NEPT stock is climbing up again in Wednesday’s session after Neptune Wellness Solutions Inc (TSX:NEPT) (NASDAQ:NEPT) reached another multiyear extraction agreement with The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF).
3-Year Extraction and Purification Agreement
Neptune Wellness Solutions has been one of the better-known companies in the cannabis extraction space for quite some time, and while the company may have gone through its fair share of ups and downs, it announced another significant deal today.
Green Organic Dutchman Holdings Ltd is one of the biggest players in the medical cannabis industry, and Neptune signed a 3-year extraction and purification agreement with the company. The significance of the deal was reflected in the market through Neptune stock’s climb of 4%.
The terms of the deal state that The Green Organic Dutchman will supply Neptune with 230,000 kilos of cannabis and hemp biomass for extraction and purification. The said output will then be used to manufacture specific products by TGOD.
NEPT stock surged 4% to $4.83 after hitting a session high of $5.07. TGOD stock is trading higher by 2% to $3.47 on the TSX.
Similar Deal with Tilray Last Week
Last week, Neptune Wellness Solutions signed a similar deal with cannabis company Tilray (NASDAQ:TLRY). The deal with Tilray is also a crucial one for Neptune for a number of reasons. It will have a positive effect on the company’s revenues as it will process 125,000 kilos of cannabis and hemp biomass over the course of three years. Additionally, one-fifth of the volume will be extracted and purified in the first year. Hence, going forward, the revenues could go far higher.
On the other hand, Tilray, like The Green Organic Dutchman, is one of the bigger players in the cannabis industry, being a vertically integrated operator. These deals will potentially make other big cannabis operators look to Neptune’s services. In this regard, it is important to note that one of the biggest players in the cannabis industry, Canopy Growth (TSX:WEED) (NYSE:CGC), is already one of its clients and signed a deal back in 2018.
NEPT stock is one of the biggest gainers in the cannabis sector this year with a jump of 80%. The stock made a multi-year high of $5.22 last week.
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