The Valens Company (CVE:VLNS) (OTCQX:VLNCF) has announced a custom manufacturing agreement with Verse Cannabis, a group focused on bringing inventive product formulations rooted in cannabinoid science to the market.
Under an initial five-year agreement, Valens will manufacture and distribute a range of next-generation products, such as hydrocarbon-derived crumble, one of the first such entries into the Canadian legal market.
The Canadian leader in extraction revealed that two initial product lines will be launched. The first line will be manufactured under the brand Verse Originals, which will include a range of high-quality vapes and oils with unique terpene profiles. The second Verse Concentrates line will be introduced with crumble and an innovation-led product pipeline. The new partnership will also produce live resin vape pens and various water-based products leveraging SōRSE by Valens emulsion technology.
Valens will pay Verse royalties over the five-year term.
In a statement, Valens CEO Tyler Robson said that the company was “excited” to develop “new, long-awaited products” with a brand that values quality and innovation “as much as we do."
"In partnership with Verse, we will be introducing a wide assortment of reimagined cannabis products yet to be seen in the legal Canadian market, but very much in line with the expectations of experienced cannabis users," added Robson.
Vape and concentrate product formats continue to present a significant market growth opportunity and generate a substantial portion of cannabis sales in North America. In 2019, the vape and concentrate product categories represented 33% of total sales in mature markets like California and Colorado, said the company.
In Colorado, sales growth in these product categories has outperformed growth in the flower category, being responsible for more than 50% of total sales growth from 2016 to 2019. Furthermore, concentrates alone make up 14% of sales in Colorado's legal market, according to Cannabis Intelligence.
Due to Canada's phased rollout, the illicit market for concentrates continues to thrive and outperform the products in the legal cannabis market, Valens said.
“Manufacturing popular, advanced products with Verse can put into motion an important consumer migration opportunity from the illicit market that The Valens Company hopes to bring to life with this partnership,” the company added.
Tyler Robson said: "Concentrates have a long history in Canada, albeit in the illicit market. We now see a genuine opportunity to offer popular products, redeveloped based on the highest standards and our proprietary hydrocarbon processes.”
The Valens boss noted that over the last three years, the company has created a “state-of-the-art platform that holds the highest regulatory certifications for hydrocarbon extraction.”
“Our proprietary technologies, knowledge, and mass production capabilities will be used to create premium concentrate products that will satisfy a large void in Canada's current legal market," he added.
Valens is the largest third-party extraction company in Canada with an annual capacity of 425,000 kilograms of dried cannabis and hemp biomass at its facility in Kelowna, British Columbia.
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