Village Farms Archives - Green Market Report

Debra BorchardtAugust 9, 2022


Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF)  announced its financial results for the second quarter ended June 30, 2022. Total consolidated sales increased 18% year-over-year to $82.9 million from $70.4 million. This beat the Yahoo Finance average analyst estimate for revenues of $70 million. 

Village Farms reported a consolidated net loss of $36.6 million or ($0.41) per share, which included $29.8 million of impairments to Balanced Health Botanicals’ goodwill and intangible assets, compared with ($4.5 million), or ($0.06) per share. The consolidated adjusted EBITDA was negative ($10.3 million) compared with a positive adjusted EBITDA of $1.5 million.

“The continued successful execution of our differentiated Canadian Cannabis strategy drove strong year-over-year and sequential sales growth, achieving a new record high for the second quarter, as well as our 15th consecutive quarter of positive EBITDA for that business,” said Michael DeGiglio, Chief Executive Officer, Village Farms. “Our Pure Sunfarms brand maintained its number one market share position in dried flower in Canada, while Rose LifeScience became a top-three licensed producer in Quebec, with an 8.5% market share**, in part driven by its Promenade brand in collaboration with Pure Sunfarms. Importantly, our planned investments in our commercial capabilities, including sales support and marketing, strain development and other innovation, new brands and geographical expansion over the past 18 months to drive both near- and long-term growth are beginning to yield their intended results. We are also seeing the benefits of the evolution of our strategy for non-branded, with larger, more regular sales to a smaller number of repeat customers, which has been complemented by steady growth in exports, having recently completed our sixth shipment to Australia.”

Revenues for Canadian cannabis were $29 million, while revenues for U.S. cannabis were $5.7 million. Total cannabis segment net sales increased 44% year-over-year to $35.6 million, representing 43% of total Village Farms sales


Produce continues to deliver sizable revenue for Village Farms. Sales increased 4% to $47.2 million (more than cannabis) and adjusted EBITDA was negative ($10.3 million), compared with ($4.0 million), with the magnitude of the adjusted EBITDA loss being due primarily to the impact of inflation on costs. Village Farms said it had initiated an intensive operational review of the Fresh Produce business with the goal of optimizing the profitability of the business.
“In our Village Farms Fresh produce business, as anticipated we continued to be challenged by cost inflation across our operations, with significant year-over-year increases in most categories, including fertilizer and other inputs, packaging, freight, and labor costs, which has been exacerbated by the continued impact of the Brown Rugose virus that has impacted the global tomato industry. To date, we have not been able to pass these cost increases on to customers due to the continued oversupply in each of the tomato, cucumber and pepper markets. With the goal of optimizing profitability for Village Farms Fresh, we have initiated an intensive operational review of our operations. We believe strongly in the potential of these operations, especially for their optionality and considerably greater value as part of our cannabis strategy in a national or Texas state legal cannabis market in which we can participate.”


Village Farms said it couldn’t give an estimate for upcoming earnings and blamed COVID as the reason.

“We continue to expect the second half of 2022 to trend favorably for our Canadian Cannabis business, as we launch new SKUs, including new strains, across our brands into a market that continues to exhibit robust growth. In addition, the rollout of the Original Fraser Valley Weed Co. brand will enable us to address a considerable portion of the Canadian market that we previously did not. We also expect to increasingly benefit from integrating Pure Sunfarms and Rose to realize the significant synergistic opportunities that can take Village Farms’ Canadian Cannabis business to the next level.”

StaffMay 10, 2022


Village Farms International, Inc.  (NASDAQ: VFF) (TSX: VFF)  announced its financial results for the first quarter ended March 31, 2022, as revenue rose 32% to $32 million over last year’s $24 million for the same time period. the company also delivered a net income of $1 million versus last year’s net loss of $2.8 million.

Village Farms said on a consolidated basis sales increased 34% year-over-year to $70.2 million from $52.4 million and the consolidated net loss was ($6.5 million), or ($0.07) per share, compared with ($7.4 million), or ($0.10) per share. The revenues were in line with Yahoo Finance’s average analyst estimate for sales of $70.2 million.

