FUNMAN
2 years ago
The Valens Company Signs Exclusive Cannabis Partnership with Coldhaus Distribution
Agreement secures a dedicated field team under a direct-to-store management model for Valens-branded products, driving sales through a robust distribution network
Kelowna, B.C., June 22, 2022 – The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS)) (the “Company” “The Valens Company” or “Valens”), a leading manufacturer of branded cannabis products, today announced that it has secured an exclusive cannabis partnership with Coldhaus Distribution (“Coldhaus”) to provide integrated logistics solutions for Valens-branded cannabis products across Ontario, Alberta, and British Columbia.
Pursuant to the two-year partnership, Coldhaus in conjunction with Valens will be responsible for store level representation, brand advocacy, distribution route coverage and retail staff education to drive brand visibility and commercial retail presence. Furthermore, leveraging Coldhaus’ direct-to-store management infrastructure we believe will significantly increase the frequency, reach and touchpoints of our brands as we continue to penetrate key retail relationships. The dedicated field team to be put in place through this partnership will allow Valens to connect with and educate retail staff in respect to our brands and product attributes providing a unique opportunity to help drive consistent in-store category strategy while supporting retailers as they focus on enriching consumer experience.
Tyler Robson, Chief Executive Officer of The Valens Company, said, “We are very happy to announce today’s partnership with Coldhaus a leading distributor with proven success in building large iconic brands in the beverage industry through robust distribution. Having a major partner like Coldhaus we believe will help accelerate our growth in key markets and create long-term meaningful relationships with retailers and consumers throughout the distribution territory as we increase visibility of our branded cannabis products. This partnership is a positive step forward for our revenue growth objectives with little to no additional overhead as we are able utilize the expert sales and logistics teams at Coldhaus that will serve as an extension to the Valens team. We are thrilled to partner with Coldhaus to expand our reach into the retail ecosystem, as they truly understand the relationship between brand owners and retailers.”
David Millen, Chief Executive Officer of Coldhaus Distribution, said, “The cannabis market is an important emerging category, and we have maintained our independence as a private distributor positioned to lead and seize generation-defining opportunities exactly like this one. Today marks our first foray into the cannabis category, we are proud to select Valens as our exclusive partner to help bring their leading portfolio of products to market given their manufacturing capabilities and product innovation. Coldhaus has a heritage of building large brands through robust distribution, and this partnership marks a defining moment as consumer preferences and behaviours with cannabis are beginning to take shape. We believe this is an opportunity to help build and distribute Valens into a house of leading cannabis CPG brands.”
At Valens, it’s Personal.
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 in 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.
About Coldhaus Distribution Inc.
Coldhaus Distribution is a leading tier one National Consumer Packaged Good distributor and fulfillment company that delivers best in class results on its brand building capabilities. The Company prides itself on its suite of services which range from fulfillment, full service national distribution, forecasting, analytics and reporting, financial services, and national account management. Coldhaus Distribution works to execute their partners brand strategy and drives performance throughout the Canadian marketplace. The Company continues to grow its brand portfolio and leverage its extensive experience to continuously improve, learn, and educate consumers, retailers, and the brands they work with.
For further information, please contact:
Jeff Fallows
The Valens Company
Investor Relations
ir@thevalenscompany.com
1.647.956.8254
KCSA Strategic Communications
Phil Carlson
VLNS@kcsa.com
1.212.896.1233
Media
KCSA Strategic Communications
Anne Donohoe
adonohoe@kcsa.com
1 212.896.1265
Notice regarding Forward Looking Statements
All information included in this press release, including any information as to the future financial or operating performance and other statements of The Valens Company that express management’s expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing information about management’s current expectations and plans relating to the future. Wherever possible, words such as “plans”, “expects”, “scheduled”, “trends”, “forecasts”, “future”, “indications”, “potential”, “estimates”, “predicts”, “anticipate”, “to establish”, “believe”, “intend”, “ability to”, or statements that certain actions, events or results “may”, “should”, “could”, “would”, “might”, “will”, or are "likely" to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information. Specific forward-looking statements include, without limitation, statements regarding the ability to regain compliance with the Nasdaq Listing Rules, and anticipated courses of action.
The risks and uncertainties that may affect forward-looking statements include, among others, the inability to meet the Minimum Bid Requirement or comply with Nasdaq’s other listing standards within the prescribed time period, which could result in the delisting of the common shares, Canadian regulatory risk, Australian regulatory risk, U.S. regulatory risk, U.S. border crossing and travel bans, the uncertainties, effects of and responses to the COVID-19 pandemic, reliance on licenses, expansion of facilities, competition, dependence on supply of cannabis and reliance on other key inputs, dependence on senior management and key personnel, general business risk and liability, regulation of the cannabis industry, change in laws, regulations and guidelines, compliance with laws, limited operating history, vulnerability to rising energy costs, unfavourable publicity or consumer perception, product liability, risks related to intellectual property, product recalls, difficulties with forecasts, management of growth and litigation, many of which are beyond the control of The Valens Company. For a more comprehensive discussion of the risks faced by The Valens Company, and which may cause the actual financial results, performance or achievements of The Valens Company to be materially different from estimated future results, performance or achievements expressed or implied by forward-looking information or forward-looking statements, please refer to The Valens Company’s latest Annual Information Form filed with Canadian securities regulatory authorities at www.sedar.com or on The Valens Company’s website at www.thevalenscompany.com. The risks described in such Annual Information Form are hereby incorporated by reference herein. Although the forward-looking statements contained herein reflect management's current beliefs and reasonable assumptions based upon information available to management as of the date hereof, The Valens Company cannot be certain that actual results will be consistent with such forward-looking information. The Valens Company cautions you not to place undue reliance upon any such forward-looking statements. The Valens Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Nothing herein should be construed as either an offer to sell or a solicitation to buy or sell securities of The Valens Company.
FUNMAN
2 years ago
The Valens Company Secures Agreement for Green Roads Kiosks in Major Malls Across the United States
News Provided by PR Newswire
2022-04-21
Green Roads' world-class wellness products will be made available in cutting-edge smart kiosks across premium mall locations around the U.S.
