Pushing the Limits – Valens Scales Up Extraction Capacity and Receives TSXV Listing Approval

This week the spotlight shined on Valens GroWorks Corp (CSE: VGW)—a multi-licensed, vertically integrated provider of cannabis products and services—after the company announced that it had substantially increased its annual extraction capacity to 425,000 kg of dried cannabis and hemp biomass.

Valens also confirmed that construction had commenced on its recently acquired adjoining facility in Kelowna, British Columbia. This purpose-built facility will significantly increase the company's footprint and is anticipated to be completed in H1 2020 bringing Valens' extraction capacity to over 1,000,000 kg per annum.

This new facility will significantly expand Valens' white label capacity including capsules, vaporizers, topicals, edibles and concentrates.

"This increase in scale together with our unique and comprehensive offering of CO2, ethanol, hydrocarbon, solvent-less, and terpene extraction methodologies as well as our consumer product development and manufacturing capabilities position us to be the partner of choice for leading cannabis brands both in Canada and internationally."

–Valens GroWorks CEO, Tyler Robson

In the same week, Valens GroWorks also revealed that it had received conditional approval to list the common shares and warrants of the company on the TSX Venture Exchange as a Tier 1 life sciences issuer.

Upon obtaining final approval, the company will issue a further press release to inform shareholders when it anticipates that its common shares will commence trading on the TSXV. Valens anticipates that the common shares will trade under the trading symbol "VGW" and the warrants will trade under the symbol "VGW.WT".

Management also confirms there remains 3,750,000 common shares reserved for issuance under certain management agreements as previously disclosed in the company's financial statements for the year ended November 30, 2018 and the first quarter ended February 28, 2019.

In addition, Valens has also revealed that it has expedited the release date of its second quarter financial results, which will be released after the market closes on July 15, 2019.

MediPharm Labs Corp (TSXV: LABS)—a leader in specialized, research-driven cannabis extraction and cannabinoid isolation—announced a white label agreement with AV Cannabis Inc, the owner of the top-rated cannabis brand in Canada "Ace Valley", to launch a premium line of cannabis extract-based vape pens to Canadian consumers.

Through its wholly owned subsidiary MediPharm Labs Inc, the company will provide high-quality cannabis extracts, filling services and national distribution of a line of custom-formulated Ace Valley-branded vape pens. Ace Valley will leverage its leading brand traction and product strategy expertise to design, brand and market the products.

The initial term of the Agreement is three years and relates to the production of a minimum of approximately 2 million Ace Valley-branded vape pens, subject to purchase orders and pricing from provincial distributors.

The company will receive certain fees for services related to procurement, quality assurance, manufacturing and distributing to provincial retailers, along with a portion of revenue from sales of the Ace Valley-branded vape pens.

"As more direct-to-consumer brands look to enter the rapidly growing cannabis consumer market, we will leverage our leadership position, extraction expertise and technology to produce innovative and advanced cannabis oil derivatives and build a diversified portfolio of high-margin, value add, white label products."

– Pat McCutcheon, Chief Executive Officer of MediPharm Labs 



Canopy Rivers Inc (TSXV: RIV) announced a new investment and strategic collaboration between with ZeaKal Inc, a California-based plant science innovator with proprietary technologies that sustainably increase photosynthesis, improve plant yield and enhance nutritional profiles for a variety of agricultural crops.

The investment from Canopy Rivers marks another significant corporate milestone this calendar year for ZeaKal, following the February announcement of its R&D collaboration with Corteva Agriscience (NYSE: CTVA), the recently spun-out and NYSE-listed agricultural science division of DowDuPont.

ZeaKal's proprietary technology, PhotoSeed™, increases a plant's intrinsic photosynthetic capacity, meaning that PhotoSeed™ plants can convert more sunlight and carbon dioxide into energy for growth. This results in substantial improvement in seed and grain yield, as well as improved macronutrient profiles that drive an increase in both oil and protein content.

For farmers, this means better productivity and profit margins; for consumers, this means higher nutritional profiles and an environmentally friendly way to meet growing global demand. Following Canopy Rivers' investment, ZeaKal intends to expand its program to include cannabis and hemp. 


MGC Pharmaceuticals (ASX:MXC) has received a 50% increase in orders from two of its distribution partners, following a strong second quarter for its non-pharmaceutical business units.

Medicinal cannabis distributors Health House International and Cannvalate, with which MGC Pharma has signed distribution agreements, have placed purchase orders for the company's pharmaceutical products worth around $300,000. Earlier this year, MGC split its business into two divisions: research and development and seed-to-pharmacy manufacturing. It told the market recently that it had banked over half a million dollars in revenue from its non-pharma unit.

Roby Zomer, co-founder and managing director at MGC Pharma, said the increased interest was a testament to his company's products.

The company's research and development unit is also kicking goals, with its Phase II clinical trial testing its drug CogniCann's efficacy in treating patients with dementia and Alzheimer's, recruiting patients well ahead of schedule.

"The quality and affordability of MGC Pharma's products ensure doctors remain confident when prescribing to patients and reflects strong immediate demand from the market. As Investors can most likely tell from the recent volume of material news flow, this is a busy and exciting time for the company as we rapidly grow and advance our strategy of becoming a leading international medical cannabis pharmaceutical company."

– Managing Director of MGC Pharma, Roby Zomer

Next Green Wave Holdings Inc (CSE:NGW) celebrated the launch of its' latest brand roll-out this week, with the help of influential Chicago hip-hop star King Louie.

