NEPT stock is making a new high in Friday's session after Neptune Wellness Solutions Inc (TSX:NEPT) (NASDAQ:NEPT) announced a multiyear extraction agreement with Canadian cannabis producer Tilray (NASDAQ:TLRY).
Canada-based Neptune Wellness Solutions has been in the industry for some time, but today, the company announced a significant deal that could see it becoming an important player. In a new development, Neptune has managed to reach an agreement with cannabis major Tilray to provide purification and extraction services. The deal is for a duration of three years, and Tilray will supply Neptune with 125,000 kilos of hemp and cannabis biomass that it will then need to process.
Around 20% of the total agreed volume will have to be processed in the first year, and Tilray will send in the first shipment at some point in September.
Chief Executive Officer of Neptune stated, "The size and length of this contract is a testament to the strength of our commercial, scientific and operations teams."
NEPT stock surged 16.70% to $4.63 after hitting a new high of $4.75 earlier in the session. Moreover, Neptune's stock is up 15.50% at $6.17 on the TSE.
Tilray stock is also gaining momentum and now up 8.60% to $38.77.
About Neptune Wellness
The company was earlier known as Neptune Technologies and Bioresources, but it changed its name last fall to Neptune Wellness Solutions.
In its earlier avatar, the company was involved in nutraceuticals and had already developed capabilities in extraction and purification. Once the cannabis industry exploded, Neptune decided to use its well-developed expertise to enter the marijuana market. Neptune has its own plant in Quebec, where it processes cannabis, and more importantly, it has also acquired a license for the same.
The stock has been on a consistent upswing as well, and since the month of April, NEPT stock has gained as much as 50%. The most important trigger for the rise was when the company announced that it was all set to enter the hemp business, in addition to cannabis. Orders for hemp purification have been consistent, according to the company.
It is interesting to note that while Tilray stock is in the red by 49% so far this year, Neptune’s fortunes are soaring and NEPT stock has gained as much as 65% this year.
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