KELOWNA, BC, April 21, 2022 /PRNewswire/ - The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) (the "Company" "The Valens Company" or "Valens"), a leading manufacturer of cannabis products is pleased to announce that its wholly-owned subsidiary Green Roads, Inc., has entered into an agreement with Signifi Solutions, Inc. to place cloud managed Green Roads smart kiosks in various premium mall locations around the U.S.
Green Roads and Signifi Solutions, Inc. have agreed to partner to initially install the smart kiosks in dozens of premium mall locations in bustling retail markets in the U.S., including New York, Florida, Arizona, Texas, and Colorado, among others. The agreement also includes the potential for an additional 60 mall locations in 2022. The first kiosk is expected to go live in June 2022 and is expected to include a full assortment of Green Roads products aimed at helping consumers with common health and wellness challenges such as stress, sleep, muscle and joint pain, relaxation, and focus.
"This partnership gives Green Roads access to some of the largest mall locations in the U.S., thereby increasing overall brand awareness and opening a new revenue opportunity given the premium mall high foot traffic. This opportunity combines world-class wellness products produced by Green Roads with cutting-edge smart kiosk technology developed by Signifi Solutions and premium mall locations" said Tyler Robson, Chief Executive Officer, and Chair of The Valens Company. "We intend to offer a full array of Green Roads products in smart kiosks and using technology that we expect to be able to gather and understand both sales data and customer demographics on a real-time basis."
"We couldn't be more pleased to have Valens and Green Roads as our clients," said Shamira Jaffer, CEO of Signifi Solutions, Inc. "We selected Green Roads after careful review of their product breadth, quality reputation, and organizational commitment to compliance and excellence. Signifi will provide smart Kiosk technology, with built-in digital screens that can be changed in real-time to align with demographic and sales data. Our technology delivers consumers an elevated, convenient experience including a secure platform to purchase Green Roads products. Through the smart kiosks, Green Roads will receive a robust real time data that will allow them to optimize the performance of each individual kiosk."
"To our knowledge, no other CBD company has combined this level of technology with the sale of its products," Mr. Robson added.
"This is the first of several initiatives that Valens and Green Roads are taking to expand distribution channels in the U.S. and abroad" said Jeff Fallows, President of The Valens Company. "This opportunity with Signifi Solutions is the perfect platform to drive discovery, trial, and frequency of purchase from the premium consumer base of malls."
At Valens, it's Personal.
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.
About Green Roads:
Green Roads, a subsidiary of The Valens Company (TSX: VLNS) (NASDAQ: VLNS), is an award-winning company that produces high-quality wellness products including those with hemp-derived CBD and other beneficial cannabinoids. Green Roads is on a mission to help every person find the healthiest version of themselves through the power of plants, whether it be through premium CBD products or those with functional mushroom ingredients.
Green Roads is unique in that it is one of a very small number of CBD brands to produce their own products in their own cGMP and FDA-registered facility. Green Roads products are sold in over 7,000 retail locations and online at GreenRoads.com.
About Signifi:
Signifi Solutions is a global innovator delivering end-to-end solutions in I.T. Asset Management, Loss Prevention and Automated Retail. Signifi's modular hardware and VISION platform are developed and engineered in-house to deliver custom solutions that enable new sources of revenue, brand visibility, customer engagement, and operating cost reductions. Steeped in continuous innovation and marketplace collaboration, Signifi brings the most cutting-edge self-serve and automated customer experiences in the market today.
Notice regarding Forward Looking Statements
All information included in this press release, including any information as to the future financial or operating performance and other statements of The Valens Company that express management's expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing information about management's current expectations and plans relating to the future and include statements regarding stabilization of inventory investment, impacts to our cost structure and anticipated positive EBITDA for future periods. Wherever possible, words such as "plans", "expects", "scheduled", "trends", "forecasts", "future", "indications", "potential", "estimates", "predicts", "anticipate", "to establish", "believe", "intend", "ability to", or statements that certain actions, events or results "may", "should", "could", "would", "might", "will", or are "likely" to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information. Specific forward-looking statements include, without limitation, all disclosure regarding future results of operations, future outcomes of transactions, economic conditions, and anticipated courses of action. Investors and other parties are advised that there is not necessarily any correlation between the number of SKUs manufactured and shipped and revenue and profit, and undue reliance should not be placed on such information.
The risks and uncertainties that may affect forward-looking statements include, among others, Canadian regulatory risk, Australian regulatory risk, U.S. regulatory risk, U.S. border crossing and travel bans, the uncertainties, effects of and responses to the COVID-19 pandemic, reliance on licenses, expansion of facilities, competition, dependence on supply of cannabis and reliance on other key inputs, dependence on senior management and key personnel, general business risk and liability, regulation of the cannabis industry, change in laws, regulations and guidelines, compliance with laws, limited operating history, vulnerability to rising energy costs, unfavourable publicity or consumer perception, product liability, risks related to intellectual property, product recalls, difficulties with forecasts, management of growth and litigation, many of which are beyond the control of The Valens Company. For a more comprehensive discussion of the risks faced by The Valens Company, and which may cause the actual financial results, performance or achievements of The Valens Company to be materially different from estimated future results, performance or achievements expressed or implied by forward-looking information or forward-looking statements, please refer to The Valens Company's latest Annual Information Form filed with Canadian securities regulatory authorities at www.sedar.com or on The Valens Company's website at www.thevalenscompany.com and its Annual Report on Form 40-F for the year ended November 30, 2021 filed with the SEC at www.sec.gov. The risks described in such Annual Information Form and Annual Report on Form 40-F are hereby incorporated by reference herein. Although the forward-looking statements contained herein reflect management's current beliefs and reasonable assumptions based upon information available to management as of the date hereof, The Valens Company cannot be certain that actual results will be consistent with such forward-looking information. The Valens Company cautions you not to place undue reliance upon any such forward-looking statements. The Valens Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Nothing herein should be construed as either an offer to sell or a solicitation to buy or sell securities of The Valens Company.
