Adam JacksonNovember 14, 2022
Despite revenue gains, company recorded a net loss of C$100M.
The Valens Company Archives - Green Market Report
Adam JacksonNovember 14, 2022Adam JacksonOctober 13, 2022
Shares for The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) ticked up this morning as the company has managed to cut its losses, which had been far outpacing revenue over the past year.
The company, which announced an acquisition deal with SNDL, Inc. (Nasdaq: SNDL) in August, released its third quarter financial report card for the period ending August 31.
Net revenue slumped further to $20.3 million in the third quarter, down 15.4% versus revenues of $24.0 million in the second quarter — as double-digit growth in provincial sales was more than offset by declines in Green Roads and B2B bulk sales, the company said.
Net loss for the third quarter was $27.5 million, a 83% improvement versus the massive $160.8 million loss in the previous quarter, according to company filings. The company reported a loss of 34 cents per share.
“Our third quarter results clearly show that we are executing on the most important initiative in this environment which is cash flow,” said Tyler Robson, Chief Executive Officer of The Valens Company.
Filings show that $(7.6) million cash flow from operations for the third quarter improved by $12.2 million or 61.7% quarter-over-quarter, beating previous guidance of $(9) million to $(12.5) million.
Robson added that the company could have performed even better, “but our momentum was muted by the cybersecurity attacks on the Ontario Cannabis Store and the labour strike impacting the British Columbia market.”
Adjusted gross profit increased by $900,000 in the third quarter to $5.1 million versus $4.1 million in the second quarter.
The company saw $32.2 million worth of cash, restricted cash, and marketable securities at the close of the third quarter.
Valens withdrew all previously given financial guidance due to the proposed acquisition of the company by Sundial.
“During the quarter Valens entered into an arrangement agreement to be acquired by SNDL to create a leading vertically integrated cannabis platform in Canada,” said Robson. “With the current market economic headwinds, we believe the pro forma company will be well positioned to capture market share while also providing our investors with exposure to one of the strongest balance sheets in the industry.
“Moreover, the pro forma entity will be the largest revenue generating cannabis company in Canada with a near term opportunity to become one of the most profitable cannabis companies in Canada.”
Debra BorchardtAugust 22, 2022
SNDL Inc. formerly known as Sundial (Nasdaq: SNDL) is buying The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) in a deal valued at C$138 million. That’s an implied value of $1.26 per Valens share, which is currently selling at 83 cents per share.. SNDL has secured a non-revolving term loan that has been refinanced and upsized with an additional C$14.3 million of incremental capital, increasing the term loan to C$60 million. There is an $8 million termination fee attached to the transaction and Valens shareholders will own approximately 9.5% of the combined company.
The acquisition will make SNDL one of the largest adult-use cannabis manufacturers and retailers. The combined company will have 555,500 square feet of cultivation and manufacturing space and 185 cannabis stores under the Spiritleaf and Value Buds banners. The new SNDL will offer a complete portfolio of branded products to consumers in Canada through its own supply and distribution channels.
“This powerful combination will result in the creation of a dominant vertically integrated company, exceptionally well-suited to weather the current cannabis environment and become a leader in the Canadian regulated products sector,” said Zach George, Chief Executive Officer of SNDL. “SNDL’s existing consumer packaged cannabis business will be transformed by Valens’ high-quality extraction, processing, and manufacturing capabilities and aligns well with our strategic vision to delight consumers with a full range of quality cannabis products and experiences. Our companies have been commercial partners since Canadian legalization. I am excited by the strong cultural fit between our teams and humbled by the opportunity to work with Valens’ passionate and innovative leadership.”
In July, Valens reported its second quarter fiscal year 2022 financial results for the period ending May 31, 2022. The company reported that its net revenue increased 3.5% sequentially to $24.0 million in the second quarter versus $23.2 million in the first. The company said the increase was driven by double-digit growth in both Green Roads and B2B, which was partially offset by a decline in provincial sales. However, Valens also delivered an eye-popping net loss of $160 million for the second quarter versus a net loss of $25 million in the first quarter. Valens said that it recognized an impairment loss on goodwill and intangible assets of $52.9 million and $67.9 million, respectively, for the quarter. Valens also provided revenue & EBITDA estimates for 2023 for a minimum revenue of C$225 million and Adjusted EBITDA margins greater than 10%.
