The Valens Company to acquire craft cannabis LP Citizen Stash

Published on August 31, 2021 by David Wylie

citizen stash product
Photo: Citizen Stash

The Valens Company is buying cannabis licensed producer Citizen Stash for $54.3 million in a stock deal.

Kelowna-based Valens says the deal catapults the company into the high-margin premium flower category, as Citizen Stash is the No. 1 flower brand by market share with an average retail price more than $13 a gram.

“The premium price tier of the flower and pre-roll segments represents the best expansion opportunity for Valens in the flower category, as premium brands are the hardest to build, while also capturing the highest margins,” says Valens chairman and CEO Tyler Robson.

The deal melds cannabis 2.0-focused Valens, well-known known for its extraction products, with Citizen Stash’s portfolio of craft growers and proprietary genetics.

No big grow operations

Citizen Stash has an asset-light model that Valens says aligns with its own philosophy of operational flexibility and financial discipline. Based in Mission, BC, Citizen Stash uses a craft contract growing model, which allows them flexibility with strains and the ability to avoid the challenges large grow facilities.

“In short, this strategic acquisition will allow Valens to significantly expand its presence in the recreational market and capture a share of the largest categories of the Canadian cannabis space without the burden of a high-cost growing infrastructure.”

Citizen Stash’s brand portfolio adds more than 40 listings to Valens’ growing house of brands across seven provinces— which will bringing the company to more than 220 provincial listings as of August 2021.

Flower is worth $2.7 billion

The flower-based market is worth about $2.7 billion. Flower and pre-rolls, the largest segments of the Canadian cannabis market currently accounting for over 70% of retail sales.

Citizen Stash CEO Jarrett Malnarich says the deal is wholeheartedly endorsed by the company’s board of directors.

“In our collaboration with Valens to date, Citizen Stash has come to realize the common values we share centered around providing consumers with the highest quality cannabis products,” says Malnarich.

“We anticipate that the future of our combined company will be filled with product innovation fueled by our shared entrepreneurial vision and mission to provide outstanding consumer experiences in both domestic and global markets. We look forward to the support of our shareholders in completing this transaction and the full integration of our two businesses.”

Closing the deal will mark the third acquisition Valens has made this year, including LYF edibles and Green Roads.

Read the full details in the news release.