Neptune Receives Health Canada's Amendments to Expand Capacity to 200,000 kg and for Cannabis Oil Capsule Production

Published: June 18, 2019

Neptune Wellness Solutions Inc. has received a notification letter from Health Canada indicating that all requested license amendments have been approved. The scope of the amendment received from Health Canada permits expansion of cannabis operation areas to include an additional extraction room where Neptune will perform cold ethanol extraction. Ethanol extraction is faster and more cost effective than the CO2 extraction currently used and will increase Neptune’s input capacity from 30,000 kg to 200,000 kg.

This seven-fold increase in the Company’s capacity will accelerate production and enable fulfilment of commercial commitments. Start-up activities will begin immediately, including the final stages of commissioning the equipment, and Neptune will ramp up commercial operations on a progressive basis during the second fiscal quarter.

Production of Cannabis Oil Capsules to Commence

The amendment from Health Canada also includes expansion for an encapsulation room where Neptune will produce cannabis oil capsules using the LicapsĀ® technology licensed from Lonza Group AG. The encapsulation equipment is commissioned and ready for commercial operations with a capacity of up to 200 million capsules annually. The LicapsĀ® technology supports differentiated product offerings through its various delivery systems, colours and branding possibilities. Furthermore, this is an effective technology for variable and multiple product formulation runs.

“Congratulations are in order as this announcement marks another milestone achieved by our team by successfully meeting the stringent Health Canada requirements,” said Jim Hamilton, CEO of Neptune. “The new regulations regarding cannabis edibles, extracts and topicals recently published by Health Canada are expected to result in significant additional demand for cannabis extraction and purification services. 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.”

Our Future Plans

Neptune’s Board of Directors recently approved an investment of $7 million to establish additional formulation, manufacturing and packaging infrastructure. This investment will allow Neptune to provide formulation services for new expected product forms such as vape pens, topicals, beverages, sprays, and others. A $4 million investment has also been approved, due to strong customer demand, to increase extraction capacity to a total of 1,500,000 kg, under Neptune’s Phase IIIA expansion plans targeted for completion before the end of calendar year 2019.

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.