November 22, 2021 – The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) (the “Company,” “The Valens Company” or “Valens”), a leading manufacturer of cannabis products, today announced that Pommies (otherwise 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 (the “GTA Facility”). With this licence, Valens active manufacturing platform now extends 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 facility can support 8 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. 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 strategically positioned north of Toronto and near Pearson International Airport. This positioning provides 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.
Products developed and manufactured in the GTA facility will utilize Valens’ powered by SōRSE™ emulsion technology, resulting in consumer products that are free of cannabis taste and aroma with predictable onset and offset timing. Valens R&D team has been active in formulating new products soon to be available in the Canadian market and is excited to introduce its innovative pipeline into the beverage and other 2.0 and 3.0 categories.
In Q3 2021, Valens’ estimated share of the cannabis-infused beverage category grew to approximately 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, Valens 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.
“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,” said Tyler Robson, Chief Executive Officer, Co-Founder, and Chair of The Valens Company. “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. We have been working tirelessly to strengthen our resources and capabilities to continue successfully serving the cannabis-infused beverage market in Canada. 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.”
All production equipment at the GTA Facility is fully operational and is expected to be commissioned in the coming weeks. Valens 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.
The micro-processing licence was issued in accordance with the Cannabis Act and Cannabis Regulations and was based on the approval of the site evidence package that was submitted earlier this year in February.
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About The Valens Company
The Valens Company is a leading manufacturer of cannabis products with a mission to bring the benefits of cannabis to the world. The Company provides proprietary cannabis processing services, in addition to best-in-class product development, manufacturing, and commercialization of cannabis consumer packaged goods. The Valens Company’s high-quality products are formulated for the medical, health and wellness, and recreational consumer segments, and are offered across all cannabis product categories with a focus on quality and innovation. The Company also manufactures, distributes, and sells a wide range of CBD products in the United States through its subsidiary Green Roads, and distributes medicinal cannabis products to Australia through its subsidiary Valens Australia. In partnership with brand houses, consumer packaged goods companies and licensed cannabis producers around the globe, the Company continues to grow its diverse product portfolio in alignment with evolving cannabis consumer preferences in key markets. Through Valens Labs, the Company is setting the standard in cannabis testing and research and development with Canada’s only ISO17025 accredited analytical services lab, named The Centre of Excellence in Plant-Based Science by partner and scientific world leader Thermo Fisher Scientific. Discover more on The Valens Company at http://www.thevalenscompany.com.