MediPharm Settles $9 Million Dispute with HEXO Following Tilray’s Acquisition

TORONTO — The landscape of the Canadian cannabis industry experienced a recent shift with the news of MediPharm’s $9 million settlement, resolving a lingering commercial disagreement with HEXO. The announcement comes on the heels of Tilray Brands’ acquisition of HEXO, which facilitated renewed negotiations between the involved parties.

MediPharm, a Toronto-based firm, made headlines in 2020 when it lodged a claim against HEXO, a regular customer, over unpaid dues for delivered cannabis concentrates. Although MediPharm secured a favorable ruling from the Ontario Court of Justice in July 2022, HEXO chose to contest the decision. Now, with the latest agreement in place, HEXO will relinquish its appeal.

Notably, Tilray’s takeover of HEXO reshaped the dynamics of the ongoing dispute. Both MediPharm and Tilray leveraged this development to broker a mutually advantageous resolution, also laying the groundwork for a potential collaborative future.

Key stipulations of the agreement include:

• An upfront cash disbursement of $3 million to MediPharm.
• Tilray allocating common shares worth $4.5 million to MediPharm.
• MediPharm acquiring Tilray cannabis products valued at $1 million.
• A four-year supply contract, amounting to $500,000, with MediPharm supplying its products and services to Tilray.

The CEO of MediPharm, David Pidduck, articulated his optimism, stating, “This settlement augments our balance sheet by $9 million, paving the way for diverse organic and inorganic growth ventures. Furthermore, the prospect of forging a sustained partnership with Tilray is exhilarating.”

The industry views this accord as a bolster to MediPharm’s fiscal footing, potentially elevating its standing among similar market-valued cannabis contemporaries.

MediPharm further elaborated on its future aspirations, emphasizing its fortified financial position to delve deeper into pharmaceutical and clinical endeavors. The company also indicated its intent to strategically navigate the prevailing merger and acquisition opportunities in the sector.

MediPharm Ventures into the Australian Market MediPharm recently unveiled its Beacon Medical cannabis oil and inhalation cartridges in the Australian medical market, armed with a GMP license bestowed by the country’s Therapeutic Goods Administration. The tightened regulatory environment in Australia has imposed challenges on businesses lacking these certifications, positioning MediPharm advantageously amidst reduced competition. Current projections from research entity Satista anticipate the Australian medical cannabis domain to approach the $200 million threshold in 2023.