MediPharm Labs (MEDIF 0.94%), a Canadian specialist in the extraction of pharmaceutical-quality oils and concentrates from cannabis, announced a supply agreement with Medical Cannabis by Shoppers, the online cannabis portal of Canada's leading drug store retailer.

Under the agreement, MediPharm will begin within two months to supply Medical Cannabis by Shoppers with a variety of concentrate-based products, starting with formulated oils. Other derivative products such as gel caps and topical creams will ship when they become available. The agreement is for three years, with an option to renew for an additional two years.

Bottle and dropper of cannabis oil, with cannabis plant in the background.

Image source: Getty Images.

Under current regulations, pharmacists in Canada can't dispense medical cannabis from drug stores, so Shoppers Drug Mart, a chain of more than 1,300 retail pharmacies, established an online portal and obtained a license from Health Canada for it to sell medical cannabis products. In December, the retailer expanded Medical Cannabis by Shoppers to all of that county's provinces and territories. 

MediPharm is a profitable and rapidly growing company that extracts concentrates from cannabis and sells the derivatives as either wholesale oil or as finished products under private-label or white-label agreements to companies that retail them under their own brands. The company has supply agreements with Canopy Growth, Cronos Group, and seven other licensed cannabis providers. In the most recent quarter, revenue grew 38% over the previous quarter and the company earned $0.02 per share.