ever legalize recreational cannabis in 2014. Since then, the two states have collectively delivered billions of dollars annually off of cannabis sales. Recently, Illinois became the 11th state to legalize cannabis, joining states such as California, Vermont and Michigan in a cohort growing partnership. With Illinois’ passage, more states, including New Jersey and New York, are expected to follow in the near future. Barclays analysts have speculated that if the U.S. cannabis market was legalized today, it could be worth roughly USD 28 Billion. Furthermore, Barclays predicts that the market will grow to USD 41 Billion by 2028 on a pre-tax basis. Barclays compiled the data from a 2017 survey that indicated that approximately 26 million Americans above the age of 12 “were users of marijuana,” or nearly 10% of the total U.S. population.
The U.S. cannabis market was primarily driven by the sharp rise in users among the ages of 18 to 25. However, other age groups have witnessed a steady increase, particularly among the older generation. Among the younger generation, many consumers may be using cannabis for recreational purposes, while on the other hand, the older generation may prefer cannabis for its therapeutic benefits. Nevertheless, both demographics are seeing a large demand for newer products. For instance, concentrates have become increasingly popular due to their potency and immediate effectiveness. Colorado has witnessed its flower sales substantially fall since it legalized adult-use back in 2014. During its first year, flower sales dominated 67% of Colorado’s total cannabis sales. However, in 2018, flower sales declined to 44% while the concentrates market filled the gap, growing from 15% to 31%. Concentrates are products made from the cannabis plant itself, but which have been thoroughly processed in order to isolate the potent and desirable parts of the plant. Predominantly, oils have grown to become one of the most popular methods of cannabis consumption as they can come in various forms such as CBD oil, THC oil, vaporizer cartridges, and consumable oils. Many consumers are beginning to prefer oils because of their potency as well as versatility. Primarily, frequent and medical users are mainly attracted to stronger products and while cannabis bud potency can usually range from 10% to 25% THC levels, concentrates are typically made to range from 50% to 80%, with some exceeding limits of 90% THC. “Legalization brings a lot of opportunities, including many that are unexpected. One of the biggest areas for expansion is cannabis oil,” according to Scott McGovern, Founder of Blocklr & Growth Nuts. “Despite the rising popularity of cannabis oil, it’s still a relatively undeveloped market because of how it’s produced. Technically, cannabis oil is what you get when you extract a concentrated oil from the marijuana or hemp plant. THC and CBD oil are technically in the same category because they’re produced with the same type of equipment.”
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