Valens GroWorks, a vertically-integrated provider of cannabis products, has acquired Southern Cliff Brands, which is doing business as (DBA) Pommies Cider.

Based in Ontario, Canada, Pommies Cider is engaged in the production of hard cider beverages at its 32,000ft2 facility.

The facility is equipped with industrial-scale fermentation and mixing tanks, canning and bottling lines, labelling equipment and commercial shipping and receiving bay.

Under the agreement, Valens will acquire Pommies Cider and mature micro-processing license applicant for a total consideration of C$7.5m ($5.66m), subject to achieving certain milestones.

Last December, Pommies submitted its Health Canada application for a micro-processing licence.

Valens CEO Tyler Robson said: “We are thrilled to add Pommies to our growing Canadian platform. In Canada, alcoholic beverages generated nearly C$24bn of retail sales in 2018.

“At Valens, we expect that extract-based cannabis products, and infused beverages, in particular, could disrupt beverage alcohol sales where monthly per capita spend is roughly 16 times higher compared to legal cannabis.

“We will be able to leverage our purification and formulation knowledge, as well as the SoRSE emulsion technology to create an exciting new adult beverage category that rivals alcohol, soft drinks and water with our current and future partners.”

The deal is expected to enhance Valens’ geographical footprint in Canada, as well as provide a platform to strengthen its portfolio of white label product in beverage and edibles categories.

Robson added: “Adding the Pommies facility and team to our platform gives Valens the tools and expertise needed to bring competitive beverage alcohol substitutes to market and capitalize on this massive market opportunity.”

Completion of the deal is subject to approval from the TSX Venture Exchange (TSXV).

Upon completion of the deal, the former owners and founders of Pommies, Nick and Lindsay Sutcliffe will join Valens.

Additionally, Valens is planning to establish a co-manufacturing agreement at a partner facility to ensure a continued supply of Pommies hard cider in the market.