MMJ Group today announced the expansion in annual production capacity in Toronto Stock Exchange-listed MediPharm Labs Inc.
Global cannabis investment company MMJ Group Holdings Limited (ASX: MMJ) holds 4.5% shareholding in MediPharm Labs that has announced an increase of 50% in its current annual production capacity. MediPharm Labs Corp stated that Health Canada had approved its wholly owned subsidiary, MediPharm Labs Inc. to increase its annual production from current processing capacity of up to 100,000 kg of dried cannabis over three extraction lines to 150,000 kg over five extraction lines.
The extension comes after MediPharm added two new extraction lines in its newly constructed extracted clean room along with the installation of other highly specialized and calibrated equipment. These new extraction lines have the potential to produce up to 6,500kg of cannabis resin on a yearly basis that is reportedly equivalent to ~9.7 million vape pens.
President and CEO of MediPharm Labs, Pat McCutcheon stated that the expansion outlines the company’s ambition to become the global leader in the extraction of purified cannabis concentrates.
MediPharm’s focus is to build the differentiated extraction-only model while it moves towards the completion of Phase 2 expansion expected by the second quarter of 2019. This business model reportedly focuses on prioritizing the production of pharmaceutical-grade cannabis concentrate to achieve large-scale global distribution.
The company’s Phase 2 expansion plan will see an increase in extraction capacity to up to 250,000kg of dried cannabis produced annually. Moreover, MediPharm stays positive for the receipt of regulatory approval to increase its production capacity.
Mr. McCutcheon added that the coming year is aimed at extraction in the cannabis industry and MediPharm is well positioned to service the demand for active ingredients required in the production of the most growing segment of the cannabis market like beverages, edibles, vapables, and topicals.
With this expansion, MediPharm claims to possess the largest extraction-only footprint in Canada with proprietary practices and ISO designed clean rooms and laboratories.
ASX listed Investor MMJ Group owns approximately 4.4 million shares in MediPharm Labs that makes it to 4.5% of total MediPharm’s shareholdings. It also holds 2.9 million warrants in MediPharm Labs that are exercisable at CAD$1.20 per share by October 2020.
It seems the growth in MediPharm’s production capacity has turned the investors' table to MMJ shares as MMJ Group’s stock has gone up 5.128% to trade at $0.205 on 27 December 2018. Currently, 2:42 PM AEST, MMJ stock is trading at a price to earnings ratio of 1.490 with a market capitalization of $44.88 million. But since the past 12 months, it has shed 50.63% over the daily stock price movement.