The Valens Company Inc. has closed on its acquisition of all of the issued and outstanding shares of LYF Food Technologies Inc.
The cash and share transaction totaled CDN$24.9 million payable on closing, plus approximately CDN$17.5 million in post-closing consideration subject to achieving certain earn-out EBITDA milestones. With this acquisition of LYF, Valens has accelerated its footprint in the edibles category, which is one of the fastest-growing segments of the Cannabis 2.0 and 3.0 markets.
"We are incredibly excited to officially welcome LYF to the Valens family, which will undoubtedly strengthen our manufacturing leadership position given their confectionery expertise and broad network of partners and retailers,” said Tyler Robson, CEO, co-founder and chair of The Valens Company. “The closing of the LYF acquisition, and the addition of their leading edibles platform, signifies the completion of a key milestone in our strategy to drive SKU growth in new product categories and maximize market share gains across the country. We have already begun diversifying our product offering with the launch of various soft chews manufactured in LYF's facility, and we have a strong pipeline of new innovative edible products we believe will increase both quality and variety in the existing edibles segment in Canada today."
With the addition of the LYF facility, the company now has the capability to produce a range of edible products in various formats and dosages as part of its central platform. The added product development and manufacturing flexibility makes the platform easily adaptable to evolving consumer preferences and changing market regulations around edible products as
Valens looks to expand both in Canada and globally. Additionally, Valens welcomes several new team members who have gained valuable experience working in the confectionery, commercial-scale food manufacturing and cannabis industries, and bring with them the knowledge to produce unique and expected higher-margin products such as honey, granola balls, baked goods and various gourmet gummy and chocolate formats. Vegan, sugar-free and low-sugar formats are available and will be especially complementary to the development of Valens' health and wellness product suite.
In the first quarter of 2021, Valens and LYF launched edible products with shared partners A1 Cannabis Co. and Verse Cannabis. In partnership with A1 Cannabis, LYF launched the Summit Wild Berry Soft Chews, made with real-fruit juice, no added colors or flavors and 5 mg THC per soft chew.
Additionally, The Valens Company and Verse Cannabis launched Verse Soft Chews – a new line of edible formulations and unique flavors at a great value. The new product lineup includes Verse Baked Apple Soft Chews, infused with flavors of green apple and cinnamon, and Verse Sour Medley Soft Chews, a variety pack of five sweet and sour flavors, including Green Apple, Raspberry, Watermelon, Pineapple and Cherry. Each pouch contains five soft chews each with approximately 2 mg THC and formulated with Valens' premium cannabis distillate. The Verse Baked Apple Soft Chews are now available in Alberta and are expected to be available shortly in British Columbia and Ontario, while the Verse Sour Medley Soft Chews will be available in the coming weeks in Alberta and British Columbia.
The Valens Company expects to ramp up shipments of edible products to provincial retailers in the coming weeks, including existing SKUs such as Citizen Stash Strawberry Mac gummies from LYF's white-label agreement with Experion Biotechnologies Inc. In the second quarter of fiscal 2021, the company intends to launch an assortment of unique, consumer-driven edible products into the market.
"We are ready to hit the ground running with the Valens team as a unified manufacturing force in the Canadian recreational market,” said LYV co-founders Paolo Pero and Matthew Amado. “Our shared passion for putting consumers at the forefront of product development, formulation and commercialization will be demonstrated as we begin rolling out various edible products that the Canadian market has never seen before."