Proactive Investors - Run By Investors For Investors
Why invest in VGW?
Valens GroWorks Corporation: DEEP DIVE
OVERVIEW

Valens GroWorks aims to capture a higher-level market in the cannabis extract space

The Kelowna, BC-based cannabis company specializes in the research, development, production, and testing of high-quality cannabis extracts and oils
cannabis extract
OVERVIEW: VGW The Big Picture
Valens uses its proprietary extraction techniques and technologies to help cannabis producers get the most from their plants

Much like the ability of its extracts, the vision of Valens GroWorks (CSE:VGW) (OTCMKTS:MYMSF) has always been clear.

The focus? Pure, high-quality cannabis extracts and oils. 

The origins of the company stretch back more than 15 years: which, in case you haven’t noticed, is tantamount to about a century in other industries, thanks to the ever-changing, booming cannabis industry in Canada.

In short, the roots are deep here -- and planted firmly.

READ: Alta Corp Capital initiates coverage of Valens GroWorks with $5 price target and Outperform rating

“We believe there is better bioavailability in oils,” says CEO Tyler Robson, who took the helm of CEO in May 2017 after previously serving as chief operating officer. “Our focus is extraction. But even above all, we’re about transparency. From seed to sale, we’re transparent in everything we do: from extraction to cultivation -- everything to the point of sale.”

Valens aims to use its proprietary extraction techniques and technologies to help cannabis producers get the most from their plants. It also does a host of other things through its various wholly-owned subsidiaries.

Valens Agritech is a high capacity cannabis extraction and research and development facility.

Valens Labs is an accredited testing laboratory with a Health Canada Dealer’s License, as well as also being ISO 17025 accredited, the gold standard for lab testing. It has been named the “Center of Excellence for Plant Based Science” by $80B science instruments company, Thermo Fischer Scientific (NYSE:TMO).

Lastly, Valens Farms is a 400,000 sq/ft greenhouse cultivation facility that’s currently in development.

Busy few months

It’s been a blockbuster few months for Valens, with a host of deals and accomplishments.

In December, Valens signed a multi-year extraction agreement with behemoth Canopy Growth Corp (NYSE:CGC) (TSE:WEED).

Valens will process Canopy’s whole flower and trim into high-grade cannabis resin. A year earlier, Valens had taken part in Canopy Growth’s CraftGrow program, which allows craft producers to utilize Canopy’s sales channels to market their products.

"We take pride in our proprietary extraction processes and are honoured to be recognized for our capabilities in supporting the growth of the cannabis market, particularly with the increasing role cannabis oils will soon play in the edibles space," says Robson.

READ: Valens GroWorks inks extraction agreement with Canopy Growth

It was a valuable experience and with a cultivation license in hand, Valens plans to launch its own branded products via CraftGrow for the medical and recreational markets by the end of March 2019.

Harvest One deal also compelling

Valens also struck an important deal with global cannabis firm Harvest One (CVE:HVT) (OTCMKTS:HRVOF) in November 2018.

Harvest One, a global cannabis company that develops and provides lifestyle and wellness products in regulated markets, will supply cannabis to Valens over a three-year term. Valens will process the cannabis on a fee-for-service basis into bulk resin or other cannabis oil derivative products.

Valens will also conduct research and development to support the expansion of Harvest One’s product lines, including beverages, vape pens, health and wellness products as well as nutraceuticals using cannabis oil derivative products.

Cannabis beverage deal

One other important deal to note was Valens’ deal signed with US beverage company, Tarukino Holdings Inc in October 2018.

The two-part, multiyear agreement gives Valens the exclusive Canadian rights to a leading proprietary emulsion technology,  known as SoRSE, while also securing rights to a range of popular and proven cannabis-infused beverage brands -- Washington State’s top-selling one, Happy Apple, in fact.

Financing in place

With the global legal marijuana market expected to reach US$146.4 billion by 2025, Valens is in a position to capitalize on international opportunities.

In October, the company successfully raised C$27.3 million in bought deal financing to support expansion, additional extraction capacity and general operations.

The oversubscribed deal with AltaCorp Capital Inc and Mackie Research Capital Corp, as well as Beacon Securities Limited, was to buy 12.8 million units of the company at a price of C$1.95 per unit.

Unlike cultivators, Valens has a range of revenue streams available, that appear to be reasonably low risk, with quick turnover and high margins.

And the path forward looks promising. Notably, tapping into its partnership with Canopy Growth Corp, the world’s largest cannabis company, which will allow the company to distribute, market, and sell Valens-branded products through its CraftGrow network.

With ever-increasing extraction capacity (up 600% in the last year with more to come very soon), a facility expansion complete, alongside a new development with Kosha Projects on Valens Farms to build a 400,000 sq ft greenhouse in BC’s Okanagan Valley, 2019 looks to be an exciting year for Valens.

 

Contact Katie Lewis at [email protected]
Follow her on Twitter: @kelewis

Join Proactive’s Crypto, Blockchain and Cannabis Telegram group here
View full VGW profile View Profile

Valens GroWorks Corporation Timeline

Related Articles

cannabis plan in sun
February 21 2019
The cannabis company will manufacture, infuse and package branded recreational and wellness products
amberlight
June 18 2019
The cannabis company's strategy is to focus solely on the massive California market, where it plans to establish a network of dispensaries with owner-operators
cannabis tablet
February 28 2019
The company fills a niche in the medicinal cannabis market, as it continues to push forward its suite of precision oral dose products

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use