Cannabis-extraction company MediPharm Labs (OTC:MEDIF) has signed its first European "white label" supply deal. The Canada-based company announced that its MediPharm Australia subsidiary has entered into such an agreement to provide a raft of cannabis oil products to Therismos, a U.K.-based pharmaceutical supply-chain company. The agreement will be in force for three years; the financial particulars were not provided.

"White label" means that a producer supplies goods for another company to package as its own brand. MediPharm Australia received a license in late 2019 to produce cannabis extracts, and recently received Good Manufacturing Practices (GMP) certification for related products. That certification is mutually recognized by European Union authorities, even though it's an Australian producer. It's often required for cannabis products in that market.

Cannabis extract in a jar.

Image source: Getty Images.

Therismos is owned by cannabidiol (CBD) products maker Cannaray, which, like its subsidiary, is based in the U.K. By owning Therismos, the company has access to numerous European countries, as the business unit is licensed to import and distribute legal medications in that region.

"Cannaray is the gold standard in its growing part of the European market and to be chosen as their white-label partner is a coup for MediPharm Labs Australia," the latter marijuana company wrote in the press release trumpeting the deal.

MediPharm cited research from specialty analysis company Prohibition Partners forecasting that the overall European legal market could reach as much as the equivalent of $2.5 billion by 2024. That would be more than eight times the current estimated level of roughly $300 million.

Investors seem to be impressed by this deal and its potential. On Friday, they bid up MediPharm shares by over 11%, far outpacing the gains of the wider stock market.