Neptune Wellness Solutions Inc. (TSX and NASDAQ: NEPT) is gearing up to launch its own brand of cannabis products.
On Monday, the extraction company said it had been approved by Health Canada for a sales licence to sell in-house cannabis 2.0 products to the provinces and territories.
Neptune is now licensed for processing and sales and will be able to offer edibles, vapes, extracts, topicals and beverages when it launches its proprietary branded products.
The company did not specify a launch date, but in a statement CEO Michael Cammarata said the company was “already advanced in our development of our own brands, and look forward to announcing new branded products.”
— Neptune Wellness Solutions (@Neptune_corp) June 29, 2020
The sales licence will also boost what it can sell through its business-to-business customers, Neptune said.
“The licence enhances our white label business, allowing us to ship direct to provincial customers on behalf of our partners,” Cammarata said. “We plan to further enhance our production capabilities to expand both our branded and white label product solutions and product forms and capture incremental value within the growing Canadian cannabis market.”
To help facilitate that growth Neptune added a cold storage and additional operating space to its 50,000 square foot facility in Sherbrooke, Quebec. The new fridge will add considerably to the facility’s logistic capabilities and will let Neptune process larger volumes of product which it can then store at low temperatures for a longer shelf life, the company said Monday.
This will “provide significantly higher value to our partners and customers, capturing incremental revenue and growth,” Cammarata said.
MediPharm Labs Corp. (TSX: LABS), another large Canadian extractor, has also introduced its own brand of cannabis 2.0 products this year as revenues from third-party contracts stagnate. The company said the strategy reset was necessary due to growing pains and a supply glut of cannabis concentrates in the Canadian market.
Read more: MediPharm watches revenues fall 65%
Neptune has proved nimble in navigating the economic damage created by the Covid-19 pandemic. In April, the company pivoted from producing cannabis extracts to pumping out over a million units of hand sanitizer per week.
While today’s sales licence news hasn’t boosted the company’s stock as high as the sanitizer pivot did, Neptune shares did enjoy a 3 per cent rise on Monday.
Neptune forecast that revenues would jump 132 per cent in the fiscal second quarter in its latest earnings report. First quarter sales ending March 31 came to $9.5 million, with $4 million coming from cannabis sales.
Top image of Neptune’s Sherbrooke, QC, facility. Submitted photo