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Cannabis Extraction Leader Signs Multi-Year Deal With Tilray

Stockhouse Editorial
1 Comment| March 12, 2019

Click to enlargeValens GroWorks Corp. (CSE: VGW, OTCQB: VGWCF, Forum) continues to roll. Only a month earlier, Stockhouse published a feature article on Valens, reporting that the Company had recently executed “multiple cannabis extraction agreements”. Investors wanting more details on those five other, recent extraction deals should reference the earlier article (now six deals with VGW’s most recent announcement).

On February 26, 2019; the Company announced a multi-year hemp extraction agreement with NASDAQ cannabis heavyweight, Tilray Canada Ltd. (NASDAQ: TLRY).

(click to enlarge)

The agreement stipulates an initial two-year term, with an option to renew. It provides for Valens to supply its extraction services to Tilray with respect to both hemp and cannabis (marijuana) extraction. The deal specifies that Valens will extract a minimum annual quantity of 15,000 kilograms of dried cannabis (from both hemp and marijuana plants).

This fee-for-service agreement includes the production of crude, distillate, or other cannabis oil derivatives as required by Tilray. Valens also assumes responsibility for shipping these products back to Tilray for final processing and sale.

Tyler Robson, the CEO of Valens framed this announcement for investors:

“Partnering with Tilray to support their existing and emergent product offerings marks another milestone for Valens. We take pride in our proprietary extraction processes and are honoured [that] our best in class extraction capabilities have been recognized by Tilray, a pioneer in the global cannabis market, which we believe is a testament to the quality and reliability of our services.”
One industry leader teaming up with another. With its meteoric rise and multi-billion dollar market cap, Tilray is quickly establishing itself as a major player in the global cannabis market. With Valens recently announcing the expansion of its annual cannabis extraction capacity to 240,000 kilograms of dried cannabis, the Company is one of the global leaders in cannabis extraction capacity as well as extraction methodologies.
The headline from this announcement is that Valens has inked yet another significant cannabis extraction agreement. The sub-text for investors is that this is a Company that is firing on all cylinders in terms of both developing its business model and increasing its scale. And it is translating this increasing scale into near-term revenue streams.
This leads directly back to the strategic decision by Valens to concentrate more of its energies in value-added activities, with the Company’s massive cannabis extraction capacity being the most obvious example. But even that is only a stepping-stone into more value-added activities like vape cartridges, infused beverages, etc. This is now all part of Valens Agritech Ltd.’s activities at VGW’s flagship Kelowna, B.C. facility.
With the “Sorse emulsion technology” that Valens has licensed, the Company is also positioned to enter additional value-added markets, including cannabis-infused beverages. Longer term, Valens is committed to expanding beyond its Canadian base to penetrate emerging international markets. Facilitating international expansion, the Company’s Kelowna facility is fully EU GMP-compliant.
VGW’s rapidly expanding cannabis extraction operations are already rewarding shareholders. With its industry-leading laboratory services and additional value-added strategies, Valens GroWorks is poised to continue its rapid ascent.

FULL DISCLOSURE: This is a paid article of Stockhouse Publishing.

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