The Valens Company Borrows $31.3M To Retire Its Debt And Strengthen Balance Sheet

Cannabis manufacturer The Valens Company Inc. VLNS VLNS will borrow CA$40 million ($31.3 million) from a private institutional lender. The company, based in  Kelowna, British Columbia-based, confirmed on Thursday it has entered into a secured non-revolving term loan with 2361380 Ontario Limited.

"With this strategic secured financing, Valens is now well positioned to accelerate its aggressive growth strategy, further fund its Canadian operations, and capitalize on new growth opportunities as the company works toward expanding its presence in the United States,” said Tyler Robson, CEO and chairman of The Valens Company. ”This CAD$40 million Term Loan reflects the unique value proposition that Valens has created in the market, as well as the continued confidence from our management, board, and shareholders in the continued execution of our business plan."

Loan Details

The loan will accrue interest at a rate of 10% per annum, payable quarterly, and matures on Dec. 15, 2023, with an initial interest payment date on Dec. 31, 2021.

Proceeds from the loan will further strengthen Valens’ balance sheet, allowing it to execute on its corporate strategy and fund working capital needs as the business continues its aggressive growth trajectory, as well as immediately retire the remaining $7.5 million outstanding under its existing debt facility.

"This is a very attractive cost of capital and a non-dilutive financing solution that provides more financial flexibility, fewer covenants and restrictions and better enables us to aggressively penetrate our target markets and create shareholder value,” Jeff Fallows, president of The Valens Company stated. “This transaction, not only funds our current business plan but also strengthens our balance sheet.  As a result, we do not anticipate the need to raise additional equity capital in the near term."

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The Week In Cannabis: Isiah Thomas, Tilray, The DEA, Ohio, Mexico And More

Cannabis Producer The Valens Company Starts Trading On Nasdaq Dec 9

Price Action

Valens shares closed Wednesday market session 5.19% lower at $2.74 per share.

Photo: Courtesy of Roberto Valdivia on Unsplash