+ 0.00
+ 0%
+ -0.01
+ 0%
+ 0.00
+ 0%
+ 0.10
+ 0.06%

Valens Enters US CBD Market With Green Roads Acquisition

April 27, 2021 12:55 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Valens Enters US CBD Market With Green Roads Acquisition

Cannabis products producer The Valens Company Inc. (TSX:VLNS) (OTCQX:VLNCF) is poised to take over Green Roads in a cash-and-stock transaction.

The M&A Deal: The Kelowna, British Columbia-based company agreed to purchase all issued and outstanding shares of Green Roads — a U.S.-based, privately owned CBD company — and its manufacturing subsidiary for $40 million.

The price tag includes roughly $25.4 million in Valens common shares at an indicative price of $2.5088 per share and up to $14.6 million in cash.

Under the terms of the agreement, Valens opted to pay an additional $20 million upon achieving certain EBITDA milestones in 2022.

Stifel GMP is advising Valens throughout the sale process, while Stikeman Elliott LLP and Foley Hoag LLP act as legal counsel. Greenberg Traurig LLP agreed to act as legal counsel to Green Roads, and Cowen is acting as its exclusive financial advisor.

What It Means For Valens: The acquisition allows Valens to enter the U.S. CBD market.

Tyler Robson, CEO of Valens, said Tuesday that the transaction "represents only the first step in our US expansion strategy as we expect to continue to unlock complimentary, revenue-generating opportunities while we forge our presence and build our reputation in the world's largest cannabinoid market."

The collaboration would also strengthen the company's leadership team as well as expand its product portfolio with a myriad of high-margin products, including oils, ingestibles, topicals, pet products, capsules and soft gels.

What's Next: Valens disclosed its plans to launch Green Roads formulations in Canada.

"With this transaction, we are able to further this mission and grow our community by reaching new markets, consumers, and partners both north of the border and globally with one of the most trusted leaders in the cannabis consumer packaged goods manufacturing space," Valens President and COO Dale Baker said in a statement. 

The move follows the company's recent CA$24.9-million ($19.68 million) acquisition of Canadian edibles manufacturer LYF Food Technologies Inc.

VLNCF Price Action: Valens shares were trading 6.06% higher at $2.80 at last check Tuesday. 

Photo Source: CNW Group/The Valens Company Inc.

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.

Related Articles

The Week In Cannabis: Amazon, Canopy's Earnings, Africa's Largest Co., Drake, Ashley Benson And More

Another busy week in cannabis saw the stock market post generalized losses, as Amazon.com Inc. (NASDAQ: AMZN) came out in support of the federal legalization of marijuana, announcing it will drop marijuana testing requirements for some of its workers. read more

Cannabis M&A Activity At All-Time Highs With Little Signs Of Slowing Down

Cannabis industry M&A activity continues to boom in 2021. Financial tech firm Refinitiv reported a 94% surge in M&A during Q1 2020. read more

Cannabis Movers & Shakers: Valens, Ayurcann, SpeakEasy, General Cannabis

Valens Shakes Up Leadership Team The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) has recently appointed Sunil Gandhi as its chief financial officer and Adam Shea as chief commercial officer. read more

Acreage Holdings Teams Up With Medterra To Develop CBD Collection

Vertically integrated cannabis company Acreage Holdings, Inc. (CSE:ACRG) (OTC: ACRGF) and Medterra CBD, LLC are joining forces to develop a CBD-based collection of products. read more