Article by Marijuana Business Daily
Cannabis derivative manufacturer Valens Co. said it is liquidating most of its oil inventory, citing industry trends such as outdoor marijuana harvests and falling prices.
Marijuana Business Daily has reported extensively on Canada’s glut of dried cannabis, edibles and extracts.
The Toronto-headquartered company cited:
- An anticipated increase in outdoor cannabis production.
- Falling dried cannabis prices.
- The success of its value-priced products.
Valens said the decision to liquidate the majority of its cannabis oil inventory led to a one-time financial hit of up to 10 million Canadian dollars ($7.9 million) in the fourth quarter of 2020.
That includes a write-down of almost CA$5 million, according to the company’s news release.
Valens said the liquidation achieves two core objectives:
- The company can rebuild its inventory with targeted strains of dried cannabis sourced at “opportunistic, lower price points.”
- Free of its old, more expensive inventory, Valens is more nimble and better positioned to offer a broader range of products at lower prices – “an attractive advantage to existing and potential new partners, including large consumer packaged goods (CPG) companies.”