Through an exclusive partnership with SD Cannabis, King Louie will be launching premium flower THC products and concentrates throughout his new 'Life of Louie' album world-tour and appearances at selected dispensaries throughout Southern California.

"We're thrilled to be collaborating on this product launch with King Louie, he is a trailblazer in the hip-hop industry and influential ambassador of cannabis culture in America. Together, we have the opportunity to shape the norms and perceptions surrounding cannabis culture and will offer consumers an elevated experience through the quality and delivery of our extracted oils and exclusive flower products."

– Next Green Wave CEO, Leigh Hughes

Next Green Wave also announced that it had arranged a non-brokered private placement of up to 9,090,909 common shares at a price of $0.33, for gross proceeds of up to $3,000,000. The company has reserved an overallotment of 10% of the offering.

Next Green Wave has received a lead order of $1,500,000 from a publicly listed cannabis investment company, and expects to complete the Offering imminently. Proceeds of the offering will be used for the acceleration and rollout of Next Green Wave's brands and products throughout California, including making certain payments for the SDC Ventures LLC acquisition.

The products will be developed in partnership with: Carey Hart, Sketchy Tank, Junkyard LA, Toy Machine Skateboard, WEARESDC, OSS, and recently launched King Louie and Loki the Wolfdog CBD pet products. The company may pay finder's fees as permitted by applicable securities laws and CSE policy.  Any securities issued under the offering will have a hold period of four months and a day from issuance. 


AusCann Group Holdings Ltd (ASX:AC8) substantial shareholder Canopy Growth Corporation has lifted its interest in the cannabinoid pharmaceuticals developer to 13.28%.

This came about on June 10 when the Ontario, Canada-based investor exercised more than 7.677 million options at 20 cents each for consideration of in excess of $1.535 million. Canopy, through its Australian subsidiaries – Canopy Growth Australia Pty Ltd, Canopy Growth APAC Holdings Pty Ltd and Canopy Growth Farms Australia Pty Ltd – now holds more than 42 million shares.

AusCann is targeting the treatment of chronic pain in Australia while exploring global export opportunities and expansion into additional medical areas. The company remains on track to deliver its hard-shell capsules to the market for clinical trials during 2019. AusCann shares were trading at 36.5 cents as of 20 June, up almost 3% on the previous day's close.

"I see tremendous opportunity for AusCann to lead in the delivery of cannabis-based pharmaceutical solutions that are endorsed by physicians and address the needs of patients who are suffering from inadequately treated medical conditions. The company has built a strong platform on which we will continue to grow."

– AusCann CEO, Ido Kanyon

HEXO Corp (TSX:HEXO) is reported its financial results for the third quarter of the 2019 fiscal year, ramping up to $400 million net revenue in fiscal 2020 and to double net revenue in Q4 fiscal 2019.

The company also entered a syndicated credit facility with CIBC and BMO for up to $65 million available credit to fund continuing expansion and innovation initiatives.

The quarter saw 9,804 kg of dried cannabis produced, an increase of 98% over the previous quarter, while 2,904 kg of gram and gram equivalents were sold, an increase of 8% quarter over quarter.

HEXO also completed first harvests in new 1,000,000 sq. ft. expansion as the company continues ramping up to annual production capacity of 150,000 kg of dried cannabis. 60,000 kg of hemp were secured to be supplied for CBD extraction purposes in preparation for upcoming edibles market and HEXO launch in eight American states in 2020.

Althea Group Holdings Ltd (ASX:AGH) achieved the 1,000-patient milestone, representing a +53% increase on the 651 patients reported on April 29, 2019.

The licensed producer and supplier of pharmaceutical grade medicinal cannabis has added 227 new patients in the month of May and is now averaging more than 11 new patients per business day.

Importantly, the milestone was achieved five months ahead of Althea's previously stated goal of having its products prescribed to 1,000 patients by November 2019.

In addition to passing the 1,000-patient mark and 227 patients in a single month, there are now 185 Australian Healthcare Professionals (HCPs) who have prescribed Althea's products. The company expects to increase the number of Althea prescribers to 200, by month's end.

"I'd like to thank the whole team for working hard to make this happen and reiterate my appreciation for the ongoing support of our shareholders. With our on-the-ground team and unique Althea Concierge platform, Althea is able to educate HCPs about the benefits of our products and streamline the entire medicinal cannabis prescription process."

– Managing Director and CEO of Althea, Josh Fegan

Finally, Botanix Pharmaceuticals (ASX: BOT) released new data from studies recently conducted with its antimicrobial product BTX 1801.

The studies were conducted in collaboration with Dr. Mark Blaskovich at The University of Queensland's Institute for Molecular Bioscience's Centre for Superbug Solutions and supported by Innovation Connections, an Australian Government grant.

Studies revealed that BTX1801 has managed to tackle a range of different bacteria, among both humans and animals. The synthetically-produced CBD in Botanix's product kills bacteria within three hours and lessens the bacteria's ability to develop resistance to the antibiotics.

The drug has proven effective against two superbugs so far: staphylococcus (staph) and methicillin-resistant staph Aureus (MRSA). As a result of the successful trials, Botanix' stock has risen 25%. This surge shows that medical discoveries are a huge point of interest for those with their eyes on the medicinal cannabis market.

Watch this space for future weekly updates.

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Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.

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