SNDL, a private sector liquor and cannabis retailer, has entered into an agreement to acquire The Valens Company – a manufacturer of cannabis products – for a total consideration of CAD 138 million.

Through the acquisition, SNDl and Valens will combine business to form a vertically integrated cannabis platform.

A company statement said: “With 555,500 square feet of cultivation and manufacturing space and 185 cannabis stores under the Spiritleaf and Value Buds banners, the combined company will offer a complete portfolio of branded products to consumers in Canada through its own supply and distribution channels.”

The combined company will operate as SNDL. Both companies hope to create a diverse portfolio of brands through the combination (including edibles and drinkables), enhance branded product offering with low-cost in-house manufacturing capabilities and create synergies through cost rationalisation and operational efficiencies.

Zach George, CEO of SNDL, said: “This powerful combination will result in the creation of a dominant vertically integrated company, exceptionally well-suited to weather the current cannabis environment and become a leader in the Canadian regulated products sector.”

He added: “SNDL’s existing consumer packaged cannabis business will be transformed by Valens’ high-quality extraction, processing, and manufacturing capabilities and aligns well with our strategic vision to delight consumers with a full range of quality cannabis products and experiences. Our companies have been commercial partners since Canadian legalisation. I am excited by the strong cultural fit between our teams and humbled by the opportunity to work with Valens’ passionate and innovative leadership.”

Tyler Robson, CEO of Valens, commented: “We are thrilled to bring together two best-in-class cannabis companies that have extremely complementary assets to create a true market leader. Valens is one of the fastest growing branded cannabis companies in Canada with a focus on innovation and investing in low-cost automated manufacturing assets.”

He continued: “With SNDL’s exceptional balance sheet and largest cannabis retail network in Canada we look forward to taking Valens’ brands to new heights and unlocking 2.0 products for the SNDL platform. We believe the pro forma company provides investors with attractive exposure not only to the highest revenue generating cannabis company in Canada trading well under its tangible book value but also a dominant platform that can become a global leader in cannabis.”