MGC Pharmaceuticals to supply five CBD cosmetic products to Varm Cosmo

Australia-based MGC Pharmaceuticals has entered a binding terms and conditions supply agreement to provide five of its cannabidiol (CBD) cosmetic products in bulk form to South Korean company Varm Cosmo.

The white-label products will be sold by Varm Cosmo to its existing consumers and distribution network.

The deal will be executed through MGC Derma division, a joint venture between MGC Pharmaceuticals and cosmetic manufacturer Dr. M. Burstein.

As part of the agreement, Varm Cosmo will purchase a minimum of 15,000kg of CBD products, including 3,000kg per stock keeping unit per month for use in its cosmetics range.

MGC Derma also expects to earn roughly A$40m ($31m) in annual revenue from the deal.

The company is also expected to receive an initial A$3.3m ($2m) in revenue after the receipt of the first quarterly purchase order from Varm Cosmo. This order is scheduled to be completed by the end of this month.

Varm Cosmo CEO JungYoon Hwang said: “Our products contain 1ml of highest purity CBD in the world.

“Providing the most effective moisturising solution while making your skin young and healthy. Our partnership with MGC Pharmaceuticals gives us the opportunity to enhance our product line, while remaining true to our core beliefs.”

In addition, both MGC Pharmaceuticals and Varm Cosmo are set to sign a binding sale agreement in the coming 31 days and will examine the expansion of the new deal in terms of the product range and supply volumes.