“The first quarter of 2022 once again demonstrated the strength and earnings power of both our Canadian and U.S. Cannabis businesses,” said Michael DeGiglio, Chief Executive Officer, Village Farms International. “In what is a typically soft season for retail sales in Canada, both Pure Sunfarms and Rose gained share in their respective focus markets and delivered a 14th consecutive quarter of positive adjusted EBITDA for Canadian Cannabis. Pure Sunfarms’ products continue to resonate with consumers, as our continued focus on quality, innovation and new product launches strengthen what has become one of the most respected and trusted brands in the Canadian market. In Quebec, we estimate that Rose is now a top three Licensed Producer by sales following strong market share gains since retail launch early last year. Rose is well-positioned to continue this momentum throughout 2022, further benefitting from the many opportunities for collaboration with Pure Sunfarms. With our Canadian Cannabis business continuing to grow sales and market share domestically, we look forward to capitalizing on Pure Sunfarms’ recent EU GMP certification to commence exportation to international markets.”

Produce Wilts

Despite cannabis sales turning in a solid performance, Village Farms noted that the net loss was primarily due to inflationary pressures on the produce business. Sales increased 19% to $41.4 million but the adjusted EBITDA was negative.

“As our Cannabis operations continued to deliver strong growth and profitability, Village Farms Fresh (Produce) faced one of the most difficult macro environments in its history. Strong revenue growth was more than offset by the inflationary impact of freight, labor, fertilizer, packaging and other cost increases. An industry-wide supply imbalance limited the producer’s ability to pass along pricing to customers. We are evaluating new initiatives, including marketing partnerships to build more scale, spread costs and diversify product offerings. However, even in the currently negative EBITDA environment, we maintain the highest conviction that our U.S. cultivation footprint is a powerhouse opportunity for legal recreational cannabis when we can participate.”

Mr. DeGiglio concluded, “Consumer takeaway trends during the first quarter further validated our brand and cultivation strategies. We expect continued momentum throughout 2022 and beyond as each of our cannabis businesses continues to launch innovative new products that address evolving consumer demand. We remain focused on seizing opportunities to continue to deliver top-tier profitability and market share in the high-growth global cannabis market.”

Debra BorchardtSeptember 28, 2021


Village Farms International, Inc.  (NASDAQ:VFF) (TSX:VFF) has entered into an option agreement to buy an 80% ownership interest in Netherlands-based Leli Holland B.V. for EUR50,000. Leli is one of the ten applicants selected by lottery to receive a license to legally cultivate and distribute cannabis to retailers (known as “coffee shops”) when the Dutch government implements its Experiment to Investigate Closed Cannabis Supply Chains, also known by the Dutch acronym “WECG”). The Dutch Supply Chain Experiment, which is scheduled to operate for a minimum of four years with the potential for national expansions, is expected to be the first legal recreational cannabis market in Europe.

“We view the Dutch Supply Chain Experiment as a critical step toward the broad legalization of recreational cannabis in Europe, and our majority ownership of Leli as both an opportunity to participate in the first recreational market in Europe and a springboard to becoming a major participant in a broader recreational market in Europe,” said Michael DeGiglio, CEO Village Farms. “The founders at Leli share our passion for the cannabis plant, our belief in the role of cannabis in health and wellness, our commitment to sustainable growing practices and the advantage of true vertically integrated operations.”

Village Farms noted that under current Netherlands law, the sale and use of cannabis for recreational purposes are tolerated, however, production and distribution are strictly prohibited, a policy that is believed to negatively impact public order, safety, and public health. The company said in a statement that the Dutch Supply Chain Experiment is intended to determine whether and how controlled cannabis can be legally supplied to coffee shops to address the lack of quality standards and societal impact of cannabis-related crime. It is scheduled to be in effect for at least four years. All coffee shops in the 10 selected cities (currently approximately 80 coffee shops in total) will be legally required to purchase all of their cannabis exclusively from the approved, federally licensed producers.

Leli and Village Farms plan to construct two indoor Controlled Environment Agriculture (CEA) production facilities, leveraging Leli’s track record managing complex regulatory and approval procedures in the Netherlands at both the federal and local levels, as well as specific cultivation experience, and Village Farms’ three-plus decades as a vertically integrated CEA grower, as well as its extensive experience in cultivation, product development and commercialization in the Canadian legal recreational cannabis market. Village Farms said it will be responsible for the development of the project and product commercialization throughout the fully vertically integrated business model, including design and construction of the facilities, operation of the facilities (providing cultivation and harvesting expertise and drying technology), product development and strategy, branding and marketing, leveraging the experience gained in each of these areas through the success of its wholly-owned subsidiary, Pure Sunfarms, in Canada.

Mr. DeGiglio concluded, “Building on the successes of Pure Sunfarms in Canada, we look forward to leading the market in another legal, regulated recreational cannabis market, with an existing, large consumer base, in what we hope becomes a national and permanent policy. Europe, more broadly, represents a significant long-term opportunity in cannabis. We will prudently pursue selected markets, led by our recently appointed Vice President, European Business Development and Operations, Orville Bovenschen, who, himself, was born and raised in the Netherlands.”

