Is the Valens Groworks Corp (OTCMKTS:VGWCF) Pullback a Gift for New Longs?

Is the Valens Groworks Corp (OTCMKTS:VGWCF) Pullback a Gift for New Longs?

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It’s finally pullback time in one of the strongest trends in the OTC space so far in 2019, Valens Groworks Corp (OTCMKTS:VGWCF). Shares of the stock have cut back into recent gains to the tune of about 22% over the past 4 days. This comes on the heels of a 70% run higher since early last month. To make matters even more interesting, the company just announced it is the first third-party cannabis extraction company in Canada to receive organic certification for cannabis oil production from Pro-Cert Organic Systems Ltd. for its proprietary CO2 and ethanol extraction processing methods in accordance with the Canadian Organic Standards.

According to the release, “the certification gives Valens the ability to produce certified organic cannabis oil from hemp and cannabis biomass that is organically cultivated and certified. Valens will now be able to immediately begin offering certified organic cannabis oil processing to The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) from their certified organic cannabis and hemp under the multi-year extraction agreement announced March 11th, 2019.”

Valens Groworks Corp (OTCMKTS:VGWCF) promulgates itself as a biotechnology company that engages in the scientific research of phytopharmaceutical material primarily producing cannabis and cannabis related products.

It is also involved in the analytical laboratory testing of cannabis. The company has collaborative research partnerships with UBC Okanagan and Thompson Rivers University.

Valens Groworks Corp. is headquartered in Kelowna, Canada.

Moreover, this is a research-driven Canadian cannabis company focused on downstream secondary extraction methodology, distillation and cannabinoid isolation and purification, as well as associated quality testing with three wholly-owned subsidiaries located in and around Kelowna, BC.

Subsidiary Valens Agritech holds a license to cultivate cannabis and produce cannabis oil under the Cannabis Act, as well as a license to conduct analytical testing for the cannabis industry. VAL currently has extraction processing and supply agreements with various leading producers across Canada. Subsidiary Valens Labs is a Health Canada licensed ISO 17025 accredited cannabis testing lab providing sector-leading analytical services and has partnered with Thermo Fisher Scientific to develop a Centre of Excellence in Plant Based Science.

Subsidiary Valens Farms is in the process of becoming a purpose-built facility in compliance with European Union (EU) Good Manufacturing Practices (GMP) standards, ensuring the product from this facility can be exported anywhere in the world where Cannabis is nationally legal for medical or adult usage purposes.

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As noted above, VGWCF just announced it is the first third party cannabis extraction company in Canada to receive organic certification for cannabis oil production from Pro-Cert Organic Systems Ltd. for its proprietary CO2 and ethanol extraction processing methods in accordance with the Canadian Organic Standards.

We’ve witnessed 37% tacked on to share pricing for the company in the past month. In addition, the company has witnessed a pop in interest, as transaction volume levels have recently pushed a bit over 330% over what the stock has registered over the longer term.

“We expect to see increased demand for organic cannabis and hemp products in the future,” says Tyler Robson, CEO of Valens GroWorks. “With certified organic processes in place, Valens is now in a position to work with these cultivators to bring certified organic cannabis oil-based products to market, an achievement which demonstrates our commitment to supporting our current and future clients’ needs.”

Earning a current market cap value of $338.86M, VGWCF has a significant war chest ($20.6M) of cash on the books, which must be weighed relative to about $1.3M in total current liabilities. One should also note that debt has been growing over recent quarters. VGWCF is pulling in trailing 12-month revenues of $2.2M. However, the company is seeing recent declines on the top-line on a sequential quarterly basis, with revenues falling at 0% as of its latest reporting period. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $VGWCF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $VGWCF, either long or short, and we have not been compensated for this article.

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