TGOD Stock: Partnership With Neptune Wellness, Will Shares Surge?

TGOD stock

TGOD stock price has spiked off the back of a multi-year agreement with Neptune Wellness Solutions Inc (TSX:NEPT) (NASDAQ:NEPT). Shares of The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) hit a high of $3.48 CAD in early trade yesterday.

The stock closed yesterday at $3.41 CAD per share.

The Agreement

The company entered into a multi-year agreement with Neptune Wellness for CBD extraction, formulation, and packaging services. The deal is exclusive; TGOD will have exclusivity on "extraction, formulation, and packaging of certified organic products within and for the Canadian market."

Under the terms of the agreement, TGOD will give Neptune over 230,000 kilograms of cannabis and hemp biomass for transformation into CBD-infused products. That amount makes this deal the largest for a processor in the industry thus far.

The deal is a three-year long partnership and according to the press release, "is expected to be back-end loaded with the first year accounting for approximately 20% of the total value."

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TGOD Stock Overview

TGOD stock has been volatile in recent weeks. Hitting highs of $4.21 CAD on May 22nd, shares dropped to $3.41 one week later. Several days later they jumped to $3.70 but fell shortly after to current levels.

In fact, since April's high, TGOD stock has dropped 37%. But year-to-date, shares have increased by 30%.

There have been several reasons for the volatility. For example, a brief surge came from an announcement that the company secured a cannabis supply agreement with Alberta Gaming, Liquor & Cannabis (AGLC). This deal expands TGOD distribution across Canada by supplying the province with its dried flower.

This news caused TGOD stock to jump, but unfortunately, an industry-wide bearish trend corrected any gains. Increasing tensions between the US/China trade war has also impacted TGOD stock price.

This partnership announcement may give shares a bump once again. With cannabis derivatives expected to be legalized in October, TGOD is getting ready to be a leading player in this market. Can we expect TGOD stock to begin climbing so?

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