An expanded licensing agreement for Canadian cannabis company Valens GroWorks (Valens GroWorks Stock Quote, Chart, News TSX:VGW) gets the thumbs up from AltaCorp Capital analyst David Kideckel, who in a client up date on Thursday said the agreement highlights Valens’ intentions to seize growth opportunities internationally. Kelowna, BC-based Valens, a vertically-integrated cannabis company which has extraction and cannabis science operations, announced on Wednesday an amended manufacturing and sales license agreement with SōRSE Technology Corporation for exclusive use the company’s proprietary emulsion technology in Canada, Europe, Australia and Mexico. “This Agreement shows Valens’ commitment to invest and broaden its IP portfolio and enable its customers to bring differentiated, next generation products to market,” said Jeff Fallows, President of Valens, in a press release. “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,” Fallows added. Valens says the SöRSE technology, which transforms cannabis oil into water-soluble forms, does away with many of the problems attributed to cannabis derivative products by getting rid of the cannabis taste, colour and smell (features said to be off-putting), by maintaining potency when heated, chilled or frozen, by incurring faster onset and offset times for the drug and by enhancing bioavailability and increasing consistency and stability of the product. Kideckel says Valens is now well-positioned to serve the white label clients who may be looking to explore emerging legal cannabis and hemp-derived CBD markets. “The long-term outlook for Valens is mainly dependent on its white-label strategy,” said Kideckel. “Our bull thesis on VGW is based on its emphasis on building out a differentiated product offering and a unique IP portfolio, which we believe will enable it to secure white label contracts. So far, we observe VGW is progressing well in achieving its strategic goals.” The analyst points to other examples of Valens performing according to strategy, such as: in September of this year, Valens entered into a five-year cannabis-infused beverage contract with Iconic Brewing Company, while in November of this year Valens acquired Ontario-based hard cider beverage manufacturer Pommies Cider, with plans to transition Pommies’ facility to producing cannabis-infused beverages and edibles. Kideckel says he has slightly revised his model for VGW based on the transaction details from the expanded agreement with SöRSE but that he has not revised his revenue and profitability estimates just yet due to the lack of visibility on potential international sales, as many of those markets are currently undergoing legal and procedural reforms. Kideckel thinks VGW will generate fiscal 2019 revenue of $57.2 million and adjusted EBITDA of $21.2 million and fiscal 2020 revenue of $181.3 million and adjusted EBITDA of $82.2 million. The analyst has maintained his “Outperform” rating and one-year target price of $10.25 per share, which translated to a projected return of 252 per cent at the time of publication.