NEPT stock is making a solid move this morning after Neptune Wellness Solutions Inc (TSX:NEPT) (NASDAQ:NEPT) announced a new strategic partnership with American Media LLC.
Key Partnership
The cannabis sector has been in the middle of a bit of a slump over the past months, and the pressure of the dwindling stock prices has took a toll on many companies this far. However, the long-term outlook for the industry remains optimistic. That’s the reason why many companies are still able to forge partnerships in order to further expand their businesses. In a new development, cannabis extraction firm Neptune Wellness Solutions announced that it has reached a partnership agreement with American Media LLC by way of which Neptune’s brands will get marketing exposure.
Due to this partnership, Neptune’s brands are going to be promoted in American Media-owned media properties like Life & Style, Us Weekly, and Men’s Journal. In return, Neptune has issued American Media a total of 3 million warrants, which makes the holder eligible for one common stock in the cannabis extraction company.
>> OrganiGram Stock Down Due to 'Elevated Bacteria' in Cooling Towers
The exercise price has been set at $8. In this regard, it is important to note that on Thursday, NEPT stock closed at $3.68. The warrants are going to expire in five years. In addition to the market, American Media is also going to help the company with its commercialization efforts.
Neptune Wellness is currently one of those stocks worth a watch, considering the troubles the cannabis industry is going through. It was in the nutraceutical space in the past and has recently pivoted into cannabis extraction.
In order to raise its extraction capabilities, it is going to supply its Quebec subsidiary with new equipment that will boost extraction volumes significantly. On the other hand, the acquisition of SugarLeaf is also going to add significantly to the bottom line next year.
Last but not least, SugarLeaf’s ethanol extraction business is also expected to hit 1,500,000 kilos in annual operating capacity. All this points to a company that is headed in the right direction and is also devoid of the larger risks of the cannabis industry.
At the time of writing, NEPT stock is up 5% at $3.85.
Featured image: DepositPhotos © minervastock