“We are thrilled to bring together two best-in-class cannabis companies that have extremely complementary assets to create a true market leader. Valens is one of the fastest growing branded cannabis companies in Canada with a focus on innovation and investing in low-cost automated manufacturing assets,” said Tyler Robson, Chief Executive Officer of The Valens Company. “With SNDL’s exceptional balance sheet and largest cannabis retail network in Canada we look forward to taking Valens’ brands to new heights and unlocking 2.0 products for the SNDL platform. We believe the pro forma company provides investors with attractive exposure not only to the highest revenue generating cannabis company in Canada trading well under its tangible book value but also a dominant platform that can become a global leader in cannabis.”
Debra BorchardtJuly 14, 2022
The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) reported its second quarter fiscal year 2022 financial results for the period ending May 31, 2022. Valens reported that its net revenue increased 3.5% sequentially to $24.0 million in the second quarter versus $23.2 million in the first. The company said the increase was driven by double-digit growth in both Green Roads and B2B, which was partially offset by a decline in provincial sales.
The company also delivered an eye-popping net loss of $160 million for the second quarter versus a net loss of $25 million in the first quarter. Valens said that it recognized an impairment loss on goodwill and intangible assets of $52.9 million and $67.9 million, respectively, for the quarter. In the same period, unrelated to the goodwill and intangible impairment charges, the company also said it recognized impairment losses of $4.1 million on prepaid deposits, $2.8 million on assets held for sale, and an inventory write-down of $13.9 million. Valens said it does not expect the impairment charges to have any impact on future operations, nor affect its liquidity, cash flow from operating activities, or compliance with the financial covenants set forth in the loan agreement.
“The second quarter of 2022 clearly shows that we are executing on our 2022 objectives showing both modest revenue growth in the quarter and a meaningful decline in both cash burn and SG&A expenses. This is expected to accelerate in future quarters as the majority of cost savings from our Integration Initiatives have not been fully realized as these initiatives were executed part way through Q2 and into Q3 2022” said Tyler Robson, Chief Executive Officer of The Valens Company.
“The largest takeaway in the quarter is that we were able to achieve these strides forward despite a revenue decline in our largest segment, provincial sales, where we experienced absent depletion weeks as we transitioned our brand from Verse to Versus,” Robson continued. “Despite the temporary setback in provincial sales, we continue to see strong sell-through for our brands at retail as we were able to expand market share across all product categories. More importantly, momentum has reaccelerated in June with record monthly provincial sales as well as seeing strong visibility into our pipeline of purchase orders into July. During Q2, we experienced strong growth in all other categories of our business with double-digit growth quarter over quarter in our US Green Roads CBD and B2B segments, as well as a large increase in international sales,” he said.
Outlook
Valens also provided revenue & EBITDA estimates for 2023 for a minimum revenue of C$225 million and Adjusted EBITDA margins greater than 10%.
“Encouragingly, we’ve continued to make progress against our Integration Initiatives, having actioned $15 million and now expecting to exceed the $20 million in targeted cost savings. Looking ahead, we intend to realize these cost savings in the coming quarters, which when achieved would lead to a material step down in our overall cost structure. We are well positioned to continue our strategic initiatives and pave the way towards a more profitable future.” Robson added.
StaffApril 14, 2022After the market closed on Wednesday, The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) reported its first quarter fiscal year 2022 financial results for the period ending February 28, 2022. Valens reported that net revenue increased 26.1% sequentially to $23.2 million in the first quarter from $18.4 million in the fourth quarter. The company said it benefited from strong Canadian operations, which represented 73.7%of total sales in the first quarter.
Net Losses Grow
The net losses increased to $25 million over the previous quarter’s net loss of $21 million. The company did say it planned to reduce cash burn through improvements in adjusted EBITDA, working capital management and monetization of non-core assets.
Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company, said: “The results from the first quarter demonstrate that Valens’ underlying business has passed an inflection point. Valens delivered strong top line growth despite many headwinds in the marketplace. This performance reinforces the importance of Valens now diversified business lines across provincial sales, B2B LP sales, and Green Roads sales. Diversified business lines are now allowing us to deliver more sustainable growth. To that point, we delivered another quarter of strong provincial sales as we continue to grow our recreational market share, with the launch of Versus and Contraband. We are also pleased to report that our B2B segment has returned to growth, and we remain optimistic that this platform will continue to strengthen as our partners optimize their manufacturing processes amid both industry and economic headwinds. Our Green Roads US CBD business saw a modest decline in revenue primarily due to normal seasonal trends, with December being historically its slowest month.”
