MediPharm Labs (TSE:LABS) reported a return to positive adjusted EBITDA in the first quarter of 2026, as management said cost controls, product mix discipline and a focus on regulated medical cannabis markets helped offset lower revenue.
Greg Hunter, MediPharm’s interim CEO and chief financial officer, said on the company’s earnings call that the quarter reflected “measured progress” across core markets despite continued shifts in pricing, prescribing behavior and reimbursement regimes. Revenue fell to CAD 9.0 million from CAD 10.8 million in the prior-year quarter, which Hunter attributed to typical first-quarter seasonality and market adjustments in Australia.
International Medical Cannabis Remains Central to Strategy
Hunter emphasized that MediPharm is not a single-market or single-product company, pointing to four revenue channels supported by what he described as a rare regulatory and licensing platform. He cited the company’s Health Canada Drug Establishment Licence, EU-GMP certification, ANVISA GMP certification from Brazil, TGA compliance in Australia and an FDA-inspected facility with prior shipments of pharmaceutical-grade APIs into the U.S. for research and clinical studies.
International medical cannabis revenue was CAD 4.6 million in the quarter, representing about 51% of total revenue. Hunter said the segment remains a key growth engine for the company, with activity across Europe, Australia and other regulated medical markets.
In Germany, MediPharm reported 14% sequential growth, supported by expanded availability of branded flower under its Beacon and Wildlife portfolios and ongoing work with distribution partners. Hunter said the company’s push toward branded products is intended to reduce exposure to spot price volatility and improve economic sustainability over time.
In France, the company received a second purchase order in the first quarter following its first shipment of medical cannabis oil to the country in the fourth quarter of 2025. Hunter said France is transitioning from a government-run pilot program to a permanent pharmaceutical-based medical cannabis framework, with requirements that align with MediPharm’s non-combustible product and pharmaceutical-grade manufacturing capabilities.
During the Q&A portion of the call, Hunter said MediPharm is working with an established partner in France to assemble a regulatory dossier that the company expects to submit in the second quarter of 2026. He said MediPharm expects to begin shipping against the second purchase order in Q2 and anticipates additional shipments over time in 2026 as the market develops.
The company also expanded into New Zealand during the quarter, shipping Beacon-branded product to a medical cannabis distributor. In Brazil, MediPharm received an additional customer purchase order, with shipments expected to begin in the second quarter.
Australia Adjustments and New Product Formats
Hunter said Australia remains a key market, but prescribing behavior continued to adjust following regulatory enforcement actions across the sector. MediPharm focused during the quarter on refreshing premium Beacon products while preparing to introduce Wildlife-branded flower in the value segment. The company said that approach is intended to cover a broader portion of the market without diluting the Beacon brand.
MediPharm also continued work on non-smokable and pharmaceutical-grade formats. Hunter said the company progressed regulatory submissions related to its metered-dose inhaler platform during the quarter, supporting potential entry into additional regulated markets. He said demand for precisely dosed, smoke-free formats remains consistent with the company’s longer-term strategy.
Domestic Medical Revenue Stable as Reimbursement Changes Take Effect
Canadian medical cannabis revenue was CAD 3.0 million, which Hunter said was relatively stable year over year and reflected the resilience of the company’s medical patient base. He said MediPharm remains focused on continuity of care, service quality and reliability, particularly for veteran patients.
During the call, Hunter addressed Veterans Affairs Canada reimbursement changes that took effect April 1, reducing reimbursement from about CAD 8.50 per gram to CAD 6 per gram in the Canadian direct-to-patient medical channel. He described the change as a near-term headwind for MediPharm and the broader industry.
Hunter said the company anticipated the change and implemented mitigation efforts, including restructuring actions expected to generate approximately CAD 1 million in annualized cost savings beginning in the second quarter. He also pointed to procurement initiatives and product mix optimization. At the same time, he said MediPharm is focused on protecting service for its veteran patient base.
“These changes just don’t reflect the cost structure of medical cannabis to supply to this critical patient base,” Hunter said, adding that while MediPharm is working to maintain service, such changes could affect longer-term quality for medical alternatives for patients.
Adult Use and Wellness Managed for Margin
Canadian adult use and wellness revenue was CAD 1.1 million, which the company said was consistent with seasonal patterns and broader market trends. Hunter said MediPharm is defending its No. 2 leadership position in premium oils while avoiding a strategy that chases volume at the expense of margin.
The company is selectively innovating in adjacent non-smokable formats, including extracts, drops and differentiated formulations, while keeping distribution focused on markets and listings that meet return thresholds.
Balance Sheet and U.S. Research Opportunity
MediPharm ended the quarter with CAD 9.9 million in cash, virtually no debt and current status on excise taxes, sales taxes and trade payables, Hunter said. Total operating expenses, including general and administrative, marketing and selling, and research and development, were CAD 4.2 million, down 14% year over year and 28% sequentially.
Hunter also discussed the company’s potential role in the U.S. following what he described as the rescheduling of medical cannabis to Schedule III under federal law. He said the change primarily affects the medical and pharmaceutical ecosystem, including clinical research and pharmaceutical drug development, and that MediPharm’s FDA-inspected facility and Drug Establishment Licence support its longer-term pharmaceutical optionality.
However, Hunter cautioned that the U.S. development is not expected to have an immediate impact on MediPharm’s profit and loss statement. He also noted that tax relief associated with Schedule III does not affect MediPharm because the company does not operate in the U.S.
In response to an analyst question, Hunter said MediPharm has received increased inbound interest, including from research universities looking at its ability to provide pharmaceutical-grade APIs. He said the company is also conducting outbound discussions with potential partners, while reiterating that many opportunities are longer-term initiatives.
Looking ahead, Hunter said MediPharm’s priorities for 2026 include international medical expansion, resilience in domestic medical following reimbursement changes, sustained gross margins and disciplined capital use. He said the company’s organic and selective acquisition strategy is intended to deepen its presence in regulated medical markets while maintaining financial discipline.
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.
