Kelowna, British Columbia-based cannabis product manufacturer The Valens Co. is shuttering and selling a facility in Mission, British Columbia.
Valens acquired the facility when it bought Citizen Stash Cannabis Corp. in 2021.
Citizen Stash production has been moved “to our highly automated Kelowna facilities to centralize manufacturing and optimize margins,” Valens said in a late Tuesday news release announcing the closure.
“We have also decreased the cost of supply by transitioning to new contract arrangements and optimizing the contract grow network.”
Valens added that it is “monetizing” the facility and other Citizen Stash assets.
The company declined to tell MJBizDaily whether any jobs were cut as part of the facility closure.
The facility closure and asset sales follow a bought deal offering that Valens said raised gross proceeds of $28.75 million.
Valens said its decision to issue equity “was not taken lightly” but that its “asset-light strategy,” which involves purchasing cannabis from other growers rather than cultivating it themselves, required more working capital.
The company said it also wanted to bolster its balance sheet in the face of “ongoing inflationary cost pressures, a volatile supply chain, and heightened geopolitical risk.”
Valens said it’s weighing investments in manufacturing at recently acquired Florida hemp-CBD manufacturer Green Roads.
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The manufacturer plans “to integrate previous acquisitions and to right size our cost structure before pursuing any additional acquisitions,” according to the release.
“As we continue to make progress on this objective, we will become increasingly opportunistic to take advantage of the growing number of attractive assets in both the U.S. and Canada which are hitting the market at significantly discounted prices.”