Valens GroWorks Corp (CSE:VGW) (OTCMKTS:VGWCF) has increased its annual extraction capacity in a bid to address growing demand for extraction and white label product development, it said in a release Tuesday.
The Kelowna-based cannabis company upped its annual capacity to 425,000 kilograms of dried cannabis and hemp biomass, a significant increase from the 240,000 figure it had announced earlier in the year.
The firm is now the largest third-party extraction company in Canada. Shares jumped 12.2% on Tuesday afternoon to close the day at C$3.87 in Canada and US$2.88 on OTC markets.
"We are excited to announce this significant advancement in our annual extraction capacity as we make room for more demand from our partners," said CEO Tyler Robson.
"This increase in scale together with our unique and comprehensive offering of CO2, ethanol, hydrocarbon, solvent-less, and terpene extraction methodologies as well as our consumer product development and manufacturing capabilities position us to be the partner of choice for leading cannabis brands both in Canada and internationally."
Valens President Jeffrey Fallows commented that the company’s highly customized infrastructure enables Valens to leverage a variety of extraction technologies from around the world, placing it at the “cutting edge” of the industry.
Valens also announced that construction began on its recently acquired Kelowna facility, anticipated to increase extraction capacity to over 1 million kilograms per year. The new facility is expected to be completed during the first six months of 2020.
READ: Buds & Duds: Cannabis stocks nudge up, but Valens shares soar on Tier 1 life sciences issuer news
The increase comes at a time when marijuana edibles and concentrates are expected to hit Canadian shelves by the end of the year. Robson said that the company has worked on its formulation portfolio to enable its partners to differentiate their offerings.
“While we continue to operate as a best-in-class provider of crude oil, winterized oil, distillate, and isolate to the cannabis market, our new capacity will also allow us to expand our capabilities in product development and manufacturing to meet changing consumer market demands,” Robson said in a statement.
Product opportunities abound
Valens plans to increase its capacity to expand into the highly lucrative consumer packaged goods industry, according to Robson.
"As the cannabis market evolves, we expect to see the creation of entirely new categories of cannabis-based products driven by a greater understanding of the potential uses of cannabis,” he said.
“Already, we are seeing an expanded portfolio of cannabis-based products emerging in the consumer packaged goods industry, ranging from beverages to cosmetics, skincare items, and beyond. Our modern extraction technology and unrivalled expertise uniquely positions us to capitalize on this opportunity."
The company recently received conditional approval to list shares and warrants of the company on the TSX Venture Exchange as a Tier 1 life sciences issuer.
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