Valens GroWorks Corp. (TSXV: VGW) (OTCQX: VGWCF) has entered a manufacturing and sales license agreement with SōRSE Technology.

The agreement grants Valens an exclusive license to use the SōRSE emulsion technology to produce and sell cannabis-infused products in Canada, Europe, Australia and Mexico.

“As we move into “Cannabis 2.0″ in Canada, we believe the products that offer consistent, high quality and predictable user experiences, like those we are able to create with SōRSE, will capture the lion’s share of attention and be the hallmark for brand development in a strict regulatory environment. With this expanded agreement in place, we have extended this opportunity for our existing customers to key international markets and at the same time established a platform for international consumer brands to add high quality, cannabis-infused products to their portfolios,” Valens President Jeff Fallows stated.

SōRSE Technology

The SōRSE emulsion technology transforms cannabis oil into water-soluble forms for use in beverages, edibles, topicals, and other consumer products without the burden of cannabis taste, color or smell. The technology allows these cannabis-infused products to maintain potency when heated, chilled or frozen.

The key advantages of the technology include a faster-observed onset time compared to other infused beverages and edibles; a significant reduction of offset time; an ability to use lower doses of cannabinoids due to the enhanced bioavailability provided by the technology; and increased consistency and stability with some product formulations achieving more than one-year shelf stability with no evidence of separation.

Expansion to New Markets

The agreement grants Valens an exclusive license to use the technology in Canada, Europe, Australia and Mexico – except in respect of medical applications requiring clinical trials – during the initial five-year term, subject to certain performance milestones. This increases the addressable market from 37 million in the current Canada only agreement to 700 million people in the new agreement, an increase of almost 20x.

Furthermore, the agreement provides a framework for Valens to obtain rights to establish non-exclusive agreements to sell cannabis-infused products using the technology in the U.S. market and other markets, globally.

As part of the agreement, Valens will transfer to SōRSE royalty payments calculated as a percentage of sales and the royalty payments will be subject to an annual minimum of $2 million over the five-year term.