MediPharm Labs Corp (CVE:LABS), the cannabis oil producer, continues to go from strength to strength and has reported a strong first quarter, which showed a 115% increase in revenue versus the fourth quarter of 2018.
Founded in 2015, the group is a top tier Canadian cannabis group, and was the first firm in the country to become a licensed producer for cannabis oil production without first receiving a cultivation license.
Revenue in the period that ended March 31 came in at $22 million, double the preceding quarter. The net loss narrowed considerably to $573,000 versus a loss of $3,542 in the previous three months.
The quarter ending in March saw significant capital investment to increase the scale of the group's operations to enhance automation, increase throughput capacity and new equipment for diversified product lines including distillates, vapeables, softgel caps and bottled cannabis oil, the firm said.
CEO Patrick McCutcheon said the numbers underlined the firm's "ability to convert revenue into positive operating cash flow – a key milestone achieved less than five months after receiving our sales licence."
He added that “our very strong start to the year included signing our fifth, three-year tolling agreement, with TerrAscend Corp., and completing two new private label supply agreements in the quarter, raising the total potential value of our private label sales agreements to in excess of $85 million over a 15-month period from December 2018. This strong sales momentum continued well into the second quarter, with several new agreements in process and a healthy pipeline beyond those.”
Looking ahead, McCutcheon said in anticipation of the expanded legalization this fall, the firm is advancing its distillate and white label solutions platforms to enhance the company's position for vapeables, edibles and topicals as it expects the market and consumer demand to significantly increase.
Shares in Toronto on Thursday closed up 10.43% to $6.35.