Neptune Announces a Definitive Agreement with International Flavors & Fragrances to Co-Develop Hemp-Derived CBD Products
Partnership to Accelerate Neptune’s Entry into the B2C Market with the Forest Remedies Brand Plans Are to Develop Branded Products Across the Large and Growing Cosmetics, Personal and Home Care Markets
Neptune Wellness Solutions Inc., a health and wellness company focused on extraction, purification and formulation of cannabinoids, is pleased to announce that it has entered into a collaboration agreement with International Flavors & Fragrances Inc. (NYSE: IFF) (“IFF”) to co-develop hemp-derived CBD products for the mass retail and health & wellness markets. App Connect Service, Inc. (“App Connect”) is also a party to the agreement to provide related branding strategies and promotional activities. In conjunction with the co-development partnership, Neptune will issue to warrants(1) to IFF.
Under this strategic product development partnership, IFF will leverage its intellectual property (IP) for taste, scent and nutrition to provide essential oils and product development resources. Neptune will leverage its proprietary cold ethanol extraction processes and formulation IP to deliver high quality, full- and broad-spectrum extracts for the development, manufacture and commercialization of hemp-derived products, infused with essential oils, for the cosmetics, personal care and home care markets.
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The first products are expected to launch under Neptune’s Forest Remedies brand at U.S. retailers in the first half of calendar 2020. The Initial launch will include a variety of topical products across the aromatherapy category, a market estimated at approximately $3 billion annually. Additional category launches should follow and the total SKU count could ultimately exceed 50 SKUs. Neptune will be responsible for the marketing and sale of the products. Neptune will record revenues from product sales and in turn will pay a royalty to each of IFF and App Connect associated with the sales of co-developed products(2).
“The agreement represents a significant event in the development of our global cannabis business, expanding our business model from primarily B2B to include a robust B2C business platform. IFF has an impressive track record, remarkable capabilities and global reach. This partnership will accelerate Neptune’s vision and growth strategy to be the leading producer of hemp extracts ingredients and finished products for the global health & wellness and Consumer Packaged Goods industries. We are also now better positioned to leverage our management’s experience building brands and relationships with key North American retailers,” stated Michael Cammarata, CEO of Neptune.
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“We are pleased to enter this strategic partnership and drive innovation that satisfies customers’ demands for quality, sustainability and traceability,” said Nicolas Mirzayantz, Divisional CEO, Scent at IFF. “The hemp-derived CBD products we are developing will target consumer preference towards natural health & wellness products.”
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