Partnership will bring first GMP manufactured products to be sold through Valens in both

Australia

and

New Zealand

Access to Epsilon’s GMP facility in

Australia

to provide Valens with future access to global markets including

Latin America

,

Europe

, UK and

Asia-Pacific

KELOWNA, BC

,

Sept. 8, 2021

/PRNewswire/ –

The Valens Company Inc.

(TSX: VLNS) (OTCQX: VLNCF) (the ”

Company

,” ”

The


Valens


Company

” or ”

Valens

“), a leading manufacturer of cannabis products, today announced an exclusive partnership with Epsilon Healthcare Limited (ASX:EPN) (Epsilon), a diversified global healthcare and pharmaceuticals company, for access to Epsilon’s Good Manufacturing Practices (GMP) facility in

Australia

for manufacturing products, furthering its international expansion to GMP markets in

Latin America

,

Europe

, UK and the

Asia-Pacific

regions. Products will be distributed through Valens’ Australian Distribution Partner, Cannvalate PTY Ltd (“Cannvalate”), and will be the largest quantity of products provided to Cannvalate for distribution to date (collectively, the ”

Transaction

“). The partnership is reflected in the terms of the Binding Heads of Agreement between the Epsilon, THC Pharma (the Epsilon’s wholly owned subsidiary, and owner of the Southport Facility), Valens, and Valens Australia Pty Ltd (Valens’ wholly owned subsidiary) (the ”

Agreement

“).

With this partnership The Valens Company continues its “revenue first, capital efficient” strategy of expanding internationally. As part of the Agreement with Epsilon and Cannvalate, Valens will be provided with access to Epsilon’s GMP manufacturing capabilities at the Southport Facility (as defined below) located in

Queensland, Australia

, the largest cannabis manufacturing facility in the Southern Hemisphere, and the largest at domestic scale with complimentary Therapeutic Good Administration (TGA) and EU GMP capabilities. The partnership also marks the first GMP manufactured products to be sold through Valens in Australia, and provides Valens with the capability to deliver GMP-grade products to

Latin America

,

Europe

, UK and

Asia-Pacific

.

Key Transaction Details:

• The Valens Company, a leading Canadian manufacturer of cannabis products, has entered into a long-term partnership with Epsilon, for exclusive access to the Epsilon’s GMP Manufacturing Facility in
  
  Southport
  
  ,
  
  Queensland Australia
  
  (the ”
  
  Southport Facility
  
  ‘)
• Epsilon’s Southport Facility is the largest cannabis extraction facility in the Southern Hemisphere with TGA and EU GMP capability
• Valens to fund all operational and capital expenditure of the Southport Facility in return for preferential access for up to 85 percent of the operational capacity of the Southport Facility over the next five years, with an option to extend this arrangement for an additional six years
• Valens to provide operational and management consultancy at the Southport Facility to bring their industry-leading intellectual property, technology, and team to the Southport Facility to take advantage of Epsilon’s GMP Manufacturing capability
• Marks first foray into EU GMP medicine production for Valens
• The Agreement compliments its existing partnership with Cannvalate opening up GMP manufactured products to be sold through Cannvalate’s distribution network First products manufactured under strategic alliance expected to be delivered in the coming weeks

Epsilon’s wholly owned subsidiary, THC Pharma Pty Ltd (THC Pharma) operates a TGA and Office of Drug Control (ODC) licensed medicinal cannabis manufacturing facility with TGA and EU GMP capabilities in

Southport

,

Queensland Australia

. THC Pharma’s GMP Southport facility is a 10,000 square foot purpose-built botanicals extraction facility capable of extraction of raw plant material and downstream purification and isolation processing. The facility consists of its own QC lab and grade D cleanroom space for the manufacture of oral dose format products. Epsilon also owns a number of medicinal cannabis assets, including the Tetra Health clinic, and the Medimar Platform – an end-to-end ecommerce solution for nutraceuticals and cannabis. Epsilon also operates a turn-key cannabis cultivation solutions provider based in

Vancouver, Canada

.

