MediPharm Labs (TSXV:LABS)
Historical Stock Chart
6 Months : From Mar 2019 to Sep 2019
Although often overshadowed by the importance of marijuana retail and branding, cannabis extraction is a vital component of any vertically integrated cannabis company. Not only do in-house extraction operations allow cannabis companies to avoid outsourcing costs, but it also enables the potential for additional revenue streams and more rapid product ideation.
With cannabis edibles, extracts, and topicals expected to be legal in the Canadian market later this year, we examine some of the marijuana industry’s largest cannabis extractors.
Westleaf Inc. (TSX-V: WL) (OTCQB: WSLFF) is a vertically integrated Canadian cannabis company focused on innovative retail experiences and engaging cannabis brands as well as cultivation, production and extraction of cannabis products.
With a flurry of M&A and retail expansion, Westleaf continues to cement its position as a leader in the Canadian cannabis market.
Not only did the company close two of its acquisitions this year —Canndara Canada Inc. (a cannabis retail company with over 50 prospective retail locations across Canada) and Delta 9’s 50% interest in the Delta West extraction facility (a large scale, world class cannabis laboratory currently in development)— but it also opened its first Prairie Records retail store in Warman, Saskatchewan.
The pace of Westleaf’s retail expansion doesn’t seem to be slowing down either. The company was recently chosen as 1 of only 5 town-approved cannabis retail stores in Banff, a scenic Albertan resort town that attracts millions of visitors each year. Located conveniently next to Eddie Burger + Bar—one of Banff’s most popular eateries—Westleaf’s Banff Prairie Records store is expected to open sometime in summer 2019, subject to regulatory approval.
As a result, Westleaf is quickly becoming one of Western Canada’s largest premium cannabis retailers.
While Westleaf is best known for its mission to become Canada’s largest premium marijuana retailer, its recent term sheet with Xabis Inc. strengthens Westleaf’s position as a truly vertically integrated Canadian cannabis company.
Based in Colorado, Xabis is a world leader in the design, construction, and management of cannabis extraction and manufacturing facilities, as well as product development. Led by a team of seasoned business professionals and some of the industry’s foremost chemical and biological PhDs and engineers, Xabis will provide expertise to Westleaf’s 60,000 sq. ft. Delta West cannabis extraction and production facility, now rebranded as The Plant By Westleaf Labs.
Xabis boasts an impressive track record—having designed, built, and operated facilities across 5 U.S. states and developed more than 200 individual cannabis SKUs (ie. oil based oral solutions, gummy edibles, hard pressed tablets). Xabis’ exclusive partnership with Westleaf marks the American firm’s first foray into the Canadian markets.
Designed to include R&D, processing, extraction, manufacturing, and order fulfillment, Westleaf expects that The Plant will be complete in Summer 2019. This provides Westleaf with ample time to refine its portfolio of cannabis derivative products before cannabis edibles are legalized later this year. The company also notes that The Plant can offer a variety of services to generate multiple revenue streams, including white labeling and contract manufacturing services for raw extract and distillation.
MediPharm Labs Corp.
MediPharm Labs Corp. (TSXV: LABS) (OTCMKTS: MLCPF) is a leader in specialized, research-driven cannabis extraction, distillation, purification and cannabinoid isolation.
As the first Canadian LP licensed under ACMPR to focus exclusively on cannabis oil extraction, MediPharm Labs is widely recognized as a pioneer in the field of cannabis extraction. The company already supplies some of the most well-known names in Canadian cannabis, including Canopy Growth, Emerald Health Therapeutics, The Supreme Cannabis Company, and others.
MediPharm Labs’ 70,000 sq. ft. extraction facility is capable of processing 150,000 kg of dry cannabis flower per year, making it one of Canada’s largest licensed extractors. It’s a title that’s likely to stick—considering that the company expects to increase this capacity to 250,000 kg of dry cannabis per year by Q2 2019. With capacity expected to grow by over 60% this year, MediPharm Labs has projected $85 million in revenue over the course of 15 months starting February 2019.
