The Valens Company Reports Financial Results for The Third Quarter of Fiscal 2021

Published: October 15, 2021

The Valens Company Reports Financial Results for The Third Quarter of Fiscal 2021

The Valens Company Inc., a leading manufacturer of cannabis products, is pleased to report its third quarter financial results for the period ended August 31, 2021.

Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company, said, “We are very pleased with the progress we have made on our strategic initiatives to transform Valens into a leading cannabis consumer packaged goods company. Our innovative product launches have driven growth in provincial listings and we are only just beginning to see the resulting financial impact with provincial sales net revenue growing 20% quarter over quarter. More importantly, consumer demand for our products is very strong, leading to even greater growth in consumption-level retail sales for Valens products which were up 76.5% quarter over quarter. The combination of net revenue from provincial sales and the partial quarter of revenue contribution from Green Roads represented 50% of total net revenue in Q3 2021, further illustrating the early progress on our strategic initiatives.”

Robson continued, “With our operational platform largely built and a critical mass of provincial listings now in place, our focus has shifted to operational efficiencies, implementation of automation initiatives and volume growth to drive margin improvement and positive EBITDA in future quarters. During the third quarter, we strategically transitioned away from smaller, underperforming B2B partners resulting in a 29% decrease in B2B LP sales revenue quarter over quarter. We have instead taken a fewer, bigger, better approach and focused on building deeper relationships with larger licensed producer partners to drive efficiencies and profitable growth. This is illustrated by the addition and expansion of six custom manufacturing agreements, three of which are with the top seven licensed producers by market share. We expect these agreements to begin generating revenue over the next two quarters with further growth expected to follow. We remain customer focused and are looking for consistent and higher volume partnerships that drive profitability for all parties.”

Key Highlights

  • Gross revenue increased 32.7% in Q3 2021 to $24.6 million, compared to $18.5 million in Q3 2020
  • Net revenue increased 15.8% in Q3 2021 to $21.0 million, compared to $18.1 million in Q3 2020
  • Green Roads contributed $4.7 million in its revenue in first partial quarter of consolidation
  • Provincial listings increased by 37.1% to 181 at the end of August compared to 132 at the end of Q2 2021, making Valens one of the fastest growing licensed producers in Canada over the quarter and trailing year
    • Additionally, Valens has obtained approval for an additional 27 provincial listings, which, when combined with Citizen Stash’s 40 listings, will bring the pro forma company’s total count of listings to over 248
  • In Q3 2021, Valens and Citizen Stash combined were ranked 11th by overall estimated market share across all categories in AlbertaBritish Columbia and Ontario based on Hifyre data
  • Verse BC God Bud was a top 5 best-selling flower SKU in AlbertaOntario and British Columbia during September 2021 based on Hifyre data
  • Estimated share of the cannabis-infused beverage category from Summit and Basecamp beverages increased to 9.0% in Q3 2021 from 8.0% in Q2 2021 in AlbertaBritish Columbia, and Ontario, based on Hifyre data with only one customer in this category to date
    • Valens expects additional market share gains in this category beginning in Q4 2021 based upon the acquisition of Verse Cannabis and the launch of the GTA Facility
  • Provincial sales increased 20.0% compared to Q2 2021
    • Strong growth in provincial sales is expected to continue following a 76.5% increase in aggregate consumption-level retail sales in Q3 2021 compared to Q2 2021, based on Hifyre data for AlbertaBritish Columbia and Ontario
  • Strategic acquisition of Citizen Stash expected to propel Valens’ asset-light entry into the flower and pre-roll segments, the two largest categories in the Canadian cannabis market currently accounting for over 70% of retail sales
  • Ended the quarter with a strong cash position of ~$31 million

*The term “Provincial listings” refers to the total number of provincial and territorial listings in Canada of products manufactured and/or distributed by The Valens Company

Corporate and Operational Highlights
In the third quarter, The Valens Company continued to execute on its corporate strategy and advanced its global manufacturing platform, as illustrated by the following milestones and initiatives:

  • Accelerated entry into the $2.7 billion flower-based market through the agreement to acquire Citizen Stash Cannabis Corp., valued at approximately $54.3 million on an enterprise value basis, boasting an attractive multiple of approximately 4.3x first half fiscal 2021 annualized revenue. Valens expects the acquisition to be accretive, specifically due to Citizen Stash’s asset-light model which leverages a robust network of craft contract growing partners. Their award-winning brand portfolio offers more than 40 provincial listings and is complementary to Valens’ growing house of brands which now spans across seven provinces and territories.  The Citizen Stash acquisition is expected to close in the fourth quarter of 2021.

  • Created top tier Licensed Producer in Canada through the acquisition of Verse Cannabis, announced in early September and expected to be further bolstered by the acquisition of Citizen Stash when it closes.  Verse’s current and expanding portfolio of products will amplify provincial listings and drive category market share. Similar to Citizen Stash, the acquisition of Verse is expected to be accretive to the Company before synergies. The two acquisitions will provide Valens with over 248 current and pending listings across nine provinces and territories.

  • Achieved significant steps toward entry into Québec, the third largest cannabis market in CanadaDuring the third quarter, Valens became authorized to contract or subcontract with a public body from the Autorité des marchés publics (AMP).

  • Expanded international product manufacturing and distribution through new and evolving partnerships. Through an agreement with Epsilon, a diversified global healthcare and pharmaceuticals company, Valens expects to be able to offer its innovative suite of cannabis products to Australia and New Zealand through the use of Epsilon’s Southport GMP manufacturing facility. This will also allow Valens the potential to deliver GMP-grade manufactured products in Latin AmericaEurope, the UK and Asia-Pacific.