GE_Jim
2 years ago
The Valens Company Reports First Quarter Fiscal 2022 Financial Results
Apr. 13, 2022 5:00 PM ETThe Valens Company Inc. (VLNS)
Net revenue grew 26.1% quarter over quarter to $23.2 million from $18.4 million in Q4 2021. Net revenue was primarily driven by provincial sales which increased by 36.7% in Q1 2022 as compared to Q4 2021
Q1 2022 demonstrates Valens' underlying business has passed an inflection point
Became a top 10 licensed producer in Canada, with a 3.1% market share as of February 2022
B2C revenue lines of provincial sales and Green Roads accounted for 68.5% of net revenue in Q1 2022
Valens reiterates its objective of achieving positive adjusted EBITDA by Q4 2022
KELOWNA, BC, April 13, 2022 /PRNewswire/ - The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) (the "Company", "The Valens Company" or "Valens"), a leading manufacturer of cannabis products, is pleased to report its first quarter fiscal year 2022 financial results for the period ended February 28, 2022.
https://mma.prnewswire.com/media/1796743/The_Valens_Company_Inc__The_Valens_Company_Reports_First_Quarter.jpg
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."
First Quarter Fiscal 2022 Highlights:
Net revenue increased 26.1% to $23.2 million in Q1 2022 from $18.4 million in Q4 2021, benefiting from strong Canadian operations, which represented 73.7%of total sales in the first quarter
Provincial sales increased by 36.7% to $10.8 million in Q1 2022 from $7.9 million in Q4 2021. The increase was driven by the consolidation of the first full quarter results of Citizen Stash as well as Valens' newly launched branded products, which represented the majority of sales
Green Roads revenue declined 10.5% quarter-over-quarter to $5.1 million in Q1 2022 from $5.7 million in Q4 2021, primarily due to seasonal trends, with December historically being the slowest month of the year
B2B increased 53.7% in Q1 2022 to $6.3 million from $4.1 million in Q4 2021. The increase was primarily driven by the addition and onboarding of new customers as well as monetizing higher priced inventory
Other revenue sources include Valens Labs, Pommies and International Revenue which increased 42.9% in Q1 2022 to $1.0 million from $0.7 million in Q4 2021. The increase was driven primarily by higher international revenue
The following table of financial highlights is presented in Canadian dollars, except for percentages
Three months ended
February 28, 2022
(in $MM)
Three months ended
November 30, 2021
(in $MM)
Percentage
Change from the
prior quarter
Net Revenue
$23.2
$18.4
+26.1%
Provincial Sales
$10.8
$7.9
+36.7%
Green Roads
$5.1
$5.7
-10.5%
B2B
$6.3
$4.1
+53.7%
Other
$1.0
$0.7
+42.9%
Valens became a top 10 licensed producer by market share in Canada:
Ranked #10, with a 3.1% overall market share in February 2022, compared to 2.4% in November 2021 in Alberta, British Columbia, Ontario and Saskatchewan based on Hifyre data
Ranked #9, with 3.3% edible market share in February 2022, compared to 2.7% in November 2021 in Alberta, British Columbia, Ontario and Saskatchewan based on Hifyre data
Ranked #4, with 11.1% cannabis-infused beverage market share in February 2022, compared to 9.3% in November 2021 in Alberta, British Columbia, Ontario and Saskatchewan based on Hifyre data
Ranked #9, with 3.5% flower market share in February 2022, compared to 2.5% in November 2021 in Alberta, British Columbia, Ontario and Saskatchewan based on Hifyre data
BC God Bud #1 best-selling SKU across all product categories in Alberta, British Columbia, Ontario and Saskatchewan during the first two months of 2022 as per Hifyre data
Operational Cost Efficiencies
Valens has made significant progress with approximately $9.5 million of the first $10 million in annual cost efficiencies now actioned. The Company expects to realize these benefits towards the end of the second fiscal quarter of 2022, after accounting for one-time costs, with the majority expected to be realized in the second half of fiscal 2022.
Of the $9.5 million actioned, approximately 67%, or $6.4 million, of the cost savings are coming through SG&A, of which almost half were driven from synergies of acquisitions, while the remaining were related to organizational realignment at Valens. This is expected to positively impact SG&A in future quarters, after accounting for one-time costs. Approximately 33%, or $3.1 million, was driven by operational efficiencies including automation, process standardization and supplier optimization which is expected to positively impact margins in the second half of the year. Valens remains on track to achieve a total of $20 million in annualized cost savings run rate by the end of fiscal fourth quarter of 2022.
First Quarter Fiscal 2022 Corporate and Operational Highlights:
Commenced trading on the Nasdaq Capital Market, positioning Valens and its shareholders for greater access to liquidity, increased corporate visibility, and a broader shareholder base in 2022 and beyond.
Enhanced adult recreational market portfolio with the launch of two new brands, Versus and Contraband, designed to meet the needs of target consumers in the value and premium markets respectively. The Versus launch follows Valens' acquisition of Verse Cannabis in September 2021 and the subsequent repositioning of the value brand to better align with its consumer base. The Contraband launch follows the acquisition of Citizen Stash and leverages its catalogue of premium genetics, expanding its reach to the evolving consumer base in the fast growing, premium market segment.
Signed the first beverage manufacturing partnership agreement since the launch of the Pommies facility and successfully completed first shipments of cannabis-infused beverages to Ontario, British Columbia, Alberta Manitoba and Yukon.
Accelerated Valens' international expansion strategy by entering into two strategic agreements with PMI Mexico, a subsidiary of Merger Group, and one of the main drug suppliers of the Mexican government. Under the terms of the agreement, Valens will manufacture CBD-infused and uninfused Predilife probiotic products for PMI globally.
Subsequent to quarter-end, Valens closed its previously announced CAD$32.3 bought deal public offering (the "Offering") of units of the Company. The Company intends to use the net proceeds from the Offering to continue to pursue strategic growth initiatives in North America, providing funding for working capital and for general corporate purposes.
Financial Summary
Net revenue of $23.2 million in Q1 2022, representing an increase of 26.1% over Q4 2021.
Valens had cash and marketable securities of $20.2 million at the end of Q1 2022 and subsequent to quarter end raised $32.3 million in gross proceeds.
Adjusted gross profit(1) was $3.4 million, or 14.6% of net revenue in Q1 2022, compared to $6.3 million, or 34.1% of net revenue, in Q4 2021.