Robson continued, “As expected, adjusted EBITDA declined quarter over quarter due to an inefficient cost structure that had not yet benefited from our Integration Initiatives announced in late February and a change in sales mix that saw a lower percentage of sales come from our higher margin Green Roads business and greater percentage of our sales come from our B2B customers. In addition, we took the opportunity to exit some higher priced inventory through the B2B channel and reposition our holdings to better support the anticipated growth in future quarters. These factors also resulted in lower gross margins in the quarter. Importantly, subsequent to quarter end, we are already seeing the benefits of our Integration Initiatives and anticipate realizing improvements to our cost structure in the back half of the year. It was also encouraging to see gross margin improvements in provincial sales despite significant retail price compression and increases in supply chain costs in the quarter. Overall, our business remains on track to deliver on our objectives in 2022, and we reiterate our target to achieve positive adjusted EBITDA in Q4 2022.”
Outlook
Valens gave revenue & EBITDA Guidance for 2023 saying it would have minimum revenue of C$225 million and adjusted EBITDA margins greater than 10%.
Jeff Fallows, President of The Valens Company, said, “In Q1 2022, we took action to align our Company to current market conditions and deliver the value we saw in the acquisitions and other strategic changes we made in 2021. More specifically, we implemented a series of Integration Initiatives aimed at driving efficiencies throughout the organization and right sizing our cost structure to ensure we remain nimble and aggressive in a competitive market. With these initiatives now firmly underway and following our recent CDN$32.3 million financing we believe we have the branded product portfolio, manufacturing capabilities and balance sheet strength to pursue our key strategic objectives in 2022.”
Debra BorchardtMarch 1, 2022After the market closed on Monday, The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) delivered its fourth quarter and fiscal year financial results for the period ending November 30, 2021. Valens reported total revenue of $23.3 million for the fourth quarter, which fell sequentially from the third quarter’s total revenue of $24.5 million.
The net loss for the quarter increased to $21 million from the third quarter’s net loss of $12 million. Valens said that despite the decrease in net revenue quarter-over-quarter, the adjusted gross profit increased by 9.1% to $6.3 million from $5.7 million in the third quarter. The earnings per share for the quarter were ($0.34) and the company noted that the per share dollar amounts have been adjusted for the 3-for-1 consolidation announced on November 15, 2021
The total sales for the full year of 2021 were $90.1 million, an increase over 2020’s full-year total sales of $86 million. The net loss for the full year though rose to $49 million over last year’s net loss of $20 million. Net revenue of $78.2 million in the fiscal year 2021, represented a decrease of 12.3% over the third quarter and was driven by a decline in B2B as Valens aggressively moved to align with the ‘fewer, bigger, better’ strategy for customers. Both provincial sales and Green Roads showed strong growth in contributed revenue in Q4 2021 as discussed above.
“This quarter showcases the progress we have made in our business plan in key areas despite a competitive and challenging operating environment in Canada and globally,” said CEO Tyler Robson. “Net revenue slightly declined quarter-over-quarter as we completed the transition of our B2B business to align with the ‘fewer, bigger, better’ strategy and was negatively impacted by the floods in British Columbia which resulted in supply chain disruptions. However, in our two key revenue segments, we are very pleased with the industry-leading growth in provincial sales revenue and the full quarter revenue generated by our Green Roads US CBD business. With the B2B transition largely behind us, we expect to have more sustained growth in 2022.”
Valens had a cash and marketable securities position of $19.1 million at the end of the quarter and after the quarter raised $40 million in debt financing. Proceeds from the debt financing were used to repay previous existing debt and for general working capital purposes.
Robson continued, “A bright spot in the quarter was our adjusted gross profit margin which increased from 27.4% in Q3 2021 to 34.1% in Q4 2021. I am very proud of our operations and logistics teams which have had to deal with a significant business transition over 2021 as well as automation delays, inflationary cost pressures, supply chain disruptions, and the flooding in British Columbia. With further automation and our recently announced integration initiative, we are now heading down the path towards profitability. This supports our confidence and commitment to achieving both positive adjusted EBITDA by Q4 2022 and our revenue guidance for 2023 of at least $225 million.”
All the numbers reported were in Canadian dollars.
