Neptune Wellness Solutions Inc. (NASDAQ: NEPT) will be divesting its cannabis business assets and handing them over to a Quebec-based cannabinoid producer in exchange for a hefty sum of cash.
On Monday, the company announced that PurCann Pharma Inc. would be acquiring the Mood Ring and PanHash brands, the cannabis facility in Sherbrooke, Quebec and all related assets for a total of $5.15 million.
“With this transaction, PurCann Pharma consolidates its position in the cannabis market and is also aligned with our mission to provide pharmaceutical-grade ingredients and cannabinoids to the life science market,” said Hugo St-Laurent, president of PurCann.
PurCann Pharma acquires Neptune's cannabis division, thus consolidating its position as a major player in the #cannabis and #wellness #industry in #Canada
▶️ https://t.co/MJvEQJtsP0#business #cannabisindustry #cannabisnews #cannabisbusiness #cbdbusiness #hemp #cbdnews #quebec pic.twitter.com/X8CfU4yX56
— PurCann Pharma (@purcann_pharma) October 18, 2022
Neptune plans on using the net proceeds from the sale for general corporate purposes and the transaction is anticipated to close on or prior to November 15 pending completion of standard closing requisites.
The news follows an announcement of a planned divestiture of all cannabis-related assets and financial restructuring of operational resources from Neptune in June. The company also announced plans to focus on its Sprout Organics and Biodroga Solutions brands that month.
Read more: Neptune Wellness set to make gradual exit from cannabis industry
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“The complete divestiture of our cannabis business is a critical milestone in executing upon our strategy to become a leading CPG company. We are nearing an inflection point with our flagship brand Sprout Organics and expect it to serve as the key growth driver for Neptune going forward,” said Ray Silcock, chief financial officer of Neptune.
“In addition, the divestment of the cannabis assets will allow us to realize significant cost savings and operational streamlining from redirected resources towards our simplified corporate structure.”
Neptune stock dropped by 0.24 per cent today to US$1.39 on the Nasdaq exchange.
