The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) (the “Company” or “The Valens Company”), a leading manufacturer of cannabis derivative products, is pleased to provide an operational and corporate update regarding the progress of its second white label and custom manufacturing facility in Kelowna and its facility in the Greater Toronto Area (the “GTA Facility”), in addition to an update on the LYF Food Technologies Inc. acquisition (the “LYF Acquisition”).
K2 and GTA Facility Progress Update
The Valens Company has commenced its first shipments of cannabis derivative products from its newly-operational K2 Facility, including a wide range of products such as crumble, beverages, THC drops, vapes, and tinctures. Currently, the Company has commissioned the manufacturing of vapes, tinctures, beverages, and bath bombs in the K2 Facility. Valens intends to further operationalize the facility over the next few quarters to increase the production, packaging, and shipping of its existing portfolio, as well as a number of soon-to-be launched product formats such as hash and pre-rolls.
With the K2 Facility in operation, Valens now has the ability to fully leverage its low-cost cannabis platform to drive product sales, accelerate entry into new innovative product verticals and increase output volumes. The 42,000 square foot K2 Facility is built to EU GMP standards and designed to efficiently execute on each step of the cannabis consumer packaged goods supply chain, positioning the Company as a leader in Cannabis 2.0 and 3.0 product manufacturing.
“The K2 facility significantly bolsters our market position by giving us the operational footprint and expertise to fulfill the Valens vision and make us the go-to name in cannabis consumer packaged goods manufacturing in Canada and beyond,” said Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company. “We are in the process of ramping up our K2 Facility in order to accommodate the growth we expect to see in our product volumes, launches and provincial demand – especially as we begin to introduce product formats that are new to the Canadian market.”
Additionally, construction is nearing completion at the Company’s GTA Facility which will focus on manufacturing products with SōRSE™ by Valens technology, including the production and co-packing of cannabis-infused beverages. Valens is in the process of finalizing its Health Canada cannabis micro-processing licence application and site evidence package for expected submission in February.
LYF Acquisition Update
The Company is preparing for the integration of LYF’s platform and workforce as the LYF Acquisition closing process continues.
Last week, LYF received an amendment to its existing standard cannabis processing licence, authorizing the sale of cannabis derivative products. Under the amended Health Canada standard processing licence, LYF is now permitted to sell cannabis products, including topicals, extracts and edibles, directly to provincially and territorially authorized retailers from its 10,500 square foot edibles manufacturing facility in Kelowna, British Columbia. With this licence amendment, LYF is able to further leverage and provide additional sales capabilities to its partner network, including licensed producers, third-party operators, and brand houses, which were previously only obtainable through B2B sales channels.
Jeff Fallows, President of The Valens Company, said, “The Valens team congratulates LYF on this milestone achievement which is the culmination of years of dedication and hard work. Not only will this amended licence work to widen LYF’s domestic reach, but it will also benefit consumers nationwide who have been awaiting increased access to more advanced and innovative edible products at affordable prices. Following the closing of the LYF Acquisition, we look forward to bringing LYF’s next generation product capabilities to our existing customer base, and further increasing our position as a leading third-party manufacturer.”
Pending closure of the LYF Acquisition, the LYF facility, in addition to Valens’ K1 and K2 Facilities, will serve as 2.0 and 3.0 manufacturing and sales hubs for LYF and Valens’ combined roster of new and joint customers, including consumer packaged goods companies who have demonstrated interest in the cannabis space. LYF’s edible products are expected to be ready for shipment from its facility directly to provinces and territories in the second quarter of 2021.
The closing of the LYF Acquisition remains subject to approval from the Toronto Stock Exchange and customary conditions, and approvals from senior lenders. The LYF Acquisition is on track to close on or around February 18, 2021.