StaffAugust 31, 2021
The Valens Company Inc. (OTCQX: VLNCF) is buying Citizen Stash Cannabis Corp. (formerly Experion Holdings Ltd) (TSXV: CSC) (OTCQB: EXPFF) in an all-stock deal valued at approximately $54.3 million on an enterprise value basis. Citizen Stash shareholders will receive 0.1620 of a Valens common share for each Citizen Stash Common Share held. The Exchange Ratio implies a premium per Citizen Stash Common Share of approximately 35.1%. Valens said the Citizen Stash acquisition is expected to be accretive in 2021 and 2022 before synergies and will provide Valens with a strategic, asset-light expansion into flower and pre-rolls, the largest segments of the Canadian cannabis market currently accounting for over 70% of retail sales. Prior to the acquisition, Citizen had signed a processing agreement with The Valens Company to outsource the production of Citizen Stash pre-rolls, supporting a lower cost of goods moving forward for pre-rolls.
Citizen Stash is a licensed cultivator and processor of premium craft cannabis products based in Mission, British Columbia. Citizen Stash operates an asset-light platform made up of a network of craft contract growing partners from which it selectively sources premium bulk flower grown from Citizen Stash’s industry-leading proprietary genetics. Citizen Stash manufactures and packages flower and pre-roll products primarily through manual processes. Last month, Citizen reported that its gross revenue increased 92% in Q2 2021 to $3.3 million versus $1.7 million in Q2 2020.
“We are excited to join forces with Citizen Stash’s experienced team and broaden our offerings in the flower and pre-roll verticals with a best-in-class brand.,” said Valens CEO Tyler Robson. “The premium price tier of the flower and pre-roll segments represents the best expansion opportunity for Valens in the flower category, as premium brands are the hardest to build, while also capturing the highest margins. Citizen Stash’s asset-light model, and proprietary genetics will provide us significant operational flexibility and an opportunity to leverage the growing capabilities of our existing LP partners. In short, this strategic acquisition will allow Valens to significantly expand its presence in the recreational market and capture a share of the largest categories of the Canadian cannabis space without the burden of a high-cost growing infrastructure. We are opportunistically expanding our product offering to align with consumer demand for high-quality craft cannabis flower and pre-rolls.”
Citizen Stash
Citizen Stash is reported to be one of the top-performing premium brands in the flower and pre-roll categories. Based on Hifyre data for the flower category during March to May 2021 in the markets of Ontario, Alberta, and British Columbia, Citizen Stash is the highest-ranked premium brand by market share in the flower category with an average selling price above $13.00 per gram and is the only brand in the top 20 by market share with an average selling price above $13.00 per gram. Within the pre-roll category during March to May 2021 in the markets of Ontario, Alberta, and British Columbia, Citizen Stash is the third-highest ranked premium brand with an average selling price above $13.00 per gram and one of only five within the top 20 overall brands.
Jarrett Malnarich, Chief Executive Officer of Citizen Stash, said, “Combining our business with The Valens Company represents an outstanding opportunity for our company and the shareholders of Citizen Stash and is wholeheartedly endorsed by our Board of Directors. We look forward to the full integration of Citizen Stash with The Valens Company. We believe the combination will create a leading platform in the Canadian cannabis industry which spans all categories, while focusing on profitability and creating value for all shareholders. Together we look forward to taking the Citizen Stash brand to new heights that Citizen Stash could not have achieved on its own, by leveraging Valens’ best-in-class, low-cost manufacturing capabilities and industry-leading distribution scale. In our collaboration with Valens to date, Citizen Stash has come to realize the common values we share centered around providing consumers with the highest quality cannabis products.”
This acquisition is anticipated to solidify Valens’ position as a top tier cannabis company by enhancing the Company’s market share and adding an innovative, premium flower brand to its portfolio. Closing of the Citizen Stash transaction will mark the third acquisition Valens has made this year, which will accelerate Valens’ strategic initiative to create a leading global manufacturing platform, capture market share through innovative product launches with unique consumer experiences, and expand on its existing domestic and international distribution network to better capitalize on the global opportunity.
Debra BorchardtJuly 15, 2021After the markets closed on Wednesday, The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) delivered its second-quarter financial results ending May 31, 2021. Valens reported that its revenue increased 16.1% to $20.5 million versus $17.6 million in the second quarter of 2020. The net loss was $8.6 million in the quarter versus $3.5 million for the same time period in 2020.
Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company, said: “We believe that our business model remained resilient despite ongoing challenges presented by the pandemic, and our strategy continued to demonstrate its effectiveness as we gained significant market penetration across the country. We are proud to share that in the second quarter alone, Valens had 132 SKUs listed in Canada – a 76% increase in comparison to 75 SKUs listed in the first quarter of 2021. This material growth in SKU listings stands in stark contrast to many of our competitors in the sector and is a testament to the innovation and quality we are bringing consumers and retailers.”
