MediPharm Labs (TSE:LABS) reported its first quarter of positive net income since 2019 in the second quarter of 2026, supported by international medical cannabis growth, improved margins and lower operating expenses.
Interim CEO and Chief Financial Officer Greg Hunter said the company also posted its second consecutive quarter of positive adjusted EBITDA, reaching its strongest adjusted EBITDA result since 2019. Revenue rose 11% sequentially to CAD 10 million from CAD 9 million in the first quarter.
International Medical Sales Drive Revenue Growth
International medical cannabis revenue totaled CAD 5.8 million, or approximately 58% of quarterly revenue, representing a 26% sequential increase from CAD 4.6 million. Germany was a major contributor, with revenue in that market rising 45% sequentially and 33% year over year, Hunter said.
The company said branded product sales in Germany more than doubled during the quarter, aided by broader availability of its Beacon and Wildlight branded flower products. MediPharm also continues to pursue white-label flower business when margins and partner standards meet its requirements.
Hunter said Germany is experiencing more competition and pricing pressure, while regulators are increasing scrutiny of good manufacturing practice compliance across the supply chain. He said MediPharm views greater regulatory oversight as a potential advantage because of its EU GMP and pharmaceutical manufacturing credentials.
Beyond Germany, MediPharm reported progress in several regulated medical markets. The company delivered a second purchase order for medical cannabis oil in France after its first shipment in the fourth quarter of 2025. In Brazil, it began manufacturing for an initial purchase order received during the first quarter and expects its first commercial shipment to that customer in the second half of 2026.
Following the Beacon brand’s New Zealand launch in the first quarter, MediPharm received replenishment orders that it expects to ship in the back half of the year. The company also submitted a regulatory dossier related to its metered-dose inhaler, which could support future entry into additional regulated markets.
Margins Improve as Expenses Decline
Gross profit was CAD 4.3 million, producing a gross margin of 43%. Gross profit increased 30% from the first quarter and 13% from the prior-year period. Hunter attributed the margin performance to product mix management, branded international sales and cost controls.
Total operating expenses, including general and administrative, marketing and selling, and research and development costs, were CAD 4 million. That represented a 44% year-over-year decline and a 4% sequential decrease. The company said restructuring actions implemented in the first quarter are expected to generate more than CAD 1 million in annualized savings.
Adjusted EBITDA was positive CAD 0.9 million, marking the company’s second straight positive quarter on that measure. Hunter said the result reflected improved margin quality and lower operating costs.
Canadian medical cannabis revenue declined to CAD 2.3 million from CAD 3 million in the first quarter. The decline followed Veterans Affairs Canada reimbursement changes that took effect April 1, reducing the maximum reimbursable amount from CAD 8.50 per gram to CAD 6 per gram.
Hunter said veterans account for a substantial portion of MediPharm’s Canadian direct-to-patient medical business. He said the company has sought to mitigate the reimbursement impact through cost reductions, supply-chain efficiencies and portfolio optimization while maintaining service levels for patients.
Canadian adult-use and wellness revenue rose 34% sequentially to CAD 1.5 million from CAD 1.1 million, which Hunter attributed to seasonal patterns and broader market trends. The company said it continues to prioritize pricing discipline and contribution margins in the segment rather than pursuing volume alone.
LiBBY Trial Provides Pharmaceutical Platform Validation
MediPharm also highlighted positive Phase II results from the LiBBY clinical trial, a U.S. multicenter randomized, double-blind, placebo-controlled study of the company’s proprietary cannabinoid formulation for agitation in patients with dementia who were eligible for or receiving hospice care.
The 120-participant study met its primary endpoint and all key secondary endpoints, according to Hunter. The company said the results showed statistically significant improvements in agitation, with benefits observed after two weeks and maintained through the 12-week treatment period. Nearly nine out of 10 treated patients demonstrated overall clinical improvement by week 12, Hunter said.
Results were presented in July at the Alzheimer’s Association International Conference. The study was funded by the National Institute on Aging and the Alzheimer’s Association and was conducted through the NIH-funded Alzheimer’s Clinical Trials Consortium.
MediPharm has filed two U.S. provisional patent applications covering the formulation and related therapeutic applications. Hunter said the company remains in the early stages of advancing the opportunity and will continue working with the LiBBY study team. He also said MediPharm participates in 10 other disclosed clinical trials across areas including epilepsy, chronic pain, insomnia and oncology symptom management.
Balance Sheet Supports Growth Plans
Hunter said more than 80% of MediPharm’s revenue comes from medical channels in which products are prescribed by healthcare practitioners. The company ended the quarter with CAD 9.9 million in cash, virtually no debt and ownership of two licensed production facilities that it said have an appraised value exceeding CAD 15 million.
The company said it was current on excise taxes, sales taxes and trade payables. Hunter said the balance sheet provides flexibility to fund organic growth and consider selective acquisitions that complement its regulatory capabilities and regulated medical market strategy.
About MediPharm Labs (TSE:LABS)
Founded in 2015, MediPharm Labs specializes in the development and manufacture of purified, pharmaceutical-quality cannabis concentrates, active pharmaceutical ingredients (API), and advanced derivative products produced in a GMP-certified facility with ISO-standard clean rooms. MediPharm has invested in an expert research-driven team, state-of-the-art technology, advanced purification methodologies, and purpose-built facilities to deliver pure, trusted, precision-dosed cannabinoid products for domestic and international markets.
