Valens said it intends to use the funds to expand the company's domestic geographic presence, increase production capacity and white label offerings and for general corporate purposes

Valens GroWorks Corporation ( ) announced promising news Tuesday of a C$30 million bought deal financing.

The Kelowna-based cannabis company said it plans to use the funds to strategically increase its domestic geographic presence, increase production capacity and white label offerings and for general corporate purposes.

AltaCorp Capital Inc has agreed to purchase, as sole bookrunner and lead underwriter, along with a syndicate of underwriters, more than 10.17 million units at C$2.95 a pop to raise C$30 million.

Other underwriters include GMP Securities, Raymond James, Haywood Securities and Mackie Research Capital.

The underwriters will have the the option to purchase up to a further 1.5 million units at the issue price for 30 days following closing, which is expected to close on April 9.

Valens expands its footprint next door

Valens also announced it had entered into an agreement to purchase an adjoining property, with an aim to increase its extraction production space, product development and to allow for additional white-labelling service capacity to current and future clients. The firm said the 18,0000 sq/ft facility will also provide additional office space for its corporate team.

"We are excited for the opportunity to purchase the facility next door as part of our growth plan to increase capacity and overall product offerings for our world-class clients," said CEO Tyler Robson in a release. "Congruent with our expansion plans stated in the previous fiscal year, this is an imperative step to our ultimate goal of being able to service not only the Canadian market, but the global market from premium toll processing all the way to premium finished goods."

Acquisition of existing processing facility

Additionally, the firm said its existing processing facility is anticipated to be acquired from NorthOk Properties Inc., a company controlled by Ashley McGrath, a company director C$4.4 million on or about March 20, 2019. Valens engaged an independent appraiser to complete a market valuation, which supports the purchase price.

"Securing ownership of our processing facility here in Kelowna, in which we have invested over $4.6 million in leasehold improvements built out to European Good Manufacturing Practice standards, will ensure the company can continue to successfully execute on its core business objectives," said Robson. "In addition, the undeveloped footprint of this 1.94 acre site will allow the company to further expand to meet the growing demand for the Company's leading extraction services and product development expertise."

Valens is a multi-licensed provider of cannabis products and its services are focused on various proprietary extraction methodologies, distillation, cannabinoid isolation and purification, as well as associated quality testing. Valens has extraction processing and supply agreements with a number of leading producers across Canada.

Valens shares were halted Tuesday afternoon but will resume trading on Wednesday morning.

Contact Katie Lewis at [email protected]