The adjusted EBITDA was $(5.0) million in the quarter versus $2.7 million, or 15.3% of revenue in 2020 for the second quarter. President Jeff Fallows said: “Predictably, our accelerated launch of a targeted portfolio of high-volume SKUs resulted in an increase in costs which impacted our adjusted EBITDA in the quarter. However, we expect these costs to produce accelerated revenue and margin growth in the coming quarters particularly as we achieve greater utilization of our largely completed manufacturing platform.”
Green Roads
In June, Valens entered the US market with the acquisition of Green Roads for $40 million. With the Green Roads acquisition, Valens more than triples its total addressable market and secures a global leadership position in the cannabis health and wellness vertical with one of the largest CBD brands by market share. Additionally, the acquisition strengthens Valens’ capabilities to supply global markets with an expanded product offering and increased speed to market with a US-based manufacturing and cGMP certified co-manufacturing platform. Valens said it plans to invest approximately $10 million into Green Roads to strengthen its resources across various business lines, including sales and marketing. Valens said that in the back half of the year, it will introduce Green Roads’ CBD products to the Canadian market.
Looking Ahead
Fallows added, “We continue to dedicate efforts and remain keenly focused on completing our listing on the Nasdaq which we expect to be completed in the third quarter of the 2021 calendar year, and which has been fortified by our US entry. These initiatives will be instrumental in advancing global market opportunities and will lead to Valens accomplishing its strategic and operational growth objectives which we believe will be transformational for the company, generate additional sources of sustainable revenue, and drive shareholder value. We continue to maintain a strong balance sheet as we successfully raised additional capital from our bought deal financing which closed after the quarter. This equity raise provides Valens with the capital to pursue its strategic initiatives, specifically by taking an opportunistic approach to additional accretive acquisitions and to further secure our entrance into additional Cannabis 2.0 and 3.0 product verticals.”
The company noted that its recent $46 million bought deal financing was closed subsequent to quarter-end on June 1, 2021. The company said it plans to use the bulk of the net proceeds, $28 million, to pursue opportunistic acquisitions and business expansion opportunities across North America and international markets. The remaining proceeds will be used for capital expenditures, working capital, and other global general operating expenses.
Robson concluded by saying, “Importantly, we are seeing this momentum continue into the third quarter with an additional 40 SKUs accepted by the provincial boards with shipments during the third and fourth quarters. These new listings include products from four newly entered categories during the second quarter, such as flower, pre-rolls, topicals, and edibles, with many of them already receiving high consumer acclaim. Additionally, we have enhanced our platform with increased technical capabilities and greater efficiency to develop and commercialize winning products, which we expect will drive revenue growth in the second half of fiscal 2021. We look forward to continuing to drive new product innovation in the sector, specifically in the flower, pre-roll, beverage, concentrates, and edibles categories. With our recent distribution wins into New Brunswick, Manitoba, and Yukon, we are positioned well to capitalize on these investments.”
StaffJune 21, 2021
The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) has closed its previously announced acquisition of Green Roads and its manufacturing subsidiary. The value of the deal totaled $40 million, plus up to an additional $20 million in contingent consideration, which will be paid when the company hits certain EBITDA milestones. If all the milestones are met in 2022, the transaction represents approximately 4.5x fiscal 2022 EBITDA.
Based in South Florida, Green Roads is the largest privately-owned CBD company in the United States, with a focus on quality from its pharmacist-founded background. Green Roads says it boasts a leading market share and brand platform in the US CBD industry, with an extensive distribution network consisting of over 7,000 retail stores and a robust e-commerce and marketing platform with over 30,000 five-star reviews across all its product lines. Green Roads is currently one of a small number of US CBD companies that produce their products in their own cGMP facilities, a testament to their dedication to integrity and excellence.
Valens said that over the next year it expects to invest approximately $10 million into the Green Roads business to capitalize on the anticipated growth of the US CBD market, projected to reach roughly $15.9 billion by 2026. The investment in Green Roads is expected to contribute to the further development of its highly successful e-commerce platform, support the expansion of its retail distribution network in the US, and increase the brand’s sales and marketing resources to drive market leadership in the health and wellness vertical.