“With this partnership we have fulfilled our promise to achieve GMP manufacturing in 2021 and we have gained access to international cannabis markets through the ‘Valens way,’ utilizing an asset-light approach that allows us to export to GMP markets globally. We are excited to work with the largest and most advanced cannabis manufacturing facility in the Southern Hemisphere to distribute GMP products, and look forward to advancing our product distribution capabilities through our continued partnership with Cannvalate. We believe this strategic partnership is an efficient use of capital towards accessing GMP quality products and accelerates our timeline to market dramatically,”  said

Tyler Robson

, Chief Executive Officer and Chair of The Valens Company. “With the rapid unit volume growth coming out of our K2 facility that was built to GMP standards, we believe this agreement offers us the best of both worlds – access to GMP manufacturing without giving up on domestic revenue growth opportunities.”

Jarrod White

, Chief Executive Officer of Epsilon noted, “This year alone, Valens has grown exponentially not only across provinces and territories in

Canada

, but in the US as well, which is an excellent platform for the growth we see forthcoming in the international Medicinal Cannabis market generally. Epsilon’s partnership with Valens as a leading manufacturer of cannabis products is complementary to our facility, being the largest TGA and EU GMP facility in the Southern Hemisphere. We are excited to be working with Valens during such a flourishing time in their corporate trajectory. Valens also shows a promising production throughput to scale up our GMP manufacturing capability. We look forward to furthering our partnership with Valens in the coming months as we accelerate the commercial production output from Epsilon’s wholly owned facility.”

Dr.

Sud Agarwal

, Chief Executive Officer of Cannvalate added, “Having worked closely with Valens for over a year, we have already noticed significant growth in their market share in the APAC market. Now, with access to a GMP facility via our partnership with Epsilon, we forecast a dramatic increase in demand both domestically and internationally. With

New Zealand

moving to a pureplay GMP market in

October 2021

and the Australian Government indicating they will too in the very near future, we see this opportunity as building a significant competitive advantage for the Valens-Cannvalate partnership.”

This initial production run is the first milestone of Valens’ partnership with Epsilon. Valens anticipates that the partnership will see further expansion as it receives additional orders for GMP product globally.

Further details concerning the Transaction as set forth in Schedule 1 below.

At Valens, it’s Personal.

About The Valens Company


The Valens Company is a leading manufacturer of cannabis products with a mission to bring the benefits of cannabis to the world. The Company provides proprietary cannabis processing services, in addition to best-in-class product development, manufacturing, and commercialization of cannabis consumer packaged goods. The Valens Company’s high-quality products are formulated for the medical, health and wellness, and recreational consumer segments, and are offered across all cannabis product categories with a focus on quality and innovation. The Company also manufactures, distributes, and sells a wide range of CBD products in

the United States

through its subsidiary Green Roads, and distributes medicinal cannabis products to

Australia

through its subsidiary Valens Australia. In partnership with brand houses, consumer packaged goods companies and licensed cannabis producers around the globe, the Company continues to grow its diverse product portfolio in alignment with evolving cannabis consumer preferences in key markets. Through

Valens Labs

, the Company is setting the standard in cannabis testing and research and development with

Canada’s

only ISO17025 accredited analytical services lab, named The Centre of Excellence in Plant-Based Science by partner and scientific world leader Thermo Fisher Scientific. Discover more on The Valens Company and its subsidiaries at

http://www.thevalenscompany.com.

About Epsilon Healthcare Limited


Epsilon Healthcare (ASX:EPN) is an ASX listed diversified global healthcare and pharmaceuticals company. EPN owns a number of medicinal cannabis assets including the largest GMP cannabis manufacturing facility in the Southern Hemisphere, the Tetra Health clinic, and the Medimar Platform. EPN’s manufacturing facility is a fully licensed and permitted Australian TGA and EU GMP bio-floral extraction facility with a range of approved GMP licensed products and formulations. EPN’s facility is capable of product development, manufacturing, and commercialization of cannabis consumer packaged goods in addition to the manufacture of products and formulations for use in clinical trials to a TGA and EU GMP standard. EPN additionally operates a turn-key cannabis cultivation solutions provider based in

Vancouver, Canada

.