The option agreement provides for Village Farms to acquire 80% of Leli’s shares for a total of EUR3,950,000 million, of which EUR950,000 is due and payable to Leli’s shareholders upon the exercise of the Option and the remainder due and payable in three installments subject to achievement of certain project development milestones. The option is exercisable at the sole discretion of Village Farms.

Debra BorchardtAugust 16, 2021


Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF) is buying Colorado-based CBD-platform Balanced Health Botanicals (BHB) in a deal valued at $75 million. Balanced Health owns and operates one of the largest brands in the hemp-derived cannabidiol (CBD) market in the United States, providing Village Farms with immediate entry into the US CBD market in a consumer products category adjacent to the high-THC cannabis market, as well as the broader consumer packaged goods (CPG) wellness arena. Balanced Health is a profitable business and the acquisition is expected to be immediately accretive to net income.

“Since US federal legalization in late 2018, hemp-derived CBD products, as well as other cannabidiol-based products, have been part of our comprehensive strategy focused on high-value, high-growth plant-based consumer packaged goods opportunities in cannabis,” said Michael DeGiglio, CEO, Village Farms International. “As a well-established, profitable leader in the US retail CBD market, Balanced Health is the right opportunity, at the right time, to take our next major step forward in anticipation of regulatory clarity that will propel the growth of this nascent market. Balanced Health provides a prudent means by which to invest in our cannabis strategy, providing immediate accretion to profitability, meaningful upside potential within the current Balanced Health business and multiple additional strategic opportunities to drive significant additional shareholder value over the medium and long term.”

The flagship brand for BHB, CBDistillery was founded in Denver in 2016 and has since evolved into one of the largest CBD brands in the market, sold in retailers nationwide. The all-new BOTA is a line of premium plant-powered skincare and supplements that combines powerful natural botanicals with hemp-derived CBD. BHB develops and sells high-quality, CBD-based health and wellness products. With an overriding focus on quality and compliance, Balanced Health has established a diverse portfolio of CBD and other cannabinoid products, including ingestible, edible and topical applications that are distributed via e-commerce and brick and mortar retail channels. Its e-commerce platform, CBDistillery (, is a top-five US CBD brand and top-ranked website within the CBD category, with more than 30,000 orders monthly and a significant repeat customer base according to Brightfield Group.

He added, “Importantly, the addition of the Balanced Health platform provides us with another potential pathway to participate in the US high-THC cannabis market, when permitted to do so, that could enable us to more rapidly access the market, in advance of our plans to convert our more than 5.5 million square feet of high-tech greenhouse facilities in West Texas – one of the most favorable environments for cannabis cultivation in the continental US – for large-scale, low-cost production of cannabis.”

The deal consists of $30 million in cash and $45 million in common shares of the company. It is expected to contribute annualized sales of more than $30 million at an annualized adjusted EBITDA margin of in excess of 15% in 2022. While  Balanced Health is only CBD at this time, Village Farms also noted that the deal provides an additional potential pathway to the US high-THC cannabis market;

“We are ecstatic to join forces with Village Farms, a leader in the global cannabis and CBD industries,” said Chase Terwilliger, Chief Executive Officer of Balanced Health Botanicals. “Since 2016, our nimble team has worked tirelessly to create not only a leading brand of which we are extremely proud but also one that is truly making an impact in the lives of consumers by providing everyday premium products. We’ve been able to achieve and maintain a top-five market share in the CBD market, while generating positive cash flow. As part of the Village Farms organization, we will be able to take the next steps in our growth strategy, with the opportunity for prudent, return-focused investments, to further expand our market share and drive efficiencies, with a focus on continued profitability.”



StaffAugust 9, 2021


Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF) announced its financial results for the second quarter ended June 30, 2021. Total sales grew 166% to $34 million in the quarter versus last year’s $14.1 million for the same time period. Village Farms net income grew 270% from $800,000 in 2020 to $3.2 million in the second quarter of 2021.

“We are so proud to report another record quarter for Pure Sunfarms’ retail branded sales, which grew 22% sequentially – the fourth consecutive quarter of 20%-plus growth – which contributed to total net sales growth of 38% sequentially, once again outpacing the broader retail cannabis market as we continue to gain national market share,” said Michael DeGiglio, CEO, Village Farms. “Importantly, we are also reporting a 192% sequential increase in adjusted EBITDA for Pure Sunfarms this quarter to C$9.1 million, a record since our Retail Branded Sales launch, and further evidence of the importance of our large-scale, low-cost cultivation capabilities combined with an exceptional management team and the right brand and product strategy.”

