Article by David Wylie, Castanet
We spoke with chief operating officer at The Valens Company, Chantel Popoff.
With Cannabis 3.0 on the horizon and Valens’ acquisition of edibles maker LYF, the Kelowna company is well positioned to offer consumers cannabis products that fit into their every-day life.
They’re poised for growth in Canada and beyond.
the oz. – What exactly is Cannabis 3.0?
Popoff – Essentially 3.0 products focus on bringing the benefits of cannabis derivatives into more mainstream health products already present in consumers’ homes.
Some examples would be:
- THC or CBD-infused bath bombs
- THC-infused lip balm
- THC or CBD-infused honey
- CBD-infused topical creams.
These are not just for pain relief, but also every-day items such as moisturizers.
Essentially, the more advanced we get in cannabis products, the more mainstream or the more regular common items in the household are going to be carrying cannabis derivatives. 4.0 will see an even broader spectrum of cannabis infused deliverables made available to the consumer.
the oz. – How do companies prepare for this evolution in cannabis?
Popoff – Be able to predict what consumers are looking for by watching the trends that have happened down in the U.S. California is a great example.
Companies were offering cannabis-infused products such as skin creams, moisturizers, and every-day food items such as salad dressings, honey, and coffee over three years ago — these are things consumers have in their every-day lives and now they want the benefits of cannabis infused into them.
Consumers don’t want to have to change their habits or their day-to-day routine, rather they just want to do a direct substitution of cannabis infused products into their everyday purchasing habits.
The success of being able to position yourself to support 3.0 comes down to innovation, quality and consistency.
the oz. – How many products has Valens now released in total?
Popoff – We’ve manufactured just over 190 different SKUs across nine different product categories within the space. Because we do both white-label manufacturing as well as manufacturing for other LPs, we’ve really been able to focus in and gain experience in a broad spectrum of different categories, which really is what led us to looking at LYF as a great partner for Valens and a great next stepping stone to be able to jump into a vertical we weren’t already playing in.
the oz. – When and how did LYF actually come to Valens’ attention
Popoff – They’re located just down the road from us, so from a geographical perspective, the location made a lot of sense.
We looked at LYF early on as a potential manufacturer for us simply because they had an expertise in novel product creation. They were looking at infusion technologies and different white-label manufacturing very similar to what we do here but focused on the food space.
The thing that made LYF different to us in our eyes versus other edibles manufacturers is that they focused on the broader spectrum of products.
LYF was focused on manufacturing every-day foods that support more of the 3.0 categories, such as desserts, energy bars, fruit, nut and seed mixes, things that were more specialized and more CPG (consumer packaged goods) aligned.
Currently, LYF holds capabilities to produce things such as real fruit gummies, caramel-filled bars, peanut butter cups, candies, granola products — but they’re also looking at the different consumer trends that clients are after, such as plant-based, sugar-free, and natural ingredient offerings.
They’re also looking at raw ingredient or raw processing, which is very important in the market today.
Being able to add our S?RSE Technology, which is water-soluble technology, into those products makes it not only more shelf stable but also tasteless and odourless, which is very important for folks somewhat hesitant getting into cannabis edibles because of potential cannabis taste and smell.
the oz. – How many people are employed by Valens?
Popoff – We are at just over 250, and we’re growing quickly. We expect to have close to 300 employees by the middle of summer.
the oz. – What is Valens doing to position itself for a more global market?
Popoff – We’ve been focusing on the international scene for quite some time. We have received our import and export licences for products in Australia and we’ve also completed our first successful shipment to a partner that we have in Denmark for an R&D initiative.
We are looking to obtain our EU GMP certification in our new K2 facility which is expected in fiscal 2021. We are going to continue to focus on quality and consistency and making sure that we have the necessary proceeds in which to grow.
We recently closed a bought deal financing for total gross proceeds of almost $40 million, with $32 million of those proceeds to be used for M&A and business expansion opportunities in international markets.
the oz. – What is the one change that Health Canada could make to current regulations that would most benefit the industry as a whole?
Popoff – I think there are two changes that would benefit the industry. The first would be increasing the THC limit per pack from the 10 mg allowed today to 100 mg per pack that are commonly found in the US market.
That would be a win-win — not only for ourselves and other manufacturers — but also for consumers because it drives the price down and margins up, allowing for more units or more serving sizes per pack.