  • Strengthened custom manufacturing partnership network with the addition and expansion of six manufacturing agreements since the end of Q2 2021. The agreements cover the production of a variety of cannabis products including pre-rolls, innovative edibles, vapes, hydrocarbon concentrates, as well as expert extraction services. Three of the agreements are with the top seven Canadian licensed producers by market share, showcasing a strategic transition to a smaller set of larger licensed producer clients. The agreements are expected to commence over the next two quarters, with anticipated revenue generation during the same period.

  • Launched a range of innovative products in the edibles, concentrates, and cartridges categories.

Edibles: In partnership with Verse Cannabis, Valens introduced a 1-unit x 10mg double chocolate brownie, the third edible product under the Verse Originals line and one of the first confectionery products of its kind available in the Ontario recreational market. Additionally, Valens manufacturing and formulation technology supported the creation of Rapid Tropical Rush, the first cannabis-infused beverage introduced by the Verse brand, and currently available in AlbertaBritish Columbia, and Ontario. Valens has also partnered with A1 Cannabis to create the Summit 10 Raspberry Lemonade and Summit 10 Peach Lemonade, two additional Summit 10 beverage flavours already available in British Columbia and Alberta.

Cartridges & Concentrates: Formulated using Valens’ proprietary, ultra-refined extraction processes, the Mango Nectar vape cartridge is comprised of ultra-pure distillate and represents the newest addition to the top-selling line of vape cartridges from the Verse brand. In addition to the Mango Nectar vape cartridge, Valens, via the Verse brand, has also launched a new addition to the Live Terp series under the Verse Concentrates line, the Live Terp Guava x BC Blueberry 510 Vape Cartridge (1g), now available in Alberta and expected to be available soon in British Columbia and Ontario.

Financial Summary

  • Net revenue increased 15.8% to $21.0 million in Q3 2021 compared to $18.1 million in Q3 2020, and increased by 11.9% compared to $18.8 million in Q2 2021

   Net Revenue Breakdown

Three months ended
August 31, 2021 

Three months
ended August 31, 2020

(in thousands of
Canadian dollars)


(in thousands of
Canadian dollars)


Product Sales



Toll Processing and Co-Packing



Analytical Testing



Other Revenue


Total Net Revenue



  • Product sales revenue, including both provincial sales and B2B/B2C sales of finished goods, distillate, isolate, and oils:
    • Increased 29.7% to $19.5 million in Q3 2021 from the prior year period, comprising 93.0% of total net revenue
    • Valens achieved record provincial sales net revenue in Q3 2021 attributable to the early revenue contribution from the record level of provincial listings compared to the prior year period
    • Strategically transitioned away from underperforming B2B partners during the quarter, focusing on fewer, bigger, better partnerships announced subsequent to quarter. This is illustrated by a 29% decrease in B2B revenue quarter over quarter end.
  • Gross profit was $5.6 million, or 26.8% of net revenue in Q3 2021 compared to $7.3 million, or 40.3% of net revenue, in Q3 2020
    • Gross profit was impacted in the third quarter by new product launches, inefficiencies due to rapid volume growth and human resources scale-up and the Company’s continued shift away from its historical focus on toll processing and towards the current strategic focus of product development, manufacturing, and branded B2C products.
  • Adjusted EBITDA(1) was $(6.2) million, or (29.5)% of net revenue in Q3 2021, compared to $1.4 million, or 7.9% of net revenue in Q3 2020
    • The reduction in adjusted EBITDA can be attributed to the Company’s strategic transition (as discussed above) and insurance costs related to Valens application to list on the Nasdaq.

The following table of financial highlights is presented in thousands of Canadian dollars, except per share, biomass extracted amounts, and number of provincial listings.

Three months
ended August 31, 2021;

Three months
ended May 31, 2021;

Three months
ended February 28, 2021;

Three months
ended November 30, 2020;

Three months
ended August 31, 2020;

Q3 2021

Q2 2021

Q1 2021

Q4 2020

Q3 2020

Gross Revenue $






Net Revenue $






Gross Profit (loss) $






Gross Profit %






Adjusted EBITDA $(1)






Adjusted EBITDA






Net income (loss) $






Net income %






Basic / diluted
income (loss) per
share $






Cash and marketable
securities $






Biomass extracted
(Kilograms) (2)






Provincial Listings






  1. Adjusted EBITDA is a non-GAAP 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 income (loss) and comprehensive income (loss) from operations, as reported, before interest, tax, depreciation, and amortization, and adjusted for removing share-based payments, realized gains and losses from short term investments and liabilities, and other non-cash items including impairment losses. Management believes this measure provides useful information as it is a commonly used measure in the capital markets to approximate operating performance on an adjusted basis as described above. See reconciliation of “Adjusted EBITDA (non-GAAP measure)” in the Company’s Management’s Discussion and Analysis for the period ended August 31, 2021, for additional information.
  2. Biomass extracted includes input from Licensed Producer partners for toll processing, in addition to the Company’s biomass inventory for 2.0 products.

1Based on Hifyre data for AlbertaOntario and British Columbia

About The Valens Company 
The Valens Company is a leading cannabis consumer products company, with significant expertise in manufacturing cannabinoid based products and a mission to bring the benefits of cannabis to the world. Valens provides proprietary cannabis processing services and best-in-class product development, manufacturing, and commercialization of cannabis consumer packaged goods. Valens’ high-quality products are formulated for the recreational, health and wellness, and medical consumer segments and are offered across all cannabis product categories, with a focus on quality and product innovation. Discover more on The Valens Company at

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