The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) delivered its second-quarter financial results ending May 31, 2021. Valens reported that its gross revenue increased 16.1% to $20.5 million and net revenue increased roughly 7% in Q2 2021 to $18.8 million compared to $17.6 million in Q2 2020.
In June, Valens entered the US market with the acquisition of Green Roads for $40 million. With the Green Roads acquisition, Valens more than triples its total addressable market and secures a global leadership position in the cannabis health and wellness vertical with one of the largest CBD brands by market share. Valens plans to invest approximately $10 million into Green Roads to strengthen its resources across various business lines.
“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,” said Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company.
The company said it plans to use the bulk of the net proceeds, $28 million, to pursue opportunistic acquisitions and business expansion opportunities across North America and international markets. The remaining proceeds will be used for capital expenditures, working capital, and other global general operating expenses.
Robson concluded by saying, “We look forward to continuing to drive new product innovation in the sector, specifically in the flower, pre-roll, beverage, concentrates, and edibles categories. With our recent distribution wins into New Brunswick, Manitoba, and Yukon, we are positioned well to capitalize on these investments.”
President Jeff Fallows added, “This equity raise provides Valens with the capital to pursue its strategic initiatives, specifically by taking an opportunistic approach to additional accretive acquisitions and to further secure our entrance into additional Cannabis 2.0 and 3.0 product verticals.”
The company noted that its recent $46 million bought deal financing was closed subsequent to quarter-end on June 1, 2021.