This week, MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ) reported a major milestone and we believe the escalating tensions between Russia and Ukraine impacted how the market responded to the development.

During the last two years, MediPharm has been in the middle of a major transformation and became highly focused on the pharmaceutical side of the cannabis industry. A few years ago, we visited the state-of-the-art EU good manufacturing practice (GMP) processing facility and left the meeting feeling confident in the future of the business.

A Cannabis Biotech Execution Story that is Flying Under the Radar

Although the stock price has been under substantial pressure (along with the rest of the cannabis sector), the business has advanced and we believe it is quickly approaching an inflection point.

Last week, MediPharm completed a US Federal Drug Administration (FDA) Drug Master File (DMF) for pure natural cannabinol (CBD) active pharmaceutical ingredients (API). According to Prohibition Partners, the cannabis-based drug opportunity is projected to be a $25+ billion (USD) market by 2025 and we are favorable on the potential for MediPharm.

The DMF will allow the company to supply approved APIs to pharmaceutical companies that are conducting late-stage research. According to Prohibition Partners, there are more than 20 novel cannabinoid-based therapies that are currently in the late-stages of the research process. Each of these therapies require pharmaceutical approved APIs and MediPharm has already shipped GMP grade CBD to multiple established pharmaceutical companies for development purposes.

An Operator With Significant Growth Catalysts

Last year, MediPharm received a Drug Establishment License (DEL) from Health Canada which represented a major milestone for the business. With the license, the company became the only business in North America to hold a domestic GMP License for the extraction of natural cannabinoids. We believe the developments puts MediPharm is a special category of cannabis businesses and consider this to be one of the most misunderstood opportunities in the sector.

Going forward, MediPharm can use the DEL to register APIs with the FDA for commercial opportunities in pharmaceutical development, novel drugs and generic drugs. We consider this to be a core pillar of the story because the advancement of the business has incrementally increased the size of MediPharm’s total addressable market (TAM).

According to a report from the FDA in the fourth quarter of 2021, MediPharm is the only Canadian company that has been approved to use CDB by the FDA and the second natural CBD DMF at commercial scale in North America. We believe this further differentiates MediPharm from its competitors and consider this aspect of the story to be underappreciated by the street.

At current levels, we believe that MediPharm has a favorable risk-reward profile and a compelling valuation. The company owns valuable IP and is executing on high-profile projects which provide it with substantial potential growth catalysts and believe our readers should be aware of the opportunity.

If you are interested in learning more about how MediPharm is levered to some of the most attractive vertical of the cannabis value chain, please send an email to support@technical420.com with the subject “MediPharm: A Leading Cannabis Biotech Operator” to be added to our distribution list.

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.