Neptune Wellness has decided to leave the cannabis business

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The company is selling its business to PurCann Pharma

While getting out of the cannabis industry at this time may not seem like a good idea, Neptune Wellness Solutions believes it is the necessary path to be able to focus on its other operations. As such, the firm is selling its marijuana business to PurCann Pharma, a subsidiary of Groupe SiliCycle. The Quebec-based company has nearly three decades of experience in extracting and purifying active ingredients from natural biomass. According to the terms of the deal, the transaction will be closed for $3.73 million, payable in cash.

By acquiring the business, PurCann Pharma will become the owner of a cannabis plant in Sherbrooke, Quebec, the Mood Ring and PanHash brands, and related assets. Neptune had initially announced the sale of this business mid-year for $15.22 million.

According to Ray Silcock, Neptune’s CFO, the completed sale of this marijuana business is an essential move in the execution of the company’s strategy to obtain a CPG leadership position. He added, “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. 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.”

This is not PurCann Pharma’s first foray into Canada’s cannabis industry. The company already has an established presence through its recreational cannabis brand OLLOPA and its therapeutic brand OOVIE. Hugo St-Laurent, president of PurCann, says this transaction will see the company consolidate its position in this market while aligning with its mission to provide pharmaceutical-grade ingredients and cannabinoids to the life sciences market.