About Cannvalate


Cannvalate is

Australia’s

largest business-to-business services company supporting both domestic and international Medicinal Cannabis companies fast track their growth into the Australian market. Their two key services include:

• ACMA (Australian Cannabis Market Access) –
  
  Australia’s
  
  largest network of medicinal cannabis prescribing clinics, consisting of more than 2,400 referring physicians and 600 affiliated pharmacies spanning all states of
  
  Australia
  
  . Cannvalate prescriptions currently account for almost 50% of the Australian market, which is now the fastest growing pure-play medical market in the world.
• Medicinal Cannabis Research Collaboration (MCRC) – The world’s only cannabis-specialised, Clinical Research Organisation (CRO) providing best-in-class, cost-effective, clinical and preclinical research. The MCRC provides end-to-end, novel cannabinoid drug discovery in conjunction with a talented, commercially-orientated, scientific team, capable of performing preclinical, phase 1, phase 2 and phase 3 trials.

Schedule 1

The material terms of the Binding Heads of Agreement between the Epsilon, THC Pharma (the Epsilon’s wholly owned subsidiary, and owner of the Southport Facility), Valens, and Valens Australia Pty Ltd (Valens’ wholly owned subsidiary) (Valens AU) are provided below:

There can however be no assurance that the Definitive Agreement will be entered into.

Notice regarding Forward Looking Statements

All information included in this press release, including any information as to the future financial or operating performance and other statements of The Valens Company that express management’s expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing information about management’s current expectations and plans relating to the future. Wherever possible, words such as “plans”, “expects”, “scheduled”, “trends”, “forecasts”, “future”, “indications”, “potential”, “estimates”, “predicts”, “anticipate”, “to establish”, “believe”, “intend”, “ability to”, or statements that certain actions, events or results “may”, “should”, “could”, “would”, “might”, “will”, or are “likely” to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information. Specific forward-looking statements include, without limitation, all disclosure regarding future results of operations, future outcomes of transactions, economic conditions, and anticipated courses of action. Investors and other parties are advised that there is not necessarily any correlation between the number of SKUs manufactured and shipped and revenue and profit, and undue reliance should not be placed on such information.

The risks and uncertainties that may affect forward-looking statements include, among others, , Canadian regulatory risk, Australian regulatory risk, U.S. regulatory risk, U.S. border crossing and travel bans, the uncertainties, effects of and responses to the COVID-19 pandemic, reliance on licenses, expansion of facilities, competition, dependence on supply of cannabis and reliance on other key inputs, dependence on senior management and key personnel, general business risk and liability, regulation of the cannabis industry, change in laws, regulations and guidelines, compliance with laws, limited operating history, vulnerability to rising energy costs, unfavourable publicity or consumer perception, product liability, risks related to intellectual property, product recalls, difficulties with forecasts, management of growth and litigation, many of which are beyond the control of The Valens Company. For a more comprehensive discussion of the risks faced by The Valens Company, and which may cause the actual financial results, performance or achievements of The Valens Company to be materially different from estimated future results, performance or achievements expressed or implied by forward-looking information or forward-looking statements, please refer to The Valens Company’s latest Annual Information Form filed with Canadian securities regulatory authorities at

www.sedar.com

or on The Valens Company’s website at

www.thevalenscompany.com.

The risks described in such Annual Information Form are hereby incorporated by reference herein. Although the forward-looking statements contained herein reflect management’s current beliefs and reasonable assumptions based upon information available to management as of the date hereof, The Valens Company cannot be certain that actual results will be consistent with such forward-looking information. The Valens Company cautions you not to place undue reliance upon any such forward-looking statements. The Valens Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Nothing herein should be construed as either an offer to sell or a solicitation to buy or sell securities of The Valens Company.

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SOURCE The Valens Company Inc.