The Valens Company Inc announced that its Pommies subsidiary, also known as Southern Cliff Brands, has been issued a micro-processing licence from Health Canada for its manufacturing facility located in the Greater Toronto Area (GTA).
It noted that the addition of the licence extends its active manufacturing platform from Western to Eastern Canada, increasing speed-to-market capabilities while optimizing distribution cost-savings and efficiencies.
The GTA Facility provides Valens with an additional 30,000 square feet of licensed production and manufacturing space to execute on its cannabis-infused beverage commercialization and distribution strategy, the company added.
READ: The Valens Company closes C$54.3M acquisition of Citizen Stash Cannabis in all-stock deal
"Despite delays caused by the pandemic, we have achieved a major milestone in our domestic expansion strategy with the receipt of this micro-processing licence," CEO, co-founder and chair Tyler Robson said in a statement.
"As one of the first companies to launch cannabis-infused beverages in Canada, we quickly learned what was required to succeed in the category – quality and innovation,” he added.
Valens said the facility can support eight million units per year on a single shift and can produce cannabis-infused beverages in both cans and PET bottles across various sizes and formats including carbonated and non-carbonated juices and waters, drops and single shots.
It said the facility is right-sized for the Canadian cannabis industry today and was designed with ample space for expansion if and when required, with minimal additional capital expenditures.
The facility is also strategically positioned north of Toronto and near Pearson International Airport, providing for optimal shipping into Canada's largest markets while utilizing significant amounts of automation. This is anticipated to enhance margins on beverages as they are currently being manufactured out of Valens' Kelowna campus in Western Canada, it said.
“We have been working tirelessly to strengthen our resources and capabilities to continue successfully serving the cannabis-infused beverage market in Canada,” Robson concluded.
“With the ability to utilize the GTA Facility, we are ready to put our best foot forward and lead the category with a variety of exciting new products which will be available to our customers and consumers over the coming quarters."
In 3Q 2021, Valens' estimated share of the cannabis-infused beverage category grew to around 9.0% from 5.5% in Q1 2021 in Alberta, British Columbia, and Ontario, based on Hifyre data, with only one customer in this category to date.
Upon commencing commercial operations at the GTA Facility, it said it will seek to grow its market share in the beverage category by accelerating the penetration of its internal brand portfolio, increasing its partnership network and expanding its product portfolios with existing customers.
All production equipment at the GTA Facility is fully operational and is expected to be commissioned in the coming weeks.
The company said it expects to begin manufacturing, commercializing and shipping products from the GTA Facility in the first fiscal quarter of 2022 and anticipates an increase in utilization over 2022 as the demand for its products continues to grow.
Additionally, Pommies expects to imminently submit a sales licence application for the GTA Facility.
Valens 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.
The company's 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 the author at stephen.gunnion@proactiveinvestors.com