Amid the weakness of the marijuana and cannabis industry in general, shares of Neptune Wellness Solutions Inc. soared on Wednesday following the anticipated announcement of its partnership with a cannabis extraction company.
The three –year extraction agreement between Neptune Wellness Solutions NEPT, +4.02% NEPT, +3.91%, and Green Organic Dutchman Holdings Ltd. TGODF, -0.39% TGOD, -0.59% to extract and purify cannabinoids and terpenes, for use in premium certified organic consumer wellness products, from cannabis has caused an impressive rallying for the wellness company.
Under the new agreement, Green Organic has committed to supply more than 230,000 kilograms of cannabis and hemp biomass with the first shipment is expected to happen this September.
Neptune’s U.S.-listed stock jumped up as much as 9.3% just after the open before paring gains to be up 4.3% in midday trading. The growth was seen despite the weakness in the broader cannabis market and the stock market as a whole. Neptune said it expects volumes to be “back-end-loaded,” as first-year volumes are expected to be about 20% of the total amount of the contract.
“[Green Organic’s] commitment to organic and sustainability is inspiring; Neptune is proud to become a part of their success story,” said Michel Timperio, president of Neptune’s cannabis division.
The deal comes a few days following the announcement of another 3-year extraction and purification agreement with another cannabis company Tilray Inc. TLRY, +2.03% That news had propelled Neptune’s stock to the highest close — $5.07 — since it went public in the U.S. in August 2007.
Neptune’s stock gains despite weakness in the ETFMG Alternative Harvest exchange-traded MJ, -0.55 %, which fell 1.3%, and the S&P 500 index’s SPX, -0.28% 0.4% decline. The Canada-listed Horizons Marijuana Life Sciences Index ETF HMMJ, -0.63% dropped 1.5%.
Among the more-active cannabis stocks, Aurora Cannabis Inc. ACB, -1.16% ACB, -1.16% fell 1.8%, Tilray declined 2.0%, Aphria Inc. APHA, -1.63% APHA, -1.95% lost 2.6%, Canopy Growth Crop. CGC, -0.70% WEED, -0.61% gave up 1.6% and Cronos Group Inc. CRON, +0.82% CRON, +0.82% slipped 0.1%.