MediPharm Labs Corp. (TSXV: LABS) (OTCQX: MEDIF)
(“MediPharm Labs”) a leader in specialized,
research-driven cannabis extraction and cannabinoid isolation, is
pleased to announce that it has entered into a multi-year supply
agreement with
Cronos Group Inc. (NASDAQ:CRON) (TSX:CRON)
(“Cronos Group”). MediPharm Labs will supply Cronos Group
with approximately $30 million of high-quality private label
cannabis concentrate over 18-months, and, subject to certain
renewal and purchase options, potentially up to $60 million over
24-months. In addition, Cronos Group has selected MediPharm
Labs’ state of the art extraction facility in Barrie, Ontario, as a
preferred partner to fulfill certain of its processing needs, under
a separate tolling arrangement.
“With the continued evolution of the Canadian
cannabis industry, we are excited to partner with Cronos Group in
their journey to launch new products and secure MediPharm Labs’
high-quality private label supply of concentrates,” said Patrick
McCutcheon, CEO, MediPharm Labs. “We look forward to supporting the
team at Cronos Group with our specialized extraction capabilities
and expertise to address a rapidly expanding cannabis market and
growing consumer demand.”
“As the industry develops and matures, we see
opportunity to work with companies like MediPharm Labs that provide
specialized, high-quality services and inputs for our products,”
said Mike Gorenstein, CEO of Cronos Group. “Along with our internal
capabilities, we are pleased to be working with MediPharm Labs to
bring great products to consumers in anticipation of the derivative
market launching in Canada this fall.”
Bulk Resin Supply Agreement
Under the terms of the Bulk Resin Supply
Agreement (the “Agreement”) dated May 13, 2019, Peace Naturals
Project Inc. (“Peace Naturals”), a wholly-owned
subsidiary of Cronos Group, will purchase a minimum of
approximately $30 million of cannabis concentrate from MediPharm
Labs Inc. (“MediPharm”), a wholly-owned subsidiary
of MediPharm Labs, over the course of 18-months. Peace Naturals
will also have a right of first offer to purchase an additional
approximately $18 million of cannabis concentrate over the same
period, subject to the availability of such supply from MediPharm.
The Agreement includes an option for a mutual extension where, if
extended, Peace Naturals would additionally purchase a minimum of
approximately $6 million over 6 months, and would have a right of
first offer to purchase an additional approximately $6 million over
the same period, subject to the availability of such supply from
MediPharm, bringing the total potential aggregate value of the
Agreement to over $60 million to the end of April, 2021.
Cannabis Concentrate Program
Agreement
Under the terms of the Cannabis Concentrate
Program Agreement (the “Tolling Agreement”) dated May 13, 2019,
Peace Naturals will supply bulk quantities of dried cannabis to
MediPharm for processing on a fee for service basis into bulk resin
or other premium cannabis oil derivative products to be sold by
Cronos Group under its brands. The Tolling Agreement has a two-year
term.
About Cronos Group Inc.
Cronos Group is an innovative global cannabinoid
company with international production and distribution across five
continents. Cronos Group is committed to building disruptive
intellectual property by advancing cannabis research, technology
and product development. With a passion to responsibly elevate the
consumer experience, Cronos Group is building an iconic brand
portfolio. Cronos Group’s portfolio includes PEACE NATURALS™, a
global health and wellness platform, and two adult-use brands,
COVE™ and Spinach™. To learn more about Cronos Group and its
brands, please visit: www.thecronosgroup.com;
www.peacenaturals.com; www.covecannabis.ca;
www.spinachcannabis.com
About MediPharm Labs Corp.
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. MediPharm Labs has invested in an
expert, research-driven team, state-of-the-art technology,
downstream extraction methodologies and purpose-built facilities to
deliver pure, safe and precisely-dosed cannabis products to
patients and consumers. MediPharm Labs’ private label program is a
high margin business for the company, whereby it opportunistically
procures dry cannabis flower and trim from its numerous product
supply partners, to produce cannabis oil concentrate products for
resale globally on a private label basis.
Through its subsidiary, MediPharm Labs Australia
Pty. Ltd., MediPharm Labs has also completed its application
process with the federal Office of Drug Control to extract and
import medical cannabis products in Australia.
For further information, please
contact: Laura Lepore, VP, Investor Relations Telephone:
705-719-7425 ext 216 Email: investors@medipharmlabs.com
Website: www.medipharmlabs.com
NEITHER THE TSX VENTURE EXCHANGE NOR ITS
REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE
POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
INFORMATION:
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, among other things, statements regarding
new product launches, expanding cannabis market, growing consumer
market, the establishment and licensing of operations in Australia,
and expectations that the transactions pursuant to the Agreement
and the Tolling Agreement will be completed as planned.
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 Lab’ 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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