Canadian cannabinoid company MediPharm Labs is selling its manufacturing operation in Ontario for $5.5 million to Kensana Health.
Under terms of the cash deal, Ontario-based Kensana Health will acquire all of the issued and outstanding shares of MediPharm subsidiary ABcann Medicinals, according to a Tuesday release.
Once the transaction is finalized, Kensana also will acquire a business license as well as the building, land and equipment.
As part of the agreement, the companies will form a strategic partnership in which Kensana will supply select products and services to support MediPharm’s international brands and customer base.
According to the release, the transaction falls in line with Barrie, Ontario-headquartered MediPharm’s “focus on streamlining its operations and maximizing value for stakeholders.”
“This Transaction is also expected to further complement the Company’s already strong cash position and combined with the materially debt-free balance sheet, allow the Company to invest in future growth opportunities,” the release continued.
MediPharm CEO David Pidduck said the transaction also “foster(s) strong partnerships that expand our global reach.”
“By monetizing non-core assets and securing a strategic supply and services agreement, we are looking to ensure that MediPharm is well-positioned to continue delivering high-quality, GMP-certified cannabinoid solutions to our valued partners and customers worldwide,” he added in a statement.
In February, MediPharm’s facility in Barrie – a key asset in the sale – received Good Manufacturing Practice (GMP) certification from Brazil’s National Sanitary Surveillance Agency for the production of finished cannabis goods.
The deal with Kensana, expected to close by year-end, is expected to support that company’s ongoing registration process with the U.S. Food and Drug Administration for its topical chronic wound treatment.
The biotechnology company also is seeking regulatory approvals in Europe, the United Kingdom, Canada, the Middle East, Pacific Rim and Australia.
