Valens (OTC:VLNCF) definitely wasn't among the group of Canadian marijuana stocks that languished in 2019. The cannabis extraction services provider's shares have skyrocketed 127% year to date. And Valens appears to be poised for an even bigger year in 2020.
I think that Valens just might be the biggest winner of all in Canada's Cannabis 2.0 market. Valens claims multi-year extraction agreements with several of the biggest Canadian cannabis producers, including Canopy Growth, HEXO, Organigram, and Tilray. If these companies' cannabis derivatives products sell well (and I suspect they will), Valens will succeed, too.
Valens should also generate strong growth from its white-labeling deals. Under these contracts, Valens buys cannabis, extracts derivatives such as CBD and THC, packages the final products (edibles, vapes, etc.), then sells the products to a third party who markets them under its own brands. Valens already has white-labeling agreements with BRNT, Shoppers Drug Mart, Iconic Brewing, and Sorse Technology. The company says that it's in negotiations related to over 50 other opportunities.
The Canadian market should be enough on its own to fuel Valens' growth. However, the company could also benefit from international growth. Valens is focusing especially the European, Latin American, and Australian medical cannabis markets. It's also eyeing the U.S. hemp CBD market over the longer term.
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