Cannabis processor Valens GroWorks Corp (OTC: VGWCF) said Tuesday that it inked a multiyear extraction service agreement with Tilray Inc. (NASDAQ: TLRY) subsidiary Tilray Canada.
What Happened
Under the terms of the agreement, Valens GroWorks will extract a minimum of 15,000 kilograms of dried cannabis and hemp. Tilray will supply the cannabis and hemp and Valens will process it on a fee-for-service basis into crude, distillate or other cannabis oil derivatives. Tilray will then conduct the final processing and sale of the extracts.
Valens is a multilicense, vertically integrated provider of cannabis products and services that uses proprietary extraction methods in distillation, cannabinoid isolation and purification.
Why It's Important
Supplying cannabis and hemp extracts for one of the largest cannabis producers in the world is a major milestone for Valens, and inking a multiyear agreement will have a beneficial impact on the company's cash flow.
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What's Next
Following the expiration of the initial two-year deal, Tilray can renew its agreement with Valens GroWorks on an annual basis.
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