The Valens Company Inc (TSE:VLNS) (OTCQX:VLNCF) (FRA:7LV) posted fiscal second-quarter results that saw its revenue jump nearly 7% year-over-year on the back of successful new product launches across multiple cannabis categories and scaled up manufaturing capabilities.
For the period ended May 31, 2021, the manufacturer of cannabis products reported revenue of $18.8 million, compared to $17.6 million in the fiscal second quarter of 2020.
Valens also reported that product sales increased by 70.5% in 2Q 2021 to $16.9 million, compared to $9.9 million in the same quarter a year earlier. The company chalked up rocketing sales to “successful new product launches” across multiple cannabis categories as “partners expanded their portfolios in parallel with Valens’ scaled-up manufacturing capabilities.” Product sales as a percentage of net revenue remained at around 90% in the quarter.
During fiscal second quarter 2021, the company manufactured 57 SKUs across all cannabis categories, compared to 53 SKUs in the same period in 2020, with a focus on driving higher efficiencies through increased listings across provinces.
Valens ended the quarter with a strong cash position of around $23.9 million, prior to the closing of a $46 million bought deal financing on June 1, 2021.
In a statement accompanying the numbers, Valens CEO Tyler Robson said: “We believe that our business model remained resilient despite ongoing challenges presented by the pandemic, and our strategy continued to demonstrate its effectiveness as we gained significant market penetration across the country.”
“We are proud to share that in the second quarter alone, Valens had 132 SKUs listed in Canada – a 76% increase in comparison to 75 SKUs listed in the first quarter of 2021. This material growth in SKU listings stands in stark contrast to many of our competitors in the sector and is a testament to the innovation and quality we are bringing consumers and retailers.”
Robson noted that the firm is seeing the momentum continue into the third quarter with an “additional 40 SKUs accepted by the provincial boards with shipments during the third and fourth quarters.”
“These new listings include products from four newly entered categories during the second quarter, such as flower, pre-rolls, topicals, and edibles, with many of them already receiving high consumer acclaim,” added Robson. “Additionally, we have enhanced our platform with increased technical capabilities and greater efficiency to develop and commercialize winning products, which we expect will drive revenue growth in the second half of fiscal 2021.”
During the busy quarter, Valens entered the US market with the acquisition of Green Roads for $40 million, which closed in June. In combination with Green Roads, Valens more than triples its total addressable market and secures global dominance in the cannabis health and wellness vertical with one of the largest CBD brands by market share.
“The acquisition strengthens Valens’ capabilities to supply global markets with an expanded product offering and increased speed to market with a US-based manufacturing and cGMP certified co-manufacturing platform,” said the company.
Valens also expanded its Canadian distribution network to supply Manitoba, New Brunswick, and the Yukon territory. The firm now distributes its products in six provinces and one territory, including Alberta, British Columbia, Ontario, and Saskatchewan.
“Expansion of Valens’ distribution platform continues to be a top priority and the company intends to bring its innovative product portfolio to consumers in all regions of Canada including the remaining eastern provinces in the second half of fiscal 2021, with entry into Quebec being a top priority,” said the company.
Simultaneously, Valens entered into four new product categories, including flower, pre-rolls, topicals, and edibles, significantly increasing the company’s total addressable market.
Contact the author Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive
Story by ProactiveInvestors
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