MediPharm Labs (MEDIF 3.09%) has nabbed a customer Down Under. The company announced Wednesday that its Australian subsidiary signed an agreement with privately held Compass Clinics for the supply of cannabis oil products. This is a white label arrangement, in which Compass Clinics will use MediPharm's supplies to create its own branded line of products.
MediPharm didn't reveal the terms or the price of the deal.
The news comes less than two months after MediPharm announced it secured a license from the Australian government to import cannabis and related substances from its native Canada.
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Australia legalized medical cannabis in 2016, and the numbers of both patients and prescriptions has risen substantially. According to MediPharm Labs, as of the end of February the Australian Therapuetic Goods Administration (TGA) -- the national regulator of pharmaceuticals -- green-lighted over 34,500 prescriptions for product.
The country is tightening its oversight of the medical marijuana shipped into the country, on the back of that increased demand. Earlier this month, TGA announced it planned to increase the number of quality audits of medical cannabis. MediPharm has an advantage in this regard, as the marijuana company has secured crucial good manufacturing practices (GMP) certification for its wares sold in the country.
In the press release heralding the Compass Clinics deal, MediPharm said its supplies "will help Compass better serve its existing patient base and continue to expand its presence in one of the fastest growing medical cannabis markets in the world."
On Wednesday, however, MediPharm's stock experienced a slightly deeper decline than the S&P 500 index on the day, falling by over 7%.