“With the closing of this Acquisition, Valens now has a significant presence in the largest cannabinoid market in the world, representing a monumental step in our international expansion strategy and furthering our vision of becoming a global manufacturer of cannabis consumer packaged goods,” said Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company. “We expect to realize strong synergies and to aggressively pursue various strategic opportunities that are now available to our combined business through this transaction, including expanding the distribution of our ever-growing product offerings overseas and further disrupting the North American market with innovative cannabis products. The combination of Valens and Green Roads makes for an unbeatable team, diversified distribution network, and unparalleled product development and manufacturing platform, which we expect will provide us the footprint to become one of the biggest players in the global cannabis health and wellness market. Stay tuned for updates on anticipated synergies as we move forward as a stronger, combined company.”
The company’s strategy for buying Green Roads included a direct entry into the US market with a company that had an established manufacturing and distribution platform with a global reach, highly experienced leadership team with a strong knowledge of the US consumer landscape, and a proven track record in cannabis consumer packaged goods manufacturing. It will also strengthen its position in the Canadian market with an expanded offering through the introduction of various CBD products from Green Roads. Valens expects to launch Green Roads products in the Canadian market in the second half of fiscal 2021. Beyond Canada and the U.S., Valens is currently engaged in late-stage discussions regarding various international distribution opportunities in Latin America, Asia-Pacific, and Europe.
Dale Baker, President & Chief Operating Officer of Green Roads, said, “The combination of Green Roads and Valens creates a truly global company with a clear leadership position both within the US CBD market and Canada’s domestic cannabis market. With this larger platform, we look forward to launching Green Roads products in Canada in the second half of 2021 and leveraging our own manufacturing facilities to export CBD products internationally. Valens and Greens Roads have a shared ethos of keeping our customers at the heart of our strategic decision-making and offer complementary products that foster brand loyalty and drive high margins. With our enhanced platform, we look forward to accelerating our global expansion plans and bringing our growing portfolio of products to an even broader customer base.”
Debra BorchardtFebruary 25, 2021The Valens Company Inc. (OTCQX: VLNCF) report its fourth quarter and fiscal year financial results for the period ended November 30, 2020. Valens reported gross revenue for the fourth fiscal quarter fell to $17.9 million from $18.5 million in the third quarter of 2020. The net loss increased to $16.6 million sequentially over the third quarter’s net loss of $3 million.
Full Fiscal Year
Sales for the full fiscal year ending in November were $86 million versus the 2019 fiscal year-end sales of $58 million. The net loss for the full fiscal year of 2020 was $20.6 million versus 2019’s net loss of $6.5 million. Product sales increased 237% to $54.7 million in the fiscal year 2020 over 2019
“In fiscal year 2020, we transformed Valens from a leading extraction company into the industry’s most trusted third-party manufacturer of cannabis consumer packaged goods. Over the course of the year, we strategically employed our human and capital resources to strengthen our platform and build the infrastructure required to offer what we believe are the most innovative and cost-competitive product manufacturing capabilities in the market today,” said Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company. “Moving into 2021 with a transformed business model, a growing international presence, and over 77,000 square feet of manufacturing space, Valens is focused on three key initiatives – growing unit volumes per SKU, increasing Cannabis 2.0 and 3.0 product market share, and driving revenues in new consumer verticals. We expect to do this by expanding our provincial distribution capabilities, entering new international markets including the US, and broadening our custom manufacturing and white label partnership network.”
Valens said that it increased its market share to ~4.9% of the Cannabis 2.0 market in Alberta, British Columbia, and Ontario in the fourth quarter based on Headset data and not including B2B LP manufacturing, and grew cannabis-infused beverage market share in Canada to approximately 5.2% in the quarter for its product lineup with only one customer in this category to date. the company also said it cemented its position as the largest third-party vape manufacturer in Canada. Valens said in a statement that it transitioned from shipping bulk distillate in the first quarter of 2020 to shipping hundreds of thousands of finished product units per month in the fourth quarter, resulting in revenue that is expected to be recurring in nature
Looking Ahead
Valens reiterates its previously announced guidance for the first fiscal quarter with revenue projected to be between $19 million to $23 million, driven by the company’s newly launched and operational K2 Facility which is expected to give Valens the ability to increase production capabilities and unit volumes. The company said it ended the year with a current cash balance of $48.7 million, including gross proceeds of $39.7 million from the bought deal financing that closed subsequent to the quarter-end.
Jeff Fallows, President of The Valens Company, said, “Moving into fiscal year 2021, we have already executed on step one of our strategic plan for the year with the announcement of our agreement to acquire LYF and are focused on quickly integrating and realizing on the incredible opportunity we see in adding their edibles platform to our capabilities. With our recent bought deal financing, we are also well-positioned to aggressively pursue available and future growth opportunities, including potential acquisitions.”
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