Valens stock is down slightly on Friday after cannabis extraction firm Valens GroWorks Corp (TSXV:VGW) (OTCQX:VGWCF) announced that it had signed a multi-year white label agreement with BRNT Ltd to launch a line of cannabis vape pens in Canada.
Largest Multi-Year White Label Agreement in the Industry
Under the terms of the deal, the British Columbia-based firm will produce 2.2 million vape pens for BRNT over a two and a half year period, which will have a potential revenue return of more than $50 million CAD. The deal represents the largest multi-year white label agreement for a branded finished product in the Canadian cannabis industry, with products going to market in the first quarter of 2020. While Valens stock was initially boosted by the deal, it is trading down about 1% on Friday morning.
"As Valens begins official production of next-generation products for Cannabis 2.0, we are excited to be collaborating with BRNT to bring to market a line of differentiated, high quality, concentrate vape products for Canadian consumers," said Valens GroWorks CEO Tyler Robson. Cannabis 2.0 came into effect last month, opening up the cannabis market in Canada to a host of new products, including vapes and edibles. With Valens stock down over 40% since May, investors will be eager for the 2.0 market to provide a much-needed catalyst for change.
Huge Potential for Valens Stock
Despite the declining value of Valens stock in recent months, it has actually fared better than most other pot stocks and made some potentially very lucrative deals. In September, the company became the first third-party cannabis firm to sign a deal with Shoppers Drug Mart, which will see it supply the pharmacy chain with a range of oil-based products such as gel-caps, tinctures, vape cartridges, and topicals.
Valens stock has the potential to be one of the biggest gainers in the 2.0 market, given how pivotal its service is to the industry. It is one of two leading cannabis extraction firms in Canada, along with MediPharm Labs (TSX:LABS) (OTCQX:MEDIF), both of which are key to the production process of cannabis derivative products, which are expected to bring three million new consumers to market next year.
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