MediPharm stock is trading higher in the morning session after MediPharm Labs (TSX:LABS) (OTCQX:MEDIF) named Robert Kwon as its new chief financial officer, effective November 18, succeeding Christopher Hobbs.
Canadian cannabis extraction and purification firm MediPharm made a major announcement today regarding a key appointment. The company announced today that Robert Kwon is going to take over as the Chief Financial Officer from November 18. He is going to succeed the outgoing Chief Financial Officer of MediPharm, Christopher Hobbs. Kwon has an impressive CV and has served at key positions in some of the biggest companies. He previously served as the Chief Financial Officer of Unilever in Canada, and his most recent job was with George Weston Ltd. At George Weston, which is a food and medicine retail company, Kwon served as Senior Vice President.
While it is true that the cannabis sector has been going through a tough time the past few months, the extraction and purification space presents an interesting investment opportunity. Extraction companies like MediPharm provide their services to cannabis companies and generally enter into long-term contracts with them. This helps to lock up long-term cash flow for the company.
MediPharm stock is up 1.50% at $3.57 on the OTC market.
With cannabis 2.0 now underway, the need for extraction services will only rise, and that could be a blessing for MediPharm Labs, which is one of the bigger players in this particular space.
While it is true that many other such companies will step up, it is important to note that MediPharm has certain advantages. It can process both hemp and cannabis biomass. In addition to that, it is raising its capabilities continuously, and it aims to enhance its capabilities to as much as 300,000 kilos on a yearly basis.
One of its biggest clients is Cronos Group (TSX:CRON) (NASDAQ:CRON), which has entered into a $30 million contract with the company over a period of 18 months. It is also noteworthy that the company is already profitable and it should be remembered that the company was only established last November. MediPharm stock could well prove to be a winner in the long run.
Featured image: Canva