The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) (the “Company,” “The Valens Company” or “Valens“), a leading manufacturer of cannabis products, is pleased to announce that it has completed a transaction to acquire Verse Cannabis (“Verse“) including all of the Verse intellectual property. This acquisition, and Valens’ recently announced agreement to acquire Citizen Stash Cannabis Corp., positions Valens as a top tier cannabis licensed producer in the Canadian industry by total provincial listings and market share.
Since launching in August 2020, Verse has emerged as a leading cannabis brand with a wide-ranging portfolio that spans all major product categories. Verse has been a pioneer in the value segment starting with its Tropic Lemon 510 thread vape cartridges (including one of the first 1.0g cartridges on the market) and continuing with the recent launch of BC God Bud 28g offering. Today, Verse boasts a number of innovative products in its portfolio such as the Sour Medley and Baked Apple Soft Chews, Double Chocolate Brownie, THC and CBD SoRSE-based drops and the Rapid Tropical Rush beverage to name a few. With over 90 provincial listings across 7 provinces and territories today, Verse offers a wide selection of high-quality products providing consumers an array of cannabis consumption experiences without the uncomfortably high price point. Valens aims to leverage Verse products as its lead value-focused offering within its brand portfolio.
Tyler Robson, Chief Executive Officer and Chair of the Board of The Valens Company, said, “The acquisitions of Verse and Citizen Stash were motivated by an underlying desire to become an ally to both our customers and consumers. We believe in creating best-in-class products that consumers deserve in the right way, without ever cutting corners. Whether it’s medical or recreational, local or international, third-party owned brands or Valens owned brands, we’re pursuing purity in extraction, formulation, product development and testing to bring the benefits of cannabis to the world. The expanded platform we have built at Valens is now positioned to better serve current and future customers and consumers through unique product offerings at attractive price points while maximizing shareholder value through Valens branded products.”
Strategic Highlights
With the acquisition of Verse and the recently announced agreement to acquire Citizen Stash, The Valens Company is now well positioned to drive market share gains, close the existing valuation gap with large, licensed producer peers, and maximize value for all its shareholders.
- Bolstering of the Valens brand portfolio with a leading value brand: Strategic tuck-in acquisition ideally positioned to leverage Valens low-cost infrastructure. This acquisition, paired with Citizen Stash, places Valens’ pro forma owned brands at both ends of the pricing spectrum maximizing operational flexibility, balancing margin and volumes, and reducing market risk while minimizing conflict with existing LP partners.
- Accretive transaction: Expected to be accretive to the Company in 2021 and 2022 before synergies. With the completion of the Verse acquisition, Valens will now recognize full revenue from branded provincial sales with no royalty payments to Verse and will not require any incremental capital investment.
- Existing Valens manufactured product portfolio with a strong pipeline ripe for expansion: Having worked with Verse from the beginning, Valens has intimate knowledge of the brand identity and helped foster its success in the marketplace. Valens has a robust pipeline planned for new innovative products under the Verse brand and this transaction furthers its commitment to bring the highest quality products to consumers.
- Becoming an ally to both our customers and consumers: The hybrid branded/unbranded business model mirrors that of established industries outside of cannabis. Similar industries such as alcohol, pharmaceutical, nutraceuticals, and packaged foods leverage similar models to leverage their manufacturing expertise and improve their capacity utilization.
- Leverageable portfolio of brands and IP for entrance into the US THC market upon federal legalization: The Verse brand with its market leading product formulations, and the Citizen Stash brand with its robust catalogue of premium genetics are all assets that will prove valuable upon entrance into the US THC market upon federal legalization.
Conference Call & Webcast Presentation
The Valens Company will host a conference call and webcast concurrently with an accompanying presentation to discuss the Verse Acquisition and the Citizen Stash Acquisition on Wednesday September 1, 2021, at 11:00 AM ET / 8:00 AM PT.
Toll-Free: 1-877-407-0792
Toll / International: 1-201-689-8263
Conference ID#: 13722732
Webcast Link: http://public.viavid.com/index.php?id=146411
Please visit the webcast link at least 15 minutes prior to the presentation to register, download, and install any necessary audio software. An archived replay of the webcast presentation will be available on the Valens investor page of the Company website at https://thevalenscompany.com/investors/. The accompanying presentation deck can be found at this link.
At Valens, it’s Personal.
Sources:
1Hifyre data for the markets of Ontario, Alberta and British Columbia during March to May 2021
