Valens GroWorks Corp: $3.20 Pot Stock Up 190% in 2019, Poised to Double Again

Valens GroWorks Corp. $3.20 Pot Stock Could Double Again In 2019
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Valens GroWorks Corp Climbs on Record Results and New Extraction Agreements

Valens GroWorks Corp (OTCMKTS:VGWCF, CNSX:VGW), the largest cannabis extraction company in Canada, has been one of the more interesting marijuana stocks in 2019.

In the first quarter, the company moved into commercial production and increased its annual extraction capacity to roughly 240,000 kilograms (almost 530,000 pounds) of dried cannabis. This helped the fuel the company’s record first-quarter financial results.

In April, Valens GroWorks announced an agreement with HEXO Corp. (NYSEAMERICAN:HEXO). Then on May 28, Valens announced a new extraction agreement with Tantalus Labs, a privately held British Columbia cannabis producer.

The company also recently received organic certification for cannabis oil production, the first third-party cannabis extraction company in Canada to do so.

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As such, VGWCF stock has done well in 2019, and it could still double in value.

Valens GroWorks Corp Overview

Valens GroWorks may not be all that well known to investors, but it’s very familiar to the biggest names in the cannabis industry.

Valens has cannabis-extraction renewable partnerships with HEXO, Canopy Growth Corp (NYSE:CGC), Tilray Inc (NASDAQ:TLRY), OrganiGram Holdings Inc (NASDAQ:OGI), Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF, TSE:TGOD), and Harvest One Cannabis Inc (OTCMKTS:HRVOF, CVE:HVT).

The company also recently entered into a multi-year services agreement to provide cannabis extraction services to Tantalus Labs.

The agreement will run—and therefore impact the share price—for an initial two-year term from the date of the first shipment from Tantalus, which is expected to occur early in the third quarter. (Source: “Valens Signs Multi-Year Cannabis Extraction Agreement with Tantalus Labs,” Valens GroWorks Corp, May 28, 2019.)

Valens GroWorks Stock

VGWCF Stock Information
Market Cap $385.8 Million
Beta 0.74
52-Week High $3.66
52-Week Low $1.04
Shares Outstanding 93.1 Million
Float 59.2 Million
50-Day Moving Average $3.06
200-Day Moving Average $2.49

(Source: “Valens GroWorks Corp. (VGWCF),” Yahoo! Finance, last accessed May 28, 2019.)

Valens has seen its share price trend steadily higher in 2019. On April 30, Valens GroWorks stock hit a new 52-week intra-day high of $3.66 per share—for a year-to-date gain of 232%.

Thanks to some well-deserved, short-term profit taking, VGWCF stock has managed to mostly hold on to those gains and is currently trading up 190% year-to-date at $3.20 per share.

Over the same time frame, the Horizons Marijuana Life Sciences Index ETF (OTCMKTS:HMLSF, TSE:HMMJ) has advanced 43%, the Marijuana Index has advanced 23.5%, and the S&P 500 has advanced 14.3%.

Record First-Quarter Results

On April 24, Valens GroWorks announced that its revenue for the first quarter was a record $2.2 million. In contrast, the company didn’t report any revenue in the first quarter of 2018. (Source: “Valens Reports Record $2.2 Million In Revenue In The First Quarter Of Fiscal 2019,” Valens GroWorks Corp, April 24, 2019.)

Valens ended the first quarter with a strong balance sheet, with almost $20.6 million in cash and short-term investments, as well as net working capital of $26.4 million. The company also raised $43.1 million in gross proceeds.

Analyst Take

The rest of 2019 is expected to be busy for Valens GroWorks Corp as it looks to secure its European Union Good Manufacturing Practices (GMP) certification, as well as launch beverages, edibles, and a vape line.

The company also expects to announce additional multi-year cannabis extraction and product development contracts.

Therefore, the second half of 2019 could be a very profitable period for both the company and for VGWCF stockholders.