More layoffs at The Valens Company, say sources
Published on February 2, 2022 by David Wylie
The Valens Company says it’s been busy slashing “cost inefficiencies” after a year of making acquisitions, including cannabis producer Citizen Stash.
Well-placed sources tell the oz. there has been a second round of layoffs at the Kelowna-based cannabis company.
Asked for more details about how many people and their locations, the company sent a statement to the oz. from Valens president Jeff Fallows:
“We have net added over 180 people over the last year including the integration initiative. Valens was one of the largest hirers in 2021 in Canada’s cannabis industry and we intend to be in the next five years. Automation is a part of why we believe we will win, and it is what makes us more efficient in hiring in future years.”
• RELATED: Layoffs at Valens; still fast growing, says CEO
On Wednesday, Valens put out a news release announcing it’s making “margin improvement through more efficient operations, reduced operational and organizational costs, and realization of M&A-related synergies.”
Valens’ news release did not specify how many jobs are affected or where they are based. Last year, the company acquired Mission, BC, based LP Citizen Stash, Verse Cannabis, and US-based Green Roads. It also acquired Ontario-based apple cider maker Pommies in 2019.
Company CEO Tyler Robson said in the statement that Valens is “capturing the first wave of synergies” through operational and organizational changes. He says more details will be released during the company’s upcoming investor day.
“I’m proud to say that we have identified $10 million in annual cost efficiencies and expect to identify an additional $10 million in the coming quarters through additional planned initiatives,” he says “Investors can expect to start to see some of the benefits of the first wave of efficiencies in fiscal Q2 2022, with the majority of the impact being realized in the second half of the fiscal year.”
• RELATED: The Valens Company borrows $40M from Ontario lender
The company says it eliminated overlap and shared services across different business segments. It also says it cut products that haven’t been performing well and added further automation to its operations.
Valens president Jeff Fallows hinted at deeper cuts throughout the year with annual savings of $10 million through “right-sizing” and “the realization of further synergies” from its acquisitions.
Incremental to the $20 million of cost efficiencies, efforts to monetize surplus or unnecessary assets and tighter working capital management is anticipated to generate an additional $5 to $10 million in cash over the coming quarters.”
Valens stock dropped to a record low of $2.25 a share in January.
Updated at 9 a.m. with comment from The Valens Company.