Medipharm Labs (TSXV: LABS) appears to be following in the footsteps of competitor The Valens Company (TSX: VLNS), albeit with a delay of several years. The former third party cannabis processor this morning revealed that it will be stepping into the branded recreational flower and cannabis pre-roll market via an IP purchase.
The company has acquired all the intellectual property of Shelter Cannabis Brands, a well known and respected brand that recently closed its doors. The company closed its doors in early February, after announcing the close on the 25th of January. The closure is believed to be related to thin margins within the medical market.
The purchase by Medipharm is said to include the entire IP portfolio of Shelter, which includes cannabis dried flower and pre-roll products, trademarks, marketing assets, provincial listings, and manufacturing know-how. Also included is the Wildlife and Craft brands, enabling the company to step into the flower and pre-roll markets which it previously had no presence in.
Production of the Shelter products is expected to leave its Saskatchewan roots, with production now to occur at Medipharm’s facility in Barrie, Ontario.
The transaction is said to be non-dilutive and entirely performance base, with compensation to consist of a royalty based on future Shelter Cannabis sales.
“We are very excited by the opportunity that MediPharm has created for our brands to live on in the Canadian recreational market. After a successful journey, Shelter and Wildlife have made a lasting impression which MediPharm will now take ownership of and continue to grow,” said Shelter CEO Michael Nederhoff on the announcement.
Shipments of Medipharm-originated Shelter products are expected to begin in the second quarter of 2022.
Medipharm Labs last traded at $0.15 on the TSX Venture.
Information for this briefing was found via Sedar and MediPharm Labs. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
