VGW stock is moving up in early morning session on Tuesday after Valens GroWorks (CSE:VGW) (OTCQB:VGWCF) has upgraded its multi-year agreement with Tilray (NASDAQ:TLRY).
Significant Expansion for Valens
Valens GroWorks is a Canadian company that is involved in providing extraction services, purification, and CBD isolation services to the ever-growing cannabis industry. One of the most important clients that the company has had over the past few years has been Tilray, a vertically integrated cannabis company, and in a new development, the two have expanded the scope of their agreement. It is, without a doubt, a significant deal for Valens, which will now have much bigger earnings from the multiyear agreement that it had penned with Tilray.
The provisions of the deal stipulate that in addition to the rise in volume in terms of extraction services, Tilray will also provide contract manufacturing services when called upon.
According to the terms of the previous deal, Valens GroWorks processed 15,000 kilos of hemp biomass and cannabis, but after the expansion of the agreement, it will now be working on 60,000 kilos of the same. It is a 300% rise and will run for two years.
VGW stock is trading higher by 5% at $4.07 on the CSE. On the OTCQB market, Valens stock is trading at $3.09, up by 5%.
However, Tilray stock is down 7% and now trading at $40.28.
On top of that, the contract manufacturing services to be provided when called upon will include the making of gel caps and tincture bottles. Additionally, Tilray could also ask Valens to manufacture vaporizer cartridges, so long as Valens abides by the regulations specified by Health Canada.
Tyler Robson, the Chief Executive Officer of Valens, stated, “This significant expansion of extraction services requested by Tilray is a true demonstration of the industry-leading service being provided to our partners.”
In this regard, it is also important to point out that Valens has made a name for itself as a service provider in the Canadian cannabis industry and currently counts some of the biggest names in the industry among its clients.
VGW stock is one of the biggest gainers this year with a jump of 155% so far in 2019. Moreover, the stock is up 300% from its 52-week low of $0.98.
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