The decline in adjusted gross profit was attributable to a change in sales mix that included a lower sales contribution from our higher margin Green Roads business and an increased sales contribution from our lower margin B2B relationships. In addition, adjusted gross profit was negatively impacted by the monetization of higher priced inventory through our B2B channel to better align our inventory with future requirements as well as higher transportation and raw materials costs stemming from ongoing supply chain challenges.
Adjusted EBITDA(2) was $(17.6) million, in Q1 2022 compared to $(13.3) million in Q4 2021.
The reduction in adjusted EBITDA was primarily due to lower adjusted gross margins and an increase in SG&A associated with the consolidation of the first full quarter of Citizen Stash. Subsequent to quarter end, Valens announced the restructuring to Citizen Stash, which is expected to positively impact adjusted EBITDA in future quarters, after the realization of one-time costs.
The reduction in adjusted EBITDA was also attributable to higher marketing and advertising costs related to the launch of Versus and Contraband in Canada as well as Green Roads "Own the Day" brand campaign and its associated portfolio realignment.
The following table of financial highlights is presented in thousands of Canadian dollars, except for percentages, per share figures and Canadian recreational market share.
Three months ended
February 28, 2022;
Three months ended
November 30, 2021;
Q1 2022
Q4 2021
Gross Revenue
$29,867
$23,342
Net Revenue
$23,180
$18,407
Gross Profit
1,961
2,705
Gross Profit Margin
8.5%
14.7%
Adjusted Gross Profit (1)
$3,375
$6,272
Adjusted Gross Profit Margin % (1)
14.6%
34.1%
Adjusted EBITDA (2)
$(17,646)
$(13,347)
Adjusted EBITDA % (2)
N/A
N/A
Net Income (Loss)
$(25,748)
$(21,423)
Basic/Diluted Income (Loss) Per Share
$(0.38)
$(0.34)
Cash & Marketable Securities
$20,208
19,125
Canadian Recreational Market Share
3.1%
2.4%
Management utilizes this measure to provide a representation of performance in the period by excluding the inventory impairment measurement adjustments and impacts of biological asset changes as required by IFRS. Adjusted gross profit is a non-GAAP ratio, which management believes provides useful information as it represents gross profit for management purposes based on costs to manufacture, package and ship inventory sold, exclusive of any impairments due to changes in internal or external influences impacting the net realizable value of inventory and non-cash items. See reconciliation of "Adjusted Gross Profit (non-GAAP measure)" in the Company's Management's Discussion and Analysis for the quarter ended February 28, 2022.
The Company has identified adjusted EBITDA as a relevant industry performance indicator. Adjusted EBITDA is a non-GAAP financial measure used by management that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management defines adjusted EBITDA as loss for the period, as reported, adjusted for financing costs (net), recovery of income taxes, depreciation and amortization, share-based payments, fair value and realized biological assets changes, foreign exchange gains, inventory valuation allowance, remeasurement of contingent consideration, restructuring charges, gains and losses on disposal of capital assets, gains and losses on marketable securities and derivatives, and non-recurring and transaction costs. Management believes this measure provides useful information as it is a commonly used measure in the capital markets to approximate operating earnings. See reconciliation of "Adjusted EBITDA (non-GAAP measure)" in the Company's Management's Discussion and Analysis for the three months ended February 28, 2022.
Outlook
Key Performance Indicators and Revenue Guidance:
Key Objectives for 2022:
Grow adult recreational market share in Canada by seeking to become a top 5 Player in vapes, edibles and beverages and a top 10 player in flower products.
Unlock our potential in the U.S. and international markets through the Green Roads platform acquired in April 2021.
Seek to achieve positive adjusted EBITDA by Q4 by improving the gross margin and SG&A profile of the business through our Integration Initiatives which are based on a combination of cost efficiencies, realization of M&A synergies and greater levels of automation and process standardization.
Reduce cash burn through improvements in adjusted EBITDA, working capital management and monetization of non-core assets.
Development of the Company's U.S. THC strategy as permissible under federal regulations.
Revenue & EBITDA Guidance 2023:
Minimum revenue of CAD$225 million
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."
This press release is intended to be read in conjunction with the Management's Discussion and Analysis ("MD&A") for the period and the accompanying Financial Statements and notes, available under the Company's profile on SEDAR at www.sedar.com and the Company's Form 6-K, which will be furnished on EDGAR (www.sec.gov/edgar.shtml).
Q1 2022 Conference Call Details
The Company will host a conference call tomorrow, Thursday, April 14, 2022, at 11:00 AM Eastern Time / 8:00 AM Pacific Time to discuss the financial results and business outlook.
Participant Dial-in Numbers:
Toll-Free: 1-877-407-0792
Toll / International: 1-201-689-8263
*Participants should request The Valens Company Earnings Call or provide confirmation code 13728569.
The call will be available via webcast on the Valens investor page of the Company website at https://thevalenscompany.com/investors/ or at this link. Please visit the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. A replay of the call will be available on the Valens investor page approximately two hours after the conference call has ended.
Tyler Robson, Chief Executive Officer, Sunil Gandhi, Chief Financial Officer, Jeffrey Fallows, President, and Everett Knight, Executive Vice President of Corporate Development and Capital Markets, will be conducting a question-and-answer session following the prepared remarks.
At Valens, it's Personal.
FUNMAN
2 years ago
Let's hope tomorrow's news is better than the dilution news--->>>THE VALENS COMPANY TO HOLD CONFERENCE CALL TO DISCUSS FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2022
Kelowna, B.C., April 7, 2022 – The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) (the “Company” “The Valens Company” or “Valens”), a leading manufacturer of cannabis products, is pleased to announce it will issue its first quarter 2022 financial results for the period ended February 28, 2022, on Wednesday, April 13, 2022, after market close.
CONFERENCE CALL DETAILS
The Company will host a conference call the following day, Thursday, April 14, 2022, at 11:00 AM Eastern Time / 8:00 AM Pacific Time to discuss the financial results and business outlook.
