Neptune Wellness Solutions (NASDAQ: NEPT) (TSX: NEPT), which is engaged in the extraction, purification, and formulation of cannabinoids, has announced an amended processing agreement with Canopy Growth (NYSE: CGC).
Reviewing their processing agreement, the companies have agreed to an amended schedule of processing volumes. Effective June 30, 2020, volume and pricing will be negotiated between the two parties based on market conditions, according to a statement.
In addition, the parties agreed to remove certain preferential rights previously granted to Canopy with respect to Neptune’s capacity and pricing.
The three-year term of the agreement remains unchanged and expires on June 30, 2022.
As a result of the revised terms, Neptune said it expects to reduce its client concentration risk and diversify its customer base.