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Neptune Wellness Solutions: Watch This Cannabis Company For Future Results

Alan Sumler profile picture
Alan Sumler


  • Neptune Wellness Solutions’ Q3 financial statements show a decrease in revenue and increase in operating expenses.
  • The company recently changed their business strategy and had issues during the pandemic.
  • If Q3 financial results show a period of recovery, then there is a likelihood of increased revenues and growth in the future.
  • The company has introduced new product lines and entered new markets.
  • I give the company a neutral rating and encourage you to watch the stock.

Neptune Wellness Solutions (NASDAQ: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 has undergone some turbulence because of the pandemic and because of recent pivots in their business strategy. Neptune’s Q3 financial results show a decrease in revenue and an increase in operating expenses. Some revenue has decreased because of their business pivot from B2B extraction to end-product placement. Other revenues have decreased because of the lack of sales in health and wellness products, cannabis products, turnkey products.

The company is operating at a loss, but there is promise after recovery

Amounts in US$

Q2 9/30/20*

Q3 12/31/20

Q4 03/05/21 E









Share Price







8.44M E***

Cost of Revenue



Gross Profit



Operating Expenses



Net Income



Net Loss






-.13 E




Accounts Receivable



Total Assets



Accounts Payable



Current Liabilities



*Q2 and Q3 numbers may be found on Seeking Alpha

**EV calculations are from www.TIKR.com

***Revenue estimate is from Seeking Alpha

Q3 revenue consisted of CA1.567 million from Canadian sales, CA1.752 million from American sales, and CA533K from sales in other countries. Q2 Revenue consisted of CA7.996 million from Canadian sales, CA20.645 million from American sales, and CA44K from sales in other countries. Revenues from royalty streams from MaxSimil were CA523K for Q3 and CA339K for Q2.

This article was written by

Alan Sumler profile picture
Welcome to the home of The Cannabis Report: a monthly report on the cannabis industry. I am an analyst and consultant in the cannabis industry. I have contributed to High Times Magazine. I currently have a book out, Cannabis in the Ancient Greek and Roman World. I am most interested in technical stock analysis, option strategies, small cap strategies, and emerging markets. Feel free to contact me with any questions about the cannabis industry or publicly traded stocks in the cannabis industry.

Analyst’s Disclosure: I am/we are long NEPT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

NEPT loss over the last year is greater then the current market cap. It is spiraling around the drain.

I would think of shorting NEPT but its market cap 93 mill CAD is approaching the value of its tangible property 65 mill CAD (both number from yahoo as of 6/31) so there is less down side profit to be made.
I liked the idea of processing the cannabis. Extract production was supposed to be more profitable than growing plants. They built a plant for cannabis extraction. Then I heard they were selling hand sanitizer with Jane Goodall and Forest Remedies, and talking about becoming a consumer package goods company. Then they came out with a couple hashish products. Next I hear they're buying an organic baby food company from Morgan Stanley and thought that sounded promising. They're working with Morgan Stanley. Through all this, the shares were heading south. Decided to do a deep dive and looked up the products online, Amazon mostly. Found they had a couple different varieties of each product. The bargain bins in the grocery stores are full of hand sanitizer, so don't know about that. I looked at the conference call and found out they're no longer doing extraction. So they spent however much on an extraction plant and a year later they're out of the extraction business and selling like 6 products on Amazon, and supposedly in parts of Canada. They're a long way from a CPG company. Sell this turkey before they go bankrupt.
gimmeecoffee profile picture
Geez, you would think the news that allows them to actually sell pre-rolled joints and such would make this go in another direction except down. They followed up the good news about selling actual pot with a new prospectus to sell shares in the future, so I am sure that is spooking people as they just know this crappy management team will be more than happy to dilute. Really wish they actually find a way to make some money without diluting, I am not in deep here, but can't believe a company that deals in legal drugs can't make money after all this time. New York going to legalize soon, maybe one day we see a PR about them going into that market with the good stuff. I bought in at an average price of 2.21 last year, have been writing covered calls since I owned it so pretty much about even, but I haven't been able to write any decent covered calls recently at these crappy prices.
Flip4Flop profile picture
Been holding for anoint a month from 1.45. Going to hang around for another month or so to see if this moves on any other cannabis news upcoming if it does I’ll tag along for a bit more with tighter stops.
CaptainChaos profile picture
Been holding for while, hopefully they turn the corner soon.
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