Canadian-based medical cannabis company MediPharm Labs Corp. reported a 67% increase in revenue in the first three months of 2024 compared to the same period in 2022 but still had a $3.7 million operating loss for the quarter.
Adjusted EBITDA also improved by 70% from Q1 2023, but was still a loss of $949,000. Despite these losses, the company reports a strong balance sheet with $17 million in cash as of March 31, 2023, noting that its losses have been declining nearly every quarter over the past two years.
Greg Hunter, CFO of MediPharm Labs, noted that “Q1 2024 was another step in the right direction towards profitability and becoming cash flow positive. Our revenue and adjusted EBITDA were both the highest in over 3 years. Revenue was $9.8 million or 67% higher than prior year and adjusted EBITDA loss was $0.9 million, which is $2.1 million better than prior year. Our cash burn was approximately $1 million, resulting in an ending cash balance of $17 million with less than $3 million of debt. MediPharm is in a strong financial position to capitalize on our strong suite of licences, global customer contracts, and assets as we strive for profitability in 2024.”
MediPharm Labs’ revenue for Q1 2024 was $9.8 million, with a gross profit of $2.6 million.
In Q1 2024, the company’s medical cannabis sales in Australia were $1.8 million, a 64% increase from the previous quarter, primarily due to MediPharms Labs’ GMP vape sales. In a conference call discussing their results, a company representative said that there are several non-compliant vapes on the market in Australia that are not meeting these GMP demands.
In Australia, medical cannabis is governed under legislation called TGO93, explains MediPharm Labs President Keith Strachan in an email to StratCann. In March 2023, Australia made a change to that legislation, requiring all medical cannabis imports after July 1, 2023 to meet GMP manufacturing requirements.
Although this change did result in many vapes being taken off the market in Australia, Strachan says that 10 months later there are still some non-compliant vapes in the market that he anticipates will be handled through industry and government oversight.
“This is a result of existing inventory shipping to Australia prior to July 1, 2023 and instances where we see a Canadian, international or Australian manufacturer with GMP certification taking a finished good and “GMP”ing it by passing it through their licence,” says Strachan.
“The first non-compliant category of just existing inventory will be solved over time. The second category we see being solved with an Australian government and industry dependent solution.”
MediPharm has sold into 10 international markets, including Australia, Germany, and Brazil.
MediPharm is also expecting recent changes to Germany’s cannabis legislation to help continue driving international sales. The company’s sales of medical cannabis into the German market were $1.4 million, a 36% increase from the previous quarter. The majority of these sales (70%) were non-flower cannabis products, including oil, CBD isolate, and dronabinol, a synthetic form of THC.
MediPharm’s Beacon Medical GMBH facility in Potsdam, Germany, also hosted a successful audit at its German office in March, which allowed for the continued import, manufacturing and release of cannabis products. Beacon Medical is a wholly owned subsidiary of MediPharm Labs and holds several German GMP medical cannabis licences to import, wholesale, and distribute GMP cannabis products.
This audit was followed by EU GMP renewal inspections at their Canadian sites. MediPharm now has 14 product registrations under the Beacon brand in Germany, up from five in the previous quarter. All of Medipharm’s German cannabis sales are supported by its manufacturing sites in Barrie and Napanee, Ontario.
MediPharm is also the only purpose-built cannabis facility to have been inspected by the US FDA. The company holds a current Drug Establishment Licence from the US agency and has been referenced in US FDA Investigational New Drug Applications, an Abbreviated New Drug Application, and a Drug Master File. The Company has also sent several cannabis oil shipments for clinical trials that are DEA approved.
In their recent year-end results for 2023, the company reported a net operating loss of $18.3 million, down from $29.5 million in the year prior. Loss on adjusted EBITDA in 2023 was $10.2 million, compared to a loss of $20.6 million in 2022.
Founded in 2015, MediPharm is a pharmaceutical company specializing in “precision-based cannabinoids,” and supplies the medical and non-medical markets in Canada with their Canna Farms and Harvest Medicine brands from their 2023 acquisition of Vivo Cannabis.
The company also supplies the Australia direct-to-patient and EU medical cannabis markets.
Editor’s note: This article has been edited to include comments from MediPharm Labs President Keith Strachan.
Featured image via MediPharm Labs