Participant Dial-In Numbers:
Toll-Free: 1-877-407-0792
Toll / International: 1-201-689-8263
*Participants should request The Valens Company Earnings Call or provide confirmation code 13728569.
The call will be available via webcast on the Valens investor page of the Company website at https://thevalenscompany.com/investors/ or at this link. Please visit the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. A replay of the call will be available on the Valens investor page approximately two hours after the conference call has ended.
Tyler Robson, Chief Executive Officer, Sunil Gandhi, Chief Financial Officer, Jeffrey Fallows, President, and Everett Knight, Executive Vice President of Corporate Development and Capital Markets, will be conducting a question-and-answer session following the prepared remarks.
ABOUT THE VALENS COMPANY
The Valens Company is a global leader in the end-to-end development and manufacturing of innovative, cannabinoid-based products. The Valens Company is focused on being the partner of choice for leading Canadian and international cannabis brands by providing best-in-class, proprietary services including CO2, ethanol, hydrocarbon, solvent-less and terpene extraction, analytical testing, formulation and product development and custom manufacturing. Valens is the largest third-party extraction company in Canada with an annual capacity of 425,000 kg of dried cannabis and hemp biomass at our purpose-built facility in Kelowna, British Columbia which is in the process of becoming European Union (EU) Good Manufacturing Practices (GMP) compliant. The Valens Company currently offers a wide range of product formats, including tinctures, two-piece caps, soft gels, oral sprays and vape pens as well as beverages, concentrates, topicals, edibles, injectables, natural health products and has a strong pipeline of next-generation products in development for future release. Finally, The Valens Company’s wholly-owned subsidiary Valens Labs is a Health Canada licensed ISO 17025 accredited cannabis testing lab providing sector-leading analytical services and has partnered with Thermo Fisher Scientific to develop a Centre of Excellence in Plant-Based Science. For more information, please visit https://thevalenscompany.com. The Valens Company’s investor deck can be found specifically at https://thevalenscompany.com/investors/.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Jeff Fallows
The Valens Company
Investor Relations
ir@thevalenscompany.com
1 647.956.8254
KCSA Strategic Communications
Phil Carlson / Elizabeth Barker
VLNS@kcsa.com
1 212.896.1233 / 1 212.896.1203
Media
KCSA Strategic Communications
Anne Donohoe
adonohoe@kcsa.com
1 212.896.1265
NOTICE REGARDING FORWARD LOOKING STATEMENTS
All information included in this press release, including any information as to the future financial or operating performance and other statements of The Valens Company that express management’s expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing information about management’s current expectations and plans relating to the future. Wherever possible, words such as “plans”, “expects”, “scheduled”, “trends”, “indications”, “potential”, “estimates”, “predicts”, “anticipate”, “to establish”, “believe”, “intend”, “ability to”, or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, or are “likely” to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information. Specific forward-looking statements include, without limitation, all disclosure regarding future results of operations, economic conditions and anticipated courses of action.
The risks and uncertainties that may affect forward-looking statements include, among others, regulatory risk, United States border crossing and travel bans, reliance on licenses, expansion of facilities, competition, dependence on supply of cannabis and reliance on other key inputs, dependence on senior management and key personnel, general business risk and liability, regulation of the cannabis industry, change in laws, regulations and guidelines, compliance with laws, reliance on a single facility, limited operating history, vulnerability to rising energy costs, unfavourable publicity or consumer perception, product liability, risks related to intellectual property, product recalls, difficulties with forecasts, management of growth and litigation, many of which are beyond the control of The Valens Company. For a more comprehensive discussion of the risks faced by The Valens Company, and which may cause the actual financial results, performance or achievements of The Valens Company to be materially different from estimated future results, performance or achievements expressed or implied by forward-looking information or forward-looking statements, please refer to The Valens Company’s latest Annual Information Form filed with Canadian securities regulatory authorities at www.sedar.com or on The Valens Company’s website at www.thevalenscompany.com. The risks described in such Annual Information Form are hereby incorporated by reference herein. Although the forward-looking statements contained herein reflect management’s current beliefs and reasonable assumptions based upon information available to management as of the date hereof, The Valens Company cannot be certain that actual results will be consistent with such forward-looking information. The Valens Company cautions you not to place undue reliance upon any such forward-looking statements. The Valens Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Nothing herein should be construed as either an offer to sell or a solicitation to buy or sell securities of The Valens Company.
FUNMAN
2 years ago
Cannabis 2022: Why Brands Really Do Matter
"Each brand has to have a story and a purpose that is very easy to understand; almost in one glance"
Tyler Robson, CEO, co-founder, chair, The Valens Company
By The Valens Company
Feb 18, 2022
In the early days of legal cannabis, industry wisdom had it that brands didn’t matter. Consumers were focused on price, as they had been before legalization. Early products didn’t deliver a consistent experience that consumers could reliably go back for, and strict regulations around marketing made brand-building all but impossible.
Why, then, is Kelowna-based The Valens Company, the largest manufacturing company in the cannabis space in Canada, suddenly launching new brands?
We talked to company CEO, co-founder and chair Tyler Robson and Chief Commercial Officer Adam Shea to find out why brands matter more now than ever before in today’s cannabis industry.
Adam Shea, chief commercial officer, The Valens Company
You recently launched new cannabis brands into the Canadian marketplace. How did this shift from B2B to B2C happen?
Robson: Valens has been focused on being the top extraction and co-manufacturing partner in the industry, catering to the biggest, most progressive, and highest quality brands in the Cannabis 2.0 space (extract-based products).
Now, we are at the beginning of a very intentional, strategic multi-step plan to grow the Valens brands into one of the top portfolios within the adult recreation market. We’ve been a trusted partner of other licensed producers for years and that will continue. But we’re broadening what we’re doing and that includes building a house of brands.
Why is this transition important to Valens now?
Robson: One reason is that occupying two parts of the value chain (co-manufacturing and retail) allows us to capture bigger margins and show off our innovations to lead market share growth and greater returns for shareholders than if we remained a dedicated co-manufacturer and extraction specialist. It’s also a natural progression for our company given our deep expertise and investments in manufacturing and product development.
With the launch of our new brands, Valens is going to be extraordinarily disruptive this year and onward when it comes to the brand portfolio, in Canada, the U.S. and globally.
