A subsidiary of Neptune Wellness Solutions Inc. NEPT, 9354-7537 Québec Inc., has received approval for cannabis license amendments from Health Canada.
Why It Matters
The key amendment to 9354-7537 Québec's license raises the company's extraction capacity. The additional room will be used by Neptune to conduct cold ethanol extraction.
In a press release, the company noted the process's faster production times while touting its cost efficiency compared to other methods including CO2.
Neptune said the process will increase input capacity from 30,000 kg to 200,000 kg.
Under the amended license, Neptune is also granted the room to expand with an encapsulation room. The company plans to use its patented technology produce cannabis oil-infused capsules, with an annual capacity of 200 million pills.
New regulations regarding cannabis products slated for October 2019 should increase demand for extraction and other similar services, Neptune CEO Jim Hamilton said in a statement.
"With our increased extraction capacity, Neptune is now well-positioned to benefit from this rapidly growing market. In addition, our cannabis oil capsule technology provides the company a differentiated offering for which there is strong demand," he said.
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What’s Next
Neptune said it immediately begin start-up activities now that the license amendment is approved. This includes commissioning equipment while the company increases its commercial operations during the second quarter of its fiscal year.
Neptune also discussed a $7-million investment approved by its board of directors.
The investment is being made increase the company’s formulation, manufacturing and packaging efforts.
"With this approval, Neptune is now positioned to submit further license amendments to incorporate the manufacturing of additional product forms, and packaging capabilities, as well as for the Phase IIIA extraction capacity expansion," according to the company.
Neptune shares were trading up by 1.21% to $4.33 at the time of publication Monday.
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