The Green Organic Dutchman Holdings Ltd. (OTC: TGODF) said Wednesday that it's entered into a processing and manufacturing agreement with Neptune Wellness Solutions Inc. (NASDAQ: NEPT).
Why It Matters
Under the three-year agreement, Neptune will provide The Green Organic Dutchman with extraction, formulation and packaging services. Doing so will allow The Green Organic Dutchman to scale production, according to the Toronto-based company.
The Green Organic Dutchman will have exclusivity over the extraction, formulation and packaging for certified organic cannabis products for the Canadian market.
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Additional terms of the agreement have The Green Organic Dutchman allocating over 230,000 kilograms of cannabis and hemp to Neptune for the processing of its organic consumer wellness items.
The deal is the largest processing agreement of its kind to date, according to TGOD.
The first year of the agreement is expected to cover 20 percent of the three-year deal’s total value.
"Today's announcement is significant not only because it enables us to start manufacturing certified organic consumer wellness products at scale, but also because of the large and sustained economic impact it will have in Quebec, where TGOD is building the world's largest organic cannabis production facility," TGOD CEO Brian Athaide said in a statement.
What’s Next
The closure of the deal is expected to create "high-value jobs" in the Quebec area, though no estimates were released.
TGOD said it's nearing the end of its first phase of creating the world's largest organic cannabis cultivation center in Valleyfield, at more than 1.3 million square feet.
Over-the-counter TGOD shares were up 0.41 percent at $2.57 at the time of publication Wednesday. Neptune Wellness shares were trading higher by 1.84 percent to $4.73.
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