MGC Pharma receives FDA approval for CBD cosmetic products
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MGC Pharmaceuticals (ASX:MXC) has received Food and Drug Administration (FDA) approval for its MGC derma anti-ageing cosmetic line of products.
The FDA approval enables MGC to sell and distribute this line of products throughout all states of the US.
“Receiving FDA approval and signing this key distribution agreement with C&M allows us to start selling our cosmetics products into the large US cosmetics market, expected to be worth $11 billion in revenue in 2016 alone,” said MGC co-founder and managing director Nativ Segev.
MGC has 16 MGC derma products that can be imported and sold, even in states where medical cannabis in not yet legal.
News of the FDA approval follows similar news in Europe, where the European Commission’s Cosmetic Products Notification Portal (CPNP), has granted MGC permission to sell and distribute its cosmetic products throughout the European Union.
MGC will now actively pursue strategic distribution arrangements throughout Europe and America.
“MGC Pharmaceuticals is moving forward in its commercialisation strategy at a rapid pace,” Mr Segev said. “Having the first milestone in place, just entered the European market with CPNP grant of approval, an exclusive European distribution agreement and accompanying first cosmetics products and sales order, we are delighted to be entering the US cosmetics market.”
The company also has applications pending for similar regulatory approvals in Canada and Australia, where it hopes to emulate its strategic and commercial position.
MGC has executed its first US sales off take agreement for products from the range in the US, for the exclusive distribution of the MGC Derma CBD based cosmetic products in California. The order has been delivered under a distribution agreement with California-based company C&M CBD Holdings LLC.
In the first year of the C&M agreement, 60,000 units of CBD Anti Aging cosmetic products including Moisturizing Day Cream SPF 30, Active Firming Anti Aging Mask, Active Bright Facial Cream, Anti Puffiness and Dark Circles Eye Serum will be distributed.
The contract for the first year is in an amount of approximately €1.2m per annum (AU$1.8 million), and is to be paid in monthly instalments in advance. The agreement provides scope for increases in the volume and value of the contract.
The products will be produced in MGC Pharmaceuticals Slovenian facilities, MGC Derma d.o.o, with monthly shipping ready to commence in September 2016. The cosmetics products are expected to be on Californian shelves by October 2016.
With a global market of over $121 billion for 2016, the US Skin Care Cosmetics market is the largest in the world and estimated at $11b, Market Research, 2016, it is therefore an important market for MGC Pharmaceuticals to engage in.
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