Can you talk about the brands you just launched?
Shea: We’re really looking forward to what’s coming up this year. Valens’ brand house now consists of four big brands in Canada. First is Versus, a value brand that is going to be a challenger to what I would call “lazy brands” that are comfortable offering value on price. Versus has a full spectrum of products, from pre-rolls to flower to vape to a great new line of beverages available now in Ontario. It’s very high-quality, offers a consistent experience and is at an accessible price point.
Robson: We also acquired Citizen Stash, a premium flower brand known to a lot of cannabis users in Canada, and launched Contraband, for a real premium experience. Cannabis and urban music and culture have always been closely intertwined. I am a huge fan of that culture, and we wanted to pay homage to the long legacy left by the original cannabis cultivators and disruptors who created the conditions that led to today’s legal market. That is the origin and brand identity of Contraband – a product that was once illegal is now legal and still a catalyst for great music, art and fashion.
What about the edibles market?
Shea: Our fourth consumer brand is Vacay, focused solely on edibles, which is an area of huge potential. We are preparing a slew of new products to take our Vacay edibles to new levels of performance, so you’ll be hearing more about that soon.
These are Canadian launches; what about the U.S. and global markets?
Robson: We are fortunate to have one of the best global CBD brands with Green Roads, which recently underwent a rebranding and launch of the “Own the Day” campaign, simplifying its position as a portfolio of products aimed at helping people achieve their personal health and wellness objectives. Green Roads has a strong retail presence in legalized states like Florida and has a really robust e-commerce platform.
How important is brand differentiation?
Shea: Differentiation is critical in cannabis, because of how many brands there are and how restricted we are in telling brand stories due to regulations in Canada. Each brand has to have a story and a purpose that is very easy to understand—almost in one glance at the pack. Differentiation is also important now that so much purchasing happens online. In that case, consumers are doing their own research and don’t have a budtender to guide them.
So, it sounds like brands matter.
Robson: Every product category has a different level of brand affinity depending on what consumers are buying. But there’s no question that brands now play a very important role in cannabis. Consumers have become more discerning, especially if they are using cannabis for health reasons like pain control or sleep. They want a consistent experience every time they use a product. In creating consistent quality products, as we do, we build trust. Consumers know they will have the same experience every time. That is invaluable. The companies that are going to succeed are those that build identities that resonate with consumers while fulfilling their needs.
FUNMAN
2 years ago
The Valens Company to Hold Conference Call to Discuss Financial Results for the Fourth Quarter and Fiscal Year 2021
Kelowna, B.C., February 17, 2022 – The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) (the “Company” “The Valens Company” or “Valens”), a leading manufacturer of cannabis products, is pleased to announce it will issue its fourth quarter and fiscal year 2021 financial results for the period ended November 30, 2021, on Monday, February 28, 2022, after market close.
CONFERENCE CALL DETAILS
The Company will host a conference call the following day, Tuesday, March 1, 2022 at 11:00 am Eastern Time / 8:00 am Pacific Time to discuss the financial results and business outlook.
Participant Dial-In Numbers:
Toll-Free: 1-877-407-0792
Toll / International: 1-201-689-8263
*Participants should request The Valens Company Earnings Call or provide confirmation code 13727202.
The call will be available via webcast on the Valens investor page of the Company website at https://thevalenscompany.com/investors/ or at this link. Please visit the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. A replay of the call will be available on the Valens investor page approximately two hours after the conference call has ended.
Tyler Robson, Chief Executive Officer, Sunil Gandhi, Chief Financial Officer, Jeffrey Fallows, President, and Everett Knight, Executive Vice President of Corporate Development and Capital Markets, will be conducting a question-and-answer session following the prepared remarks.
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.
For further information, please contact:
Jeff Fallows
The Valens Company
Investor Relations
ir@thevalenscompany.com
1.647.956.8254
KCSA Strategic Communications
Phil Carlson
VLNS@kcsa.com
1.212.896.1233
Media
KCSA Strategic Communications
Anne Donohoe
adonohoe@kcsa.com
1 212.896.1265
Notice regarding Forward Looking Statements
All information included in this press release, including any information as to the future financial or operating performance and other statements of The Valens Company that express management’s expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing information about management’s current expectations and plans relating to the future. Wherever possible, words such as “plans”, “expects”, “scheduled”, “trends”, “forecasts”, “future”, “indications”, “potential”, “estimates”, “predicts”, “anticipate”, “to establish”, “believe”, “intend”, “ability to”, or statements that certain actions, events or results “may”, “should”, “could”, “would”, “might”, “will”, or are "likely" to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information. Specific forward-looking statements include, without limitation, all disclosure regarding future results of operations, future outcomes of transactions, economic conditions, and anticipated courses of action. Investors and other parties are advised that there is not necessarily any correlation between the number of SKUs manufactured and shipped and revenue and profit, and undue reliance should not be placed on such information.
The risks and uncertainties that may affect forward-looking statements include, among others, Canadian regulatory risk, Australian regulatory risk, U.S. regulatory risk, U.S. border crossing and travel bans, the uncertainties, effects of and responses to the COVID-19 pandemic, reliance on licenses, expansion of facilities, competition, dependence on supply of cannabis and reliance on other key inputs, dependence on senior management and key personnel, general business risk and liability, regulation of the cannabis industry, change in laws, regulations and guidelines, compliance with laws, limited operating history, vulnerability to rising energy costs, unfavourable publicity or consumer perception, product liability, risks related to intellectual property, product recalls, difficulties with forecasts, management of growth and litigation, many of which are beyond the control of The Valens Company. For a more comprehensive discussion of the risks faced by The Valens Company, and which may cause the actual financial results, performance or achievements of The Valens Company to be materially different from estimated future results, performance or achievements expressed or implied by forward-looking information or forward-looking statements, please refer to The Valens Company’s latest Annual Information Form filed with Canadian securities regulatory authorities at www.sedar.com or on The Valens Company’s website at www.thevalenscompany.com. The risks described in such Annual Information Form are hereby incorporated by reference herein. Although the forward-looking statements contained herein reflect management's current beliefs and reasonable assumptions based upon information available to management as of the date hereof, The Valens Company cannot be certain that actual results will be consistent with such forward-looking information. The Valens Company cautions you not to place undue reliance upon any such forward-looking statements. The Valens Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Nothing herein should be construed as either an offer to sell or a solicitation to buy or sell securities of The Valens Company.
