Neptune Technologies & Bioressources Inc (NASDAQ: NEPT) is flying in the market this morning, and for good reason. The company announced that it has entered into a multi-year revenue generating agreement. Of course, the news proved to be a source of excitement for investors who are now sending the stock on a run for the top. Today, we’ll talk about:
- The agreement;
- what we’re seeing from NEPT as a result; and
- what we’ll be watching for ahead.
NEPT Climbs On Agreement
As mentioned above, Neptune Technologies & Bioressources is having an incredibly strong start to the trading session this morning after announcing that it has entered into an agreement. In a press release issued early this morning, the company announced that it has entered into a multi-year agreement with Canopy Growth. According to the terms of the agreement, NEPT will supplement Canopy Growth’s extraction, refinement, and extract product formulation capacity, offering a strong opportunity to generate revenue. In a statement, Michael Timperio, President of the Cannabis Business at NEPT, had the following to offer:
We are truly excited to partner with such a great company as Canopy Growth. This multi-year agreement, including minimum volume commitments, will be supported by Neptune’s decades of experience in extraction, purification and formulation of value added differentiated science-based products.
The above statement was followed up by Mark Zekulin, President at Canopy Growth. Here’s what he had to say:
Extract products are key to the future of the global cannabis industry and we’re taking the right steps to significantly increasing our production capacity to capture this opportunity… We were the first to introduce extract based cannabis Softgels and this agreement supports our development of a wide range of extract products to meet the demand of these growing market segments as we prepare our operations for greater product diversification.
When combined, this significantly increased extract production capacity, coupled with extract focused research, positions Canopy Growth to meet the demand of patients and consumers in Canada and around the world. Neptune’s existing throughput capacity will complement Canopy Growth’s owned extraction capacity to support extraction requirements for the world’s largest cannabis production platform totaling 5.6 million sq. ft.
Finally, Jim Hamilton, President and CEO at NEPT, had the following to offer:
Today’s agreement represents an important milestone in our cannabis growth strategy and validates our repositioning into larger global markets characterized by growth. Neptune has a history of producing high quality products for the natural health sector and is well positioned to apply and lever this experience to cannabis products.
What We’re Seeing From The Stock
One of the first lessons that we learn is that the news moves the market. In the case of Neptune Technologies & Bioressources, the news proved to be overwhelmingly positive. Of course, with the new revenue generating agreement in mind, investors are excited, sending the stock screaming for the top. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:15), NEPT is trading at $3.15 per share after a gain of $0.70 per share or 28.69% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NEPT. In particular, we’re interested in following the story surrounding the company’s new contract and tracking the revenue that the agreement generates. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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