Valens GroWorks Corp. (CSE: VGW) (OTC: VGWCF) is a multi-licensed, provider of cannabis products and services focused on various proprietary extraction methodologies, distillation, cannabinoid isolation and purification, as well as associated quality testing, Valens GroWorks is comprised of Valens Agritech Ltd., a 25,000 sq. ft. extraction center, Valens Labs Ltd., a leading edge cannabis research laboratory housed within Agritech, and Valens Farms, a 400,000 square ft. cultivation greenhouse that is in the early stages of development.With the capacity to process 240,000 kg of dried cannabis and hemp per year, Valens GroWorks has signed cannabis and hemp extraction agreements with some of the biggest names in the legal marijuana industry, including Canopy Growth, Tilray, The Green Organic Dutchman, and Organigram. To complement its extraction business, Valens also offers product development and white-labeling services.
Most recently, Valens announced a $30 million bought deal equity financing in which AltaCorp Capital Inc. would act as the lead underwriter and sole bookrunner. The financing has since been upsized from $30 million to $37.5 million. The company intends to use the net proceeds from this offering to grow its presence in Canada, increase production capacity and white label offerings, and for general corporate purposes.
In parallel to this financing, Valens announced that it had acquired its existing processing facility (which was previously owned by one of the company’s directors, Ashley McGrath) for $4.4 million. Valens has also entered into an agreement to purchase a neighbouring property to this facility, providing Valens with 18,000 of additional square feet for extraction, product development, white-labeling, and office space.
Indiva Limited (TSXV: NDVA.V) (US: NDVAF), a Canadian cannabis company aiming to become a house of global marijuana brands, recently hired Seattle-based Lucid Labs Group to design the company’s London extraction facility.
Planned for Q2 2019, Indiva’s 40,000 sq. ft. London facility will serve as a center for oil extraction, cultivation, processing, and product innovation (ie. tinctures, gel capsules, licensed edibles products). The company expects this facility to be able to process 70 tonnes (70,000 kg) of biomass into 4 million grams of distillate.
Prior to the construction of this facility, Indiva signed a 3-year revenue sharing agreement with MediPharm Labs Inc, whereby Indiva would supply MediPharm with dried cannabis for the purpose of creating cannabis oil. By branching out into extraction itself, Indiva may be positioning itself to better protect its margins throughout the lifecycle of the marijuana industry.
Neptune Wellness Solutions
Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) is a wellness products company that specializes in the extraction, purification and formulation of health and wellness products.
With 50 years of combined experience in the diversified wellness products market (ie. marine oils, seed oils, pet supplements, custom formulations, etc.), Neptune first signaled its intent to enter the high-growth legal cannabis market in 2017.
However, it wasn’t until January 2019 that the company received its license to process cannabis from Health Canada. The license allows Neptune to make good on previous multi-year supply agreements—including its June 2018 agreement with Canopy Growth,in which Neptune will supplement Canopy Growth’s extraction, refinement, and extract product formulation capacity.
Neptune’s extraction operations are planned to take place at the company’s 50,000 square foot GMP-certified facility in Quebec. Although this facility can currently only process 30,000 kg of dried cannabis flower, Neptune is on track to complete Phase II of its capacity investment by March 2019, which in effect will increase the facility’s input capacity from 30,000 kg to 200,000 kg of dried cannabis. Concurrently, Neptune is applying for a Health Canada sales license, which would allow the company to distribute finished form cannabis products directly to consumers and patients.
Cannabis Extraction Will Drive New Marijuana Products
By enabling higher margins, new revenue channels, and faster product development times, in-house extraction operations will likely fuel some of Canada’s most successful cannabis companies. That said, we do expect the transference of extraction know-how between companies like Xabis and Westleaf to eventually diminish much of the technical gap between cannabis extractors. Even still, cannabis extraction will play a crucial role in the coming years—especially as new marijuana markets continue to open around the world.
The original post can be found here: https://mugglehead.com/5-leading-cannabis-extractors/
Disclosure: Directors of Mugglehead own shares of Westleaf Inc. and other marijuana stocks not mentioned in this release and we have been compensated by Westleaf Inc. for news coverage.