FUNMAN
2 years ago
McConnell already called this out and basically said over my dead body when the bill showed up last week.
But if it happens, it's a big step in the right direction for Valens.
Believe it when it happens. Perlmutter"s strategy is to make it a poison pill for republicans. --->>> House Marijuana Banking Bill Sponsor Is ‘Confident’ It Will Advance Through Senate Despite Obstacles
Watch the video here:
“Eight years of my 16 year career I’ve been working on this, since Colorado legalized marijuana back in 2012-2013,” @RepPerlmutter says about the Safe Banking Act. “I am confident that the Senate will take it up.” More: pic.twitter.com/CCeRHzFgcm— Yahoo Finance (@YahooFinance) February 11, 2022
Published 3 days ago on February 11, 2022By Kyle Jaeger
https://www.marijuanamoment.net/house-marijuana-banking-bill-sponsor-is-confident-it-will-advance-through-senate-despite-obstacles/
The fight continues to get the Senate to pass a marijuana banking reform bill, and the measure’s House sponsor says he’s “confident” that the opposite chamber will finally take it up.
Rep. Ed Perlmutter (D-CO) has been trying to get the Secure and Fair Enforcement (SAFE) Banking Act across the finish line for several years now, and his latest attempt is to pass it as part of a large-scale manufacturing and innovation bill to which the cannabis language was recently attached in the House.
In an interview with Yahoo Finance on Friday, the congressman discussed the prospects of his proposal, which has cleared the House six times in some form now. He said that while Senate leadership has insisted on passing comprehensive legalization first, he still sees opportunities to advance his bipartisan incremental reform.
“Every [House] Democrat and at least half the Republicans have supported SAFE Banking, and I am confident that the Senate will take it up,” he said. He recognized that Senate Majority Leader Chuck Schumer (D-NY) and colleagues are prioritizing broad legalization legislation that they plan to formally file in April, but he said that he’s “questioned whether they have the votes to get something of that magnitude through the Senate, which has not even had a hearing really on marijuana in 50 plus years.”
“We’re going to keep working with the Senate, working with Schumer’s office, working with [Sen. Cory Booker’s (D-NJ)] office working with [Sen. Steve Daines (R-MT)], a Republican who is championing this bill in the Senate, and we’re going to get it across the finish line,” Perlmutter said. “I am really pretty confident about it, whether it’s with the [the America COMPETES Act] or something else, we’re going to get it done.”
The congressman, who is retiring at the end of the session and has committed himself to getting SAFE Banking enacted before then, also talked about the political dynamics that have prevented his reform bill from moving through the Senate.
Under prior GOP control, it stalled because a key Republican committee chairman felt it was too broad, he said. Under Democratic control, it’s yet to advance because leadership feels it’s too narrow.
He reiterated that he would be open to further amending the proposal to satisfy Schumer and his colleagues.
“They’re in support of it, but they just want to try to get some bigger pieces to it,” he said. “If they can add research, if they can add some criminal justice reform, if they can add some taxation components, I’m all for it. But we need to get something passed and on to the president this year.”
He made similar comments in response to a question from Marijuana Moment during a press briefing last week, when he also discussed possible consequences of expanding the reform proposal too much to the point where it loses some critical Republican support.
“Really, I’m pretty confident that it’s going to happen,” he said in the new interview. “I think this is the bill that’s going to break the ice, and then other things can be added or advocated for over the course of the next few months or years.”
Meanwhile, some Republicans are scratching their heads about how Democrats have so far failed to pass the modest banking reform with majorities in both chambers and control of the White House, too. For example, Rep. Rand Paul (R-KY) criticized his Democratic colleagues over the issue in December.
In the interim, federal financial regulator Rodney Hood—a board member and former chairman of the federal National Credit Union Administration (NCUA)—recently said that marijuana legalization is not a question of “if” but “when,” and he’s again offering advice on how to navigate the federal-state conflict that has left many banks reluctant to work with cannabis businesses.
FUNMAN
2 years ago
Paul A. Kunynetz – The Valens Company
https://www.vanguardlawmag.com/case-studies/paul-a-kunynetz-the-valens-company/?fbclid=IwAR25FguPpt7NNiwCEAGA11bVIITHTctTE85RzsxSqAMtL-NAbFjLAsSfUWE
Sorting out cannabis issues north and south of border
Written by: Neil CoteProduced by: Victor Martins & Gavin O’Connor
It was a calculated risk The Valens Company undertook this past summer, the Canadian manufacturer of cannabis products acquiring Florida-based Green Roads. As Paul A. Kunynetz explains, the acquisition positions the organization well. The Sunshine State’s population of around 22 million is more than half of Canada’s 38 million. The U.S. population being around 330 million, Florida could be the gateway.
Yet a host of variables may have to be overcome for the investment to pay dividends. While Canada legalized recreational use of marijuana in October 2018, it remains illegal under federal U.S. law, though states may set their own policies. The emerging Canadian cannabis industry also has an interesting makeup, Kunynetz explains, and that’s something many entrepreneurs and investors learned the hard way, especially in those early days.
“When legalization occurred, few investors held a strategic, long-term view of the market,” he tells Vanguard in November from Toronto. “Early investments in the industry without discipline and focus led to a plethora of capital-intensive initiatives that have yet to pay back. Furthermore, rapid growth without strong corporate governance practices has yielded numerous challenges and has hindered the industry as a whole.”
The market is consolidating with a strong few surviving. Valens should be among them, he says, with the company abiding by strategy that’s never had it rushing into all areas. But neither has it been overly cautious.
“We’re comfortable being uncomfortable,” Kunynetz says. “With evolving legislative frameworks, both national and provincial, successful companies have been acutely focused on balancing commercial needs and required risk-mitigation tactics.”
