Canopy Growth (TSX: WEED; NYSE: CGC) just inked a new extraction deal with British Columbia-based Valens GroWorks Corp. (CSE: VGW), a licensed cannabis producer.

The multi-year extraction deal will see Valens processing Canopy Growth’s whole flower cannabis into resin for oils and capsules, with the first shipment of whole flower to take place later this month. New Canopy Growth products processed by Valens are expected to be available in 2019.

This is the second large-scale extraction deal Canopy has negotiated so far in December. Earlier this month, the company signed an 18-month supply deal to purchase cannabis extract from MediPharm Labs Inc (TSXV: LABS) as well.

Canopy has also been expanding internationally since nationwide Canadian legalization arrived in October, recently acquiring German vaporizer company Storz & Bickel for $165 million.

Canopy Growth Co-Chief Executive Officer Mark Zekulin commented on the newly signed deal with Valens GroWorks:

“Diversifying our extraction supply capabilities with Valens, a company positioning itself as a specialized extractor, increases our ability to supply a consistent, high-quality inventory of oils for products such as Softgels.”

Zekulin added, “We’re also excited to see Valens progress in its licensing capabilities so that it can add its products to our CraftGrow program, increasing the diversity of high-quality cannabis products available for medical and recreational customers in 2019.”

This is also the second extraction supply deal for Valens GroWorks in recent months, as the company additionally signed a multi-year contract with Harvest One (TSXV: HVT) last month. Under the terms of that deal, Harvest One will ship dried cannabis for processing to Valens through subsidiary United Greeneries.

Valens GroWorks Chief Executive Officer Tyler Robson had this to say about the new extraction agreements:

We are pleased to provide specialized extraction services to support Canopy Growth’s innovative product offerings, while also capitalizing on our CraftGrow partnership to bring Valens branded products to market in the new year. We take pride in our proprietary extraction processes and are honoured to be recognized for our capabilities in supporting the growth of the cannabis market, particularly with the increasing role cannabis oils will soon play in the edibles space.