CAN (BC): The Valens Company to acquire craft grower

The Valens Company is set to acquire Citizen Stash Cannabis for approximately $54.3 million on an enterprise value basis.

"Citizen Stash is a licensed cultivator and processor of premium craft cannabis products based in Mission, British Columbia, and will provide Valens the opportunity to unlock additional growth with its extensive and specialized product portfolio in the premium flower and pre-roll segments," The Valens Company team explains. "Citizen Stash operates a unique, asset-light platform comprised of a network of craft contract growing partners from which it selectively sources premium bulk flower grown from Citizen Stash's industry leading proprietary genetics. Citizen Stash manufactures and packages flower and pre-roll products primarily through manual processes."

Citizen Stash is one of the top performing premium brands in the flower and pre-roll categories. Based on Hifyre data for the flower category during March to May 2021 in the markets of Ontario, Alberta and British Columbia, Citizen Stash is the highest ranked premium brand by market share in the flower category with an average selling price above $13.00 per gram and is the only brand in the top 20 by market share with an average selling price above $13.00 per gram. Within the pre-roll category during March to May 2021 in the markets of Ontario, Alberta and British Columbia, Citizen Stash is the third highest ranked premium brand with average selling price above $13.00 per gram and one of only five within the top 20 overall brands. The Citizen Stash brand has demonstrated very impressive strength in the competitive flower and pre-roll categories with year-over-year market share gains unlike many other competitor brands – a testament to the product quality and consumer loyalty borne out of Citizen Stash's industry leading genetics.

Tyler Robson, Chief Executive Officer and Chair of the Board of The Valens Company, said, "We are excited to join forces with Citizen Stash's experienced team and broaden our offerings in the flower and pre-roll verticals with a best-in-class brand. The premium price tier of the flower and pre-roll segments represents the best expansion opportunity for Valens in the flower category, as premium brands are the hardest to build, while also capturing the highest margins. Citizen Stash's asset light model, and proprietary genetics will provide us significant operational flexibility and an opportunity to leverage the growing capabilities of our existing LP partners. In short, this strategic acquisition will allow Valens to significantly expand its presence in the recreational market and capture a share of the largest categories of the Canadian cannabis space without the burden of a high-cost growing infrastructure. We are opportunistically expanding our product offering to align with consumer demand for high quality craft cannabis flower and pre-rolls."

Jarrett Malnarich, Chief Executive Officer of Citizen Stash, said, "Combining our business with The Valens Company represents an outstanding opportunity for our company and the shareholders of Citizen Stash and is wholeheartedly endorsed by our Board of Directors. We look forward to the full integration of Citizen Stash with The Valens Company. We believe the combination will create a leading platform in the Canadian cannabis industry which spans all categories, while focusing on profitability and creating value for all shareholders. Together we look forward to taking the Citizen Stash brand to new heights that Citizen Stash could not have achieved on its own, by leveraging Valens' best-in-class, low-cost manufacturing capabilities and industry leading distribution scale. In our collaboration with Valens to date, Citizen Stash has come to realize the common values we share centered around providing consumers with the highest quality cannabis products. We anticipate that the future of our combined company will be filled with product innovation fueled by our shared entrepreneurial vision and mission to provide outstanding consumer experiences in both domestic and global markets. We look forward to the support of our shareholders in completing this transaction and the full integration of our two businesses."

For more information:
The Valens Company
230 Carion Road, Kelowna, BC, V4V 2K5
1 (778) 755-0052
info@thevalenscompany.com  
thevalenscompany.com  


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