Southern exposure
Senior vice president, general counsel and corporate secretary since September 2019, Kunynetz helps Valens walk a fine line into unchartered territory. Green Roads being one of the largest U.S. producers of hemp-based CBD products that have no psychoactive effect, it would seem an appropriate fit among Valens’ Canadian health and wellness offerings of oils, edibles, and beverages. Kunynetz now must continue balancing commercial aspirations within an evolving, multijurisdictional framework.
While Florida is among 36 states allowing medical use of cannabis, its illegality at the federal level complicates Valens’ business and financing, even from major Canadian banks that typically have U.S. operations. Still, the U.S. market is a necessity for Valens’ growth, and Kunynetz’s compliance here is augmented by a Boston-based law firm, Foley Hoag, as well as their trusted legal advisors in Toronto, Stikeman Elliot LLP.
“Like the early days in Canada, there is high potential in the U.S. market,” he says. “Our experience in a rapidly legalizing market positions us well for continued, compliant growth. Key to success is figuring out a strategic way of entering the market that is compliant with both banking and securities regulations.”
Though Canada set what Kunynetz regards as the international example for recreational legalization through the federal Cannabis Act, he reminds it doesn’t give carte blanche. It makes it easier for Valens to secure financing for its Canadian operations, but the company can’t use it to expand U.S. holdings.
And though some of Canada’s best-known entertainers and hockey heroes use cannabis and CBD, celebrity endorsements are a no-no, though those who are brand owners are allowed some promotional leeway. While rapper Drake and actor Seth Rogen have taken advantage of that loophole by launching their own brands, Kunynetz says Valens has been doing just fine with no celebrity investors or endorsements.
In growth mode
Early on, Valens opted not to cultivate cannabis and has transitioned from an extraction company to custom manufacturer of cannabis products for licensed distributors. It’s partnered with other unlicensed industry participants, including brand houses. As is the case with liquor, the rules and regulations differ by province.
Ontario, for instance, is the sole wholesaler, buying from companies such as Valens and selling to private and provincial retailers. British Columbia has a mix of private retailers and provincial-owned stores, with Valens tapping both markets. Saskatchewan doesn’t get directly involved but takes a cut from what a producer sells to a licensed distributor or wholesaler.
Valens has since expanded its model by acquiring several strategically positioned brands, including Verse, Citizen Stash and the aforementioned Green Roads, and it will launch a couple more soon. For the 35-year-old Kunynetz, it’s more opportunity to contribute on the business and legal fronts, something he couldn’t do as much in previous roles.
A Western University business student, he initially envisioned being an investment banker but with the year he graduated, 2009, coinciding with the Great Recession, it wasn’t the best of times in the financial world. Law school seeming a good way to wait out the economic doldrums, he earned his law degree from the University of Windsor in 2012.
While honing his skills at McCarthy Tetrault he had a couple eventful secondments, first with Bell Canada and then with the Ontario Cannabis Store in the months before and after legalization. How that prepped him to be Valens’ first lawyer—and more—one year later.
“I was on the ground floor of the legislative process in Ontario and Canada, and after that secondment I became one of the go-to cannabis experts at McCarthy Tetrault,” he says. “Then the Valens opportunity came up and allowed me to utilize all my skills. I had missed that while practicing as just a lawyer. I also want to provide value on the business side of the operation.”
He’s built a legal department as Valens has expanded from a small startup operation to one that employs over 400 and is publicly listed on the TSX and Nasdaq. He’s helped seal deals for acquisitions and manufacturing agreements and was a nominee for the Tomorrow’s Leaders Award by the Canadian General Counsel Awards.
And the focus remains on tomorrow and its vagaries.
“Marketing and promotions are among the strictest areas,” he says. “It’s hard for a company that’s consumer facing to build a brand with so many tight restrictions to what can be on a package and how it can be promoted. It really tests the creativity of our business and the legal regime in which we operate to adapt, comply and differentiate.”
FUNMAN
2 years ago
It's having a marvelous day today. This might have something to do with it.
Schumer asks Senate colleagues to help in finalizing marijuana legalization legislation
Feb. 10, 2022 9:52 AM ET
Curaleaf Holdings, Inc. (CURLF), TCNNF, GTBIF, CRLBFCCHWF, VRNOF, ACRHF, MMNFF, JUSHF, MSOS
By: Jonathan Block, SA News Editor
https://seekingalpha.com/news/3798611-schumer-asks-senate-colleagues-to-help-in-finalizing-marijuana-legalization-legislation?mailingid=26663090&messageid=2900&serial=26663090.6828&utm_campaign=rta-stock-news&utm_content=link-1&utm_medium=email&utm_source=seeking_alpha&utm_term=26663090.6828
Senate Majority Chuck Schumer (D-N.Y.) penned a letter to Senate colleagues on Wednesday asking for their input and advice for legislation that would legalize marijuana on the federal level.
The letter is also signed by Sens. Ron Wyden (D-Ore.) and Cory Booker (D-N.J.).
"In order to appropriately address such a nuanced issue, we respectfully request the input, advice and guidance of Chairs and Ranking Members of relevant committees as well as senators who have dealt with the challenges and realities of legalization in their own states," the senators wrote.
"We would deeply appreciate your willingness to share your expertise on the intersections between your committees’ jurisdictions, your states’ experiences, and comprehensive cannabis reform and invite you to join the process of perfecting this legislation."
Since last year, Schumer has been trying to get the Cannabis Administration and Opportunity Act advanced without success.
Cannabis multi-state operators: Trulieve (OTCQX:TCNNF -0.4%), Cresco Labs (OTCQX:CRLBF -1.6%), Green Thumb Industries (OTCQX:GTBIF -0.9%), Curaleaf (OTCPK:CURLF -0.6%), Columbia Care (OTCQX:CCHWF -0.3%), Verano Holdings (OTCQX:VRNOF -1.6%), Acreage Holdings (OTCQX:ACRHF +4.7%), MedMen Enterprises (OTCQB:MMNFF), and Jushi Holdings (OTCQX:JUSHF -1.5%). Also, AdvisorShares Pure US Cannabis ETF (MSOS +1.0%).
Last week, Schumer said he anticipates introducing a final version of the legislation in the Senate in April.
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