An anonymous director reports

MEDIPHARM LABS IMPROVES DOMESTIC SALES GROSS MARGIN WITH TERMINATION OF SHELTER CANNABIS BRANDS ROYALTY AGREEMENT

Medipharm Labs Corp. has executed a supplementary agreement to its asset purchase agreement with 1193269 B.C. Ltd. (operating as Shelter Cannabis) for the Shelter Cannabis Brands IP (intellectual property) portfolio, ending any continuing royalty payments after Aug. 31, 2023.

Under the existing asset purchase agreement, executed in March, 2022, Medipharm Labs purchased the IP of Shelter Cannabis Brands. This IP has been focused in market on Wildlife Cannabis domestic dry flower and preroll products that are manufactured and distributed via the Medipharm sites.

This supplementary agreement allows for a significant improvement in this product line's gross margin, which will provide flexibility for the company to further invest in the brand to drive sales, as it continues on the path to profitability. In the last year, Medipharm has made significant improvement in its adjusted gross margin. In the last reported quarter, Q2 2023, this was approximately 21 per cent versus negative 1 per cent in Q2 2022.

The company appreciates the work done by the previous owners in creating the Shelter Cannabis and Wildlife brands, and their support and flexibility through the transition of the brands to Medipharm.

Medipharm continues to review every product category and selling channel to optimize margins and streamline business operations to attempt to achieve the company's goal of profitability.

About Medipharm Labs Corp.

Founded in 2015, Medipharm Labs specializes in the development and manufacture of purified, pharmaceutical-quality cannabis concentrates, active pharmaceutical ingredients (APIs) and advanced derivative products utilizing a good manufacturing practices certified facility with ISO standard-built clean rooms. Medipharm Labs has invested in an expert, research-driven team, state-of-the-art technology, downstream purification methodologies, and purpose-built facilities for delivery of pure, trusted and precision-dosed cannabis products for its customers. Medipharm Labs develops, formulates, processes, packages and distributes cannabis and advanced cannabinoid-based products to domestic and international medical markets.

In 2021, Medipharm Labs received a pharmaceutical drug establishment licence from Health Canada, becoming the only company in North America to hold a commercial-scale domestic good manufacturing licence for the extraction of multiple natural cannabinoids. The company carries out its operations in compliance with all applicable laws in the countries in which it operates.

In 2023, Medipharm acquired VIVO Cannabis Inc., which expanded Medipharm's reach to medical patients in Canada via Canna Farms medical e-commerce platform, and in Australia and Germany through Beacon Medical Pty. and Beacon Medical GMBH. This acquisition also included Harvest Medical Clinics in Canada, which provides medical cannabis patients with physician consultations for medical cannabis education and prescriptions.

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