Mugglehead.com is a digital publisher dedicated to cannabis news, investments, culture, and science, owned by Mugglehead Media Corp. We publish original content, including video, interviews and articles. Because many of the companies and trends we cover are related to investments and stocks within the cannabis industry, please review our disclaimer and forward-looking statements below.
Original content created by Mugglehead Media Corp. © 2019 is protected by copyright laws.
For interviews, advertising opportunities, and coverage requests - including brand and product reviews - contact us at: muggle (at) mugglehead.com
We have lots in store for 2019 so be sure to check us out!
Visit us at https://mugglehead.com daily for all things cannabis-related.
Disclaimer and Forward-Looking Statements
Mugglehead Media Corp. and Mugglehead.com (collectively, Mugglehead) is a news and media publisher dedicated to cannabis. It is not registered as an investment adviser, broker-dealer or other financial or securities professional with any financial or securities regulatory authority. You understand that no content published by Mugglehead constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Mugglehead does not render general or specific investment advice and does not endorse or recommend the business, products, services or securities of any industry or company mentioned on this Site.
It is not intended to provide tax, legal, insurance or investment advice, and nothing on in this release should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy or sell any security. None of the content we publish is provided with a view to inviting, inducing or encouraging any person to make any kind of investment decision. You are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation. You should also consult a licensed professional, such as a financial advisor or broker-dealer, when dealing in any securities or making any investment decisions. We do not guarantee that any of the companies mentioned on Mugglehead.com or any of our newsletters or content will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect.
This news release is not an offer to sell or a solicitation of an offer to buy any securities or commodities. To the extent that anything in this press release may be deemed to be investment advice or a recommendation in connection with a particular company or security, such information is impersonal and is not tailored to the needs of any specific person.
You understand that an investment in any security is subject to a number of risks, and that discussions of any security published on the Site will not contain a list or description of relevant risk factors. In addition, some of the securities about which content is published by us have a low market capitalization, insufficient public float and/or are thinly traded. Such securities are subject to more risk than securities of larger companies, including greater volatility, lower liquidity and less publicly available information. Content we publish may have an effect on the price of such securities.
From time to time, Mugglehead (on behalf of itself and any partner, director, officer or insider of Mugglehead) may have a financial or other interest in the party or parties featured in this release, within the meaning of National Instrument 31-103 - Registration Requirements, Exemptions, and Ongoing Registrant Obligations, published by the Canadian Securities Administrators, as a result of ownership of securities in, compensation received or receivable from or other financial arrangement with such party or parties featured in this press release. We will disclose if we have a position in any such party or parties, as at the date of publication of this press release; however, we may not update this disclosure after such date. We have been compensated C$10,500 per month for 12 months (total $126,000) by Westleaf Inc. for news coverage and our directors own shares of Westleaf Inc.
In addition to historical information, this press release may contain forward-looking statements, including statements with respect to third parties regarding product plans, future growth, market opportunities, strategic initiatives, industry positioning, customer acquisition, the amount of recurring revenue and revenue growth. In addition, when used on the Site, the words ''will,'' ''expects,'' ''could,'' ''would,'' ''may,'' ''anticipates,'' ''intends,'' ''plans,'' ''believes,'' ''seeks,'' ''targets,'' ''estimates,'' ''looks for,'' ''looks to,'' ''continues'' and similar expressions, as well as statements regarding a third party's focus for the future, are generally intended to identify forward-looking statements. Each of the forward-looking statements we make in this press release involves risks and uncertainties that may cause actual results to differ materially from these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those disclosed by the companies featured in this release in their public securities filings. You should carefully review the risks described therein. You should not place undue reliance on these forward-looking statements, which speak only as of the date such statement was published. Mugglehead undertakes no obligation to publicly release any updates or revisions to the forward-looking statements or reflect events or circumstances after the date of their publication, except as required by law.
From time to time, reference may be made in this press release to prior articles or opinions we have published. These references may be selective, may reference only a portion of an article or opinion, and are likely not to be current. As market information changes continuously, previously published information and data, and any references thereto, may not be current and should not be relied upon.
If you ever have any questions or concerns about our business or publications, we encourage you to contact us.
For interviews, advertising opportunities, and coverage requests - including brand and product reviews - contact us at: muggle (at) mugglehead.com