NEPT Stock Corrects From Highs, But Still Up 60% YTD

NEPT stock

NEPT stock has been falling under pressure over the past couple of months due to the continuous sell-off in the cannabis sector. Let’s dig into Neptune Wellness Solutions Inc (TSX:NEPT) (NASDAQ:NEPT).

Key Drivers

The cannabis industry has gone through a bit of a downturn for most of the year, and even now, things are not clear whether the clouds are going to clear anytime soon. It goes without saying that many investors might feel the pangs of uncertainty with regards to policy issues and the way forward for many companies. However, in such a situation, it is perhaps wise to consider companies in the cannabis industry that already have contracts and agreements in place. In such a scenario, the company continues to do business despite the changing scenario, and that brings us to Neptune Wellness Solutions.

The company is involved in extraction services and provides its services to cannabis companies. In this regard, it is important to note that Neptune has a contract with some of the biggest operators in the business, and that gives it an advantage. The CBD industry is a thriving one, and according to industry experts, it is expected to grow rapidly over the next few years. Moreover, extraction and processing services are relatively at less of a risk from any kind of drastic change in the regulatory environment.

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At the time of writing, NEPT stock is down 3% at 4.37.

Neptune has made significant strides in the industry over the past few months and has become one of the more accomplished companies in the cannabis extraction space. It has signed large long term contracts with companies like The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) and Tilray (NASDAQ:TLRY), which should keep it in good stead over the coming quarters. In June, it agreed to extract CBD from 125,000 kilos of cannabis for the company Tilray.

Only a few days after that, Neptune announced that it had signed a deal with The Green Organic Dutchman by way of which it was going to process 230,000 kilos of cannabis over a period of three years. These are lucrative and long term contracts that should help the company in ticking along.

Despite the recent correction, NEPT stock is still up over 60% so far in 2019.

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Featured image: DepositPhotos © eskaylim