Valens Announces $25 Million Bought Deal Financing

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Kelowna, B.C., September 17, 2018 – Valens GroWorks Corp. (CSE: VGW) (the “Company” or “Valens”), a multi-licensed, vertically integrated provider of cannabis products and services utilizing proprietary extraction processes, announces that it has entered into an agreement with AltaCorp Capital Inc., under which AltaCorp Capital Inc. has agreed to purchase, as co-lead underwriter and sole bookrunner, along with Mackie Research Capital Corp. as co-lead underwriter, and including Beacon Securities Ltd. (together with AltaCorp Capital and Mackie Research Capital Corp., the “Underwriters”) on a bought deal basis, 12,820,513 units of the Company (“Units”) at a price of C$1.95 per Unit (the “Offering”), representing aggregate gross proceeds to Valens of approximately C$25 million.

Each Unit entitles the holder to acquire, for no additional consideration, one common share (“Common Share”) of Valens and one-half of one common share purchase warrant (each whole common share purchase warrant a “Warrant”) of Valens. Each full Warrant will entitle the holder thereof to purchase one Common Share of the Company at a price of C$2.54 per Common Share, for a period of 24 months following the Closing Date. In the event that the volume weighted average trading price of the Common Shares for ten consecutive trading days exceeds C$3.81, the Company shall have the right to accelerate the expiry date of the Warrants upon not less than fifteen trading days’ notice.

In addition, Valens has agreed to grant to the Underwriters an option to purchase up to an additional 15% of the Units at a price of C$1.95 per Unit, on the same terms and conditions as the Offering, exercisable at any time, in whole or in part, until the date that is 30 days following the closing of the Offering. If the option is exercised in its entirety, the aggregate gross proceeds of the Offering to Valens will be approximately C$28.75 million.

The Company plans to use the net proceeds from the Offering to increase extraction capacity at the Company’s Kelowna facility, strategically increase the Company’s domestic geographic presence, and for general corporate purposes.

The Common Shares will be offered by way of a short form prospectus to be filed in each of the provinces of Canada, other than the Province of Quebec and by way of a private placement in the United States. The Offering is expected to close on or about October 10, 2018 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the Canadian Securities Exchange (the “Exchange”).

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Valens GroWorks

Valens GroWorks Corp. is a vertically integrated provider of Canadian cannabis products developed from our proprietary extraction techniques, with three wholly-owned subsidiaries located in and around Kelowna, BC. Subsidiary Valens Agritech has initiated cannabis production, processing and sales under a Health Canada Dealer’s Licence, which includes a supply agreement with Canopy Growth Corporation under their extensive CraftGrow distribution network. Subsidiary Supra THC Services is a Health Canada licensed ISO 17025 accredited cannabis testing lab providing sector-leading analytical services and has partnered with Thermo Fisher Scientific to develop a Centre of Excellence in Plant Based Medicine Analytics. Subsidiary Valens Farms is in the process of becoming a purpose-built facility in compliance with European Union (EU) Good Manufacturing Practices (GMP) standards, ensuring the product from this facility can be exported anywhere in the world where Cannabis is nationally legal for medical or adult usage purposes.

For more information, please visit the Valens GroWorks, Valens Agritech and Valens Labs websites.

For further information, please contact:
Scott Young
Telephone: +1.705.888.2756

Notice regarding Forward Looking Statements

This news release contains certain “forward-looking statements” within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as “anticipates”, “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed”, “positioned” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the reasonable opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation is under no obligation, and expressly 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 expressly required by applicable law.

The CSE or other regulatory authority has not reviewed, approved or disapproved the contents of this press release. We seek Safe Harbour.