The Valens Company (TSX:VLNS, OTCQX:VLNCF) Inc. has announced an exclusive partnership with Epsilon Healthcare Limited, a diversified global healthcare and pharmaceuticals company, for access to Epsilon's Good Manufacturing Practices (GMP) facility in Australia for manufacturing products.
In a statement, Valens said the partnership furthers its international expansion to GMP's markets in Latin America, Europe, UK, and the Asia-Pacific regions.
Products will be distributed through Valens' Australian distribution partner, Cannvalate PTY Ltd, and to date, will be the largest quantity of products provided to Cannvalate for distribution.
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The partnership is reflected in the terms of the Binding Heads of Agreement between Epsilon, THC Pharma -- Epsilon's wholly-owned subsidiary, and owner of the Southport Facility -- Valens, and Valens Australia Pty Ltd -- Valens' wholly-owned subsidiary.
With the partnership, Valens said it continues its "revenue first, capital-efficient" strategy of expanding internationally.
As part of the agreement with Epsilon and Cannvalate, Valens said it will be provided with access to Epsilon's GMP manufacturing capabilities at the Southport Facility in Queensland, the largest cannabis manufacturing facility in the Southern Hemisphere.
The partnership also marks the first GMP manufactured products to be sold through Valens in Australia and provides Valens with the capability to deliver GMP-grade products to Latin America, Europe, UK, and Asia-Pacific.
Key transaction details include:
- Valens to fund all operational and capital expenditure of the Southport Facility in return for preferential access for up to 85% of the operational capacity of the facility over the next five years, with an option to extend this arrangement for an additional six years
- Valens to provide operational and management consultancy at the facility to bring its industry-leading intellectual property, technology, and team to take advantage of Epsilon's GMP Manufacturing capability
- Marks first foray into EU GMP medicine production for Valens
- The agreement complements its existing partnership with Cannvalate, opening up GMP manufactured products to be sold through Cannvalate's distribution network. First products manufactured under strategic alliance expected to be delivered in the coming weeks
Valens noted that Epsilon's wholly-owned subsidiary, THC Pharma Pty Ltd (THC Pharma) operates a TGA and Office of Drug Control (ODC) licensed medicinal cannabis manufacturing facility with TGA and EU GMP capabilities in Southport.
THC Pharma's GMP Southport facility is a 10,000 square foot purpose-built botanicals extraction facility capable of extraction of raw plant material and downstream purification and isolation processing.
Epsilon also owns a number of medicinal cannabis assets, including the Tetra Health clinic, and the Medimar Platform – an end-to-end e-commerce solution for nutraceuticals and cannabis. Epsilon also operates a turn-key cannabis cultivation solutions provider in Vancouver, Canada.
"With this partnership, we have fulfilled our promise to achieve GMP manufacturing in 2021 and we have gained access to international cannabis markets through the 'Valens way,' utilizing an asset-light approach that allows us to export to GMP markets globally,” said Valens CEO Tyler Robson.
“We are excited to work with the largest and most advanced cannabis manufacturing facility in the Southern Hemisphere to distribute GMP products, and look forward to advancing our product distribution capabilities through our continued partnership with Cannvalate. We believe this strategic partnership is an efficient use of capital towards accessing GMP quality products and accelerates our timeline to market dramatically.”
Robson added: "With the rapid unit volume growth coming out of our K2 facility that was built to GMP standards, we believe this agreement offers us the best of both worlds - access to GMP manufacturing without giving up on domestic revenue growth opportunities."
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