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KELOWNA, BC, Oct. 29, 2018 /CNW/ – Valens GroWorks Corp. (CSE: VGW) (the “Company” or “Valens“), a multi-licensed, vertically integrated provider of cannabis products and services utilizing proprietary extraction processes is pleased to announce that it has signed a share purchase agreement (the “Agreement”) with Australian-based RotoGro International Limited (“RotoGro”) to sell one of the Company’s wholly owned subsidiaries, Supra THC Services Inc. (“Supra”), which currently holds the Company’s second Dealers License, for total consideration of $11,000,000. Concurrently with the transaction, the Company will transfer all of the existing assets of Supra, except the license, into a new subsidiary Valens Labs Ltd. (“Valens Labs”) and sell the remaining entity to RotoGro. Valens Labs will provide the new platform for the Company’s lab service business and ensure a seamless transition following the sale of Supra.
Sale of Supra THC Services Inc.
Under the terms of the Agreement, Valens will sell Supra, which holds a Dealer’s License under the Narcotics Control Regulations, to RotoGro for total consideration of $11,000,000. Prior to closing the transaction, the Company will transfer all assets currently held in Supra, excluding the Dealer’s License, to the newly created subsidiary Valens Labs Ltd. The purchase price will be paid at four milestones and will be comprised of $2,000,000 in cash, and 18,900,000 shares of RotoGro with a current estimated value of $9,000,000.
“RotoGro is very excited to have the opportunity to fast track its entry into the Canadian cannabis market with the acquisition of an existing Dealers License from Valens GroWorks,” says RotoGro International Limited Managing Director Michael Carli. “We were very fortunate for Valens multi-license position with Health Canada and look forward to collaborating with them as we enter the Canadian market with our Ontario-based operations.”
With the sale of Supra, the Company’s strategic focus remains unchanged as it retains licenses from Health Canada that permit cultivation, processing cannabis oil, as well as analytical testing of cannabis.
Launch of Valens Labs Ltd.
The Company is also pleased to announce that it has incorporated Valens Labs Ltd., which will continue to operate its analytical laboratory testing operations, with all the same employees and laboratory assets that were previously held by Supra. Through the launch of Valens Labs, the Company will maintain its accreditation as an ISO 17025 lab for the testing of cannabis, and a “Centre of Excellence for Plant Based Science” with Thermo Fisher Scientific.
“We are very excited to launch the rebrand of the analytical testing component of our business as Valens Labs” says Valens Groworks CEO, Tyler Robson. “Having brand alignment while maintaining the ISO 17025 accreditation and Center of Excellence for Plant Based Science, we are strategically positioned to capitalize on growth opportunities in the industry.”