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[Sticky] The Valens Company VLNS Stock Forecast & Analysis

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D. H. Taylor
(@dhtaylor)
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Joined: 2 years ago
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The Valens Company VLNS stock is one that I have mixed feeling over.  Before I get into the VLNS stock forecast, I wanted to look at the financials and what the company is doing now.  First, their business model is that they are a white-label manufacturer in Canada.  For those who do not know what white label manufacturing is, it is a company that produces products for other companies.  They do everything from concept, business planning, production of product, and distribution.  This could be lucrative except for one thing: There is no premium products in this.  The company that is having The Valens Company do the work for them gets the premium margins.  This is not to say that The Valens Company could not be profitable in this nor, that it is not one of the best cannabis investments.  But, I have always been a bit suspicious on this.

Given that, Sundial Growers SNDL stock had been acquiring some of VLNS stock over the past few years.  My thoughts were that eventually SNDL would ultimately acquire the entire company and there would be premium involved.  If Sundial Growers were to acquire this company then there would be an interesting additional feature as Sundial owns one of the biggest dispensary systems in Canada and The Valens Company could turn to perspective customers with a solid distribution deal as well as the white label production capabilities.

But, what about The Valens Group entirely on its own without the hope of being acquired?  Would I drop some of my own money into this?

Along with the white label portion of the business, The Valens Company is in the process of acquiring other businesses and will now be in the pre-roll portion of the business from one of its recent acquisitions.  Should the deal with Sundial ownership translate into a strategic deal of distribution into the newly acquired dispensaries, this could push revenues higher.  

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TheQueen
(@gtosali1967)
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Joined: 10 months ago
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I have a lot Valens and right now in a deep hole.

Did you answer this?

But, what about The Valens Group entirely on its own without the hope of being acquired?  Would I drop some of my own money into this?


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D. H. Taylor
(@dhtaylor)
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Joined: 2 years ago
Posts: 940
Topic starter  

@gtosali1967 

I answered the question toward the bottom of the posting.  On its own, The Valens Company will hopefully see some increases in revenue.  It may make things more interesting.  But, they need to triple revenue to justify operating expenses where they currently are.  I'm not certain you will see that kind of revenue growth from the core business any time soon.

That being said, if there is a big surge in cannabis stocks, this is one I would dump.

But, before that happens, if SNDL were to pick it up and grab the whole company, things get a little more interesting.  Sundial Growers has a lot of upside potential and adding this company to its roster improves these opportunities.  

No matter what, the stock will recover at some point.  But, depending upon the future outlook and where they are with things, I would say dump it when we peak.  There are other, more impressive opportunities.  


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