The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) has struck a five-year deal with an Australian healthcare and pharmaceuticals firm that will expand international reach through a good manufacturing practices (GMP) facility.
In a statement Wednesday, the Kelowna, B.C.-based company said it’s partnered with Epsilon Healthcare Limited (ASX: EPN) to access its GMP facility in Australia, providing Valens with access to markets in Latin America, Europe, U.K. and the Asia-Pacific regions.
Epsilon’s Southport Facility in Queensland is the largest cannabis manufacturing facility in the southern hemisphere, the firm adds, and it’s the largest at domestic scale with Therapeutic Good Administration and EU GMP capabilities.
All operational and capital expenditure of the Australian facility will be funded by Valens in return for “preferential access for up to 85 per cent of the operational capacity of the Southport Facility over the next five years, with an option to extend this arrangement for an additional six years.”
Valens’s Australian partner, Cannvalate PTY Ltd, will distribute products. The company says it will be the largest quantity of products provided through Cannvalate to date.
The Epsilon deal marks the first GMP-manufactured products to be sold through Valens in Australia.
“With this partnership we have fulfilled our promise to achieve GMP manufacturing in 2021 and we have gained access to international cannabis markets through the ‘Valens way,’ utilizing an asset-light approach that allows us to export to GMP markets globally,” Valens CEO Tyler Robson said in a statement.
“With the rapid unit volume growth coming out of our K2 facility that was built to GMP standards, we believe this agreement offers us the best of both worlds — access to GMP manufacturing without giving up on domestic revenue growth opportunities.”
Company stock dropped 6.27 per cent Wednesday to $2.69 on the Toronto Stock Exchange.