Valens GroWorks Corp., a multi-licensed, vertically integrated provider of cannabis products and services focused on various proprietary extraction methodologies, distillation, cannabinoid isolation and purification, as well as associated quality testing is pleased to report its financial results for the first quarter of fiscal 2019.
Key Financial Highlights of The First Quarter of Fiscal 2019
- Revenue increased to $2,220,200 for the first quarter of 2019 compared with $nil in the same period in fiscal 2018.
- Gross profit increased to $850,525, or 38.3% of revenue, for the first quarter of 2019 compared with $nil in the same period in fiscal 2018.
- Strong balance sheet with $20,552,286 in cash and short-term investments and a net working capital position of $26,391,610 as at February 28, 2019.
- Subsequent to quarter end, $43,125,000 gross proceeds raised through bought deal financing providing strong cash position to be able to execute on the Company’s growth plan.
Key Operating Highlights of The First Quarter of Fiscal 2019
- Added four new extraction partnerships in the first quarter of 2019 and an additional two subsequent to the end of the quarter, including The Green Organic Dutchman Holdings Ltd, Tilray Canada Ltd., Organigram Inc, Sundial Growers Inc and Canopy Growth Corporation.
- 1,796,000 grams of dried cannabis and hemp biomass was processed in the first quarter of 2019.
- 4,976,000 grams of dried cannabis and hemp biomass was processed in the first 55 days subsequent to the end of the first quarter, a 177.1% increase over the total biomass processed in the entire first quarter of 2019.
- Increased annual extraction capacity significantly to 240,000 KG of dried cannabis and hemp biomass in the first quarter of 2019 to prepare for increasing customer demand.
- Subsequent to the quarter end, the Company increased its extraction, post processing and white label product development footprint from 25,000 square feet to over 50,000 square feet with the acquisition and expansion of 230 Carion Road and 180 Carion Road in Kelowna, BC.
Tyler Robson, CEO of Valens, said, “The first quarter of 2019 was a key inflection point for Valens as we accelerated our ramp up into commercial production, generating revenues of $2.2 million compared with $nil in the same period of fiscal 2018. This initial momentum was driven by contracts signed late in 2018 to provide cannabis extraction services to leading licensed producers, including Canopy Growth and Harvest One. The growth in the size and frequency of shipments from these contracts increased throughout the quarter and into the second quarter of fiscal 2019, while at the same time we also secured a number of new, large scale contracts with other leading licensed producers including with Organigram, Tilray, and The Green Organic Dutchman. We believe our success in securing these large scale contracts with industry leading customers validates our business model and the quality of the service we are able to provide. Further, they necessitated our recent capacity expansion to 240,000 KG of dried cannabis and hemp annually, which has made us the largest extraction company in Canada, with an unparalleled breadth of service encompassing all the major extraction methodologies, as well as formulation, product development and analytical testing solutions.”
“We continue to execute our strategic business plans to lead the industry in extraction, post processing and white label product development. This plan includes further increases to our extraction capacity at the Kelowna facility and building out the recently acquired adjacent property to add additional capacity. We expect Valens’ position as the world’s leading production partner to the cannabis industry to strengthen, accelerate and grow in both the near and long-term. Our ongoing investments in the business will ensure we have a platform to support this anticipated significant increase in volumes and revenues throughout the remainder of fiscal 2019 and beyond,” concluded Mr. Robson.