The Valens Company (TSX:VLNS, OTCQX:VLNCF) Inc has announced third-quarter 2021 net revenue of C$21.0 million, a 15.8% year-over-year increase, as consumer demand for its products continues to be strong.
The company said its provincial listings increased by 37.1% quarter over quarter to 181 at the end of August, making Valens one of the fastest-growing licensed producers in Canada over the quarter and trailing year.
“Our innovative product launches have driven growth in provincial listings and we are only just beginning to see the resulting financial impact with provincial sales net revenue growing 20% quarter over quarter,” Valens CEO Tyler Robson said in a statement.
READ: The Valens Company enters into six manufacturing partnerships
“More importantly, consumer demand for our products is very strong, leading to even greater growth in consumption-level retail sales for Valens products which were up 76.5% quarter over quarter,” Robson added.
Valens also noted that its beverage market share increased to 9.0% during the quarter from 8.0% in 2Q, while its gross margin rose to 26.8% from 22.0% in the previous quarter.
The company ended 3Q with about C$31 million in cash as of August 31, 2021.
Valens added that it now has a presence in seven Canadian provinces, which is expected to increase to nine provinces plus the territories following the successful closing of its Citizen Stash acquisition.
As well, the company said it strategically transitioned away from underperforming B2B partners during the quarter, focusing instead on fewer, bigger, and better partnerships.
In a note to clients on October 13, analysts at Stifel GMP called the company’s financial results “mixed”, but said the underlying trends are “encouraging”, citing a continued rapid expansion in access to recreational cannabis shelf space along with strong consumer demand.
“Our positive stance on VLNS (Valens) is supported by: 1) VLNS having exposure to the entire Canadian cannabis market, US hemp-derived CBD market and international opportunities; 2) its flexibility to produce every product format available, thereby maximising its utility to brand partners/LPs; and 3) optionality to address potential ~$300M tolling opportunity from flower oversupply conditions,” the analysts wrote.
The Valens Company (TSX:VLNS, OTCQX:VLNCF) is a profitable British Columbia-based producer of cannabis products, medical and recreational, and it is scaling up operations. The company can process over 425,000 kilograms of biomass per year and its services include numerous types of proprietary extraction, analytical testing, formulation, cultivation, and research, as well as white label product development.
Valens’ products include tinctures, two-piece caps, soft gels, oral sprays, and vape pens as well as beverages, edibles, injectables, and natural health products and it has a strong pipeline of next-generation products in development.
Contact Sean at sean@proactiveinvestors.com