Neptune Wellness Solutions (NEPT) is a Canadian health and wellness company headquartered in Quebec. The sales of cannabis and CBD products make up most of their revenue. They operate in America by selling CBD and non-CBD health products. They sell products in all provinces of Canada in the recreational and medical cannabis markets, as well as CBD and non-CBD health markets. They are beginning to distribute their non-THC products globally.
The company is operating at a loss, but there is promise after recovery
Their net loss of CA73.7 was due to a decrease in revenues, increase in cost of sales, increase in selling and general expenses, and changes in fair value, as well as revaluations of warrants. Of the net loss, there was an impairment loss of CA37.7M due to Sugarleaf. The company wrote down CA7.931M in inventories. Costs grew during the quarter due to growing overheads related to production, lack of raw material, supply chain and transportation issues, and new product launches.
There is a significant decrease in revenue from cannabis extractions for other business because the company stopped offering this service. Revenue is down in the US because of issues with SugarLeaf, a subsidiary of the company, which lost its business due to the pandemic. Because of the pandemic, SugarLeaf had to furlough employees and no longer produced product or placed orders with Neptune. Neptune decided to take accelerated amortization for the asset (CA7.7M and CA6.3M).
Neptune’s future will be focused on brand creation, accelerated organic growth complemented by new acquisitions with operational excellence as our foundation. The first step toward this new strategy is a lineup of CBD-infused beverages starting with teas and lemonades, that is expected to launch into the U.S. market later this year. Additionally, we will introduce a disruptive plant-based Omega 3-6-9 product in the U.S. market as well as plant-based tableware and utensils."
"Michael’s vision, unanimously supported by the Board of Directors, positions the Company for accelerated growth across multiple business verticals," said John Moretz , Chairman of the Board of Directors for Neptune. "The scale of Neptune’s transformation is truly remarkable and should position the Company for significant long-term top-line growth. I have long said the most successful companies in any industry must continually transform and evolve to changing conditions. Michael’s vision to quickly evolve in the face of a global pandemic and economic strife was the right decision at the right time."
Nutraceuticals. Neptune is focused on expanding its exclusive Omega-3 delivery technology MaxSimil® while improving growth and profitability in its Nutraceuticals vertical. This includes expanding the supply and manufacturing base, which is expected to significantly lower production costs and improve gross margins and returns on invested capital. The MaxSimil® product lineup will be expanded with the launch of two new consumer products: MaxSimil® with CoQ10 and MaxSimil® with Curcumin. Additionally, the Company plans to launch a new consumer line of Vitamin Sprays and Pumps for both children and adults with selected retail partners. To support anticipated accelerated growth, the Nutraceuticals U.S. sales force has been expanded to maximize awareness and distribution of the capabilities and expertise in CBD formulation, prebiotics and probiotics, and proteins within this important vertical.
Mr. Cammarata added, "Today, all our business verticals, except Cannabis are positively contributing to gross margin. Mood Ring has exceeded our expectations and will achieve scalability soon. Transforming from a B2B cannabis and hemp extractor to a full-scale disruptive and diversified CPG company during an unprecedented global pandemic and economic instability around the world, while challenging, was absolutely the right thing to do for the long-term value creation our shareholders expect. I am thankful to have the unanimous support of the Board of Directors (the "Board"), the overwhelming support and patience of our long-term institutional investors, and most of all the hard work of our associates at Neptune to make this transformation a success.
The Company intends to continue organically building out its existing brand portfolio through innovation and contributions from its product development and research and development teams.
See Also: Canopy Growth Enters Sports Nutrition Space, Acquires Majority Stake in BioSteel Sports Nutrition
“IFF is a well-recognized leader and innovator in taste, scent, nutrition and ingredients and we could not be more excited at the potential of combining the resources of our two organizations to develop plant-based consumer products, including hemp-derived CBD products,” said Michael Cammarata, CEO of Neptune.
Neptune’s stock traded higher by 8.9% to $3.90 per share in Wednesday’s pre-market session.
Neptune Wellness Solutions is a company that extracts, purifies and formulate health and wellness products. Its wholly-owned subsidiary 9354-7537 Quebec Inc. possesses a Health Canada license for processing cannabis.
Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) announced Wednesday it’s pursuing a partnership with International Flavors & Fragrances Inc. (NYSE:IFF) to co-develop hemp-derived CBD products.