Medipharm Labs (TSX: LABS) and Cronos Group (TSX: CRON) (NASDAQ: CRON) have entered into their second manufacturing agreement of the year. Under the new multi year agreement, Medipharm is to fill and pack vaporizor devices for Cronos Group’s recreational brand Cove, pending approval from Health Canada.
The white label agreement is for a term of two years with an option for renewal. However little details were provided by the two firms, with no indication as to the anticipated dollar value of the transaction, whether it was an exclusive transaction, or how many devices are anticipated to be filled and packaged by Medipharm Labs on an annual basis.
By leveraging our specialized expertise, technology and industrial scale vape filling capabilities, we will assist Cronos Group in delivering high quality, purity assured and Health Canada approved, derivative products further advancing their industry leading reputation and enhancing the supply chain in this important new category.
Pat McCutcheon, CEO of MediPharm Labs
The lack of details for the recently signed manufacturing agreement is in stark contrast to the agreement announced in May, which is for an anticipated $30 million over the first 18 months. That agreement has the option to expand to $60 million via certain renewal and purchase options included within the transaction. The initial manufacturing agreement was for bulk resin supply as well as tolling.
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The latest agreement is subject to Health Canada’s approved of the “recreation 2.0” vaporizer devices.
Medipharm Labs closed yesterdays session at $4.93 on the Toronto Stock Exchange.
Information for this briefing was found via Sedar, Medipharm Labs and Cronos Group. 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.