Produce Takes A Beating

The company reported that produce sales decreased (4%) with higher production volumes offset by lower pricing as the tomato industry experienced one of the lowest pricing environments for tomatoes-on-the-vine and beefsteak varieties in the past ten years versus strong pricing due to elevated demand amidst pandemic-related restrictions in the second quarter of 2020. Village Farms said there were indications that pricing is moving back to historical levels, however, year-over-year comparisons remain challenging.

The produce adjusted EBITDA was a loss of ($3.9) million, which excluded a $1.4 million incremental electricity expense in Texas due to temporarily elevated pricing for a five-day period in February (more than 100- times higher than the prices observed in early 2021 and historical February pricing). Texas experienced an unprecedented winter storm which resulted in power supply constraints.

DeGiglio added, “We expect our Produce business to normalize toward the end of this year with indications that prices are trending back to historical levels, as production volumes have improved throughout 2021. Our Texas produce greenhouse operations, with a replacement value in excess of $300 million, and located in one of the best growing environments for cannabis in the continental United States, represent one of our potential pathways to participate in the U.S. high-THC cannabis market. We continue to operate and manage these facilities for this optionality.”


Village farms said its cannabis was the top-selling brand* of dried flower products with the Ontario Cannabis Store (by kilograms sold and dollars sold) for the quarter ended June 30, 2021, and remained the top-selling brand of dried flower products with the OCS (by kilograms sold and dollars sold) for the 21-month period since its retail branded sales launch in October 2019. The company also claimed it was the top-selling Licensed Producer of dried flower products with the OCS (by kilograms sold and dollars sold) for the quarter ended June 30, 2021, and was the top-selling brand of dried flower products in Alberta for the quarter ended June 30, 2021, and monthly since October 2020 (by dollars sold). Market share performance data cited has been calculated by Pure Sunfarms from sales information provided by Buddi retail store data from over 300 retailers across Alberta and British Columbia as of June 30, 2021.

Consolidated Results

The consolidated results include all three of the company’s operating segments, which include produce, cannabis and clean energy, along with all public company expenses. The remaining 41.3% interest in Pure Sunfarms was acquired by Village Farms on November 2, 2020; for the three and six months ended June 30, 2021, the operating results of Pure Sunfarms are consolidated in the Consolidated Statements of Income (Loss), and for the three and six months ended June 30, 2020, Pure Sunfarms’ results are included in equity earnings from unconsolidated entities in our Consolidated Statements of Income (Loss).

Sales for the three months ending June 30, 2021, were $70 million as compared to $47 million for the three months ended June 30, 2020. The increase in sales was primarily due to the inclusion of Pure Sunfarms’ Q2 2021 revenues of $24 million and an increase in produce supply partner sales of $1.8 million, partially offset by a decrease in our own produce sales of ($3,676) and VFCE power sales of ($151). The produce supply partner sales increase was due to higher volumes of pounds sold of tomatoes, peppers, cucumbers and mini-cucumbers.

Net loss for the three months ended June 30, 2021 was ($4.5 million) as compared to ($119 million) for the three months ended June 30, 2020. The increase in net loss was primarily due to a lower gross margin from the produce operations and higher corporate share-based compensation, partially offset by an improved operating profit for Pure Sunfarms in the three months ended June 30, 2021 as compared to June 30, 2020.

Debra BorchardtMarch 16, 2021


Village Farms International, Inc.  (NASDAQ: VFF) announced its financial results for the three months and year ended December 31, 2020. Sales increased 43% to $47.4 million for the quarter versus last year’s $33.1 million for the same time period. The net income rose 197% from ($7.2) million to $7.0 million in the quarter. Village Farms delivered earnings per share were $0.12, which beat expectations by ten cents. Investors though seemed unimpressed and the stock was sold off by over 9% in early trading to lately trade at $15.82.

For the full year, sales grew 18% to $170.1 million over 2019’s sales of $144.6 million. Net income rose 404% to $11.6 million in 2020 versus 2019’s net income of $2.3 million. The earnings per share for the year were $0.20. The company noted that “on December 31, 2020, Village Farms owned 100% of Pure Sunfarms Corp., as the full acquisition of the remaining interest in Pure Sunfarms occurred November 2, 2020. Accordingly, for the 60-day period from November 2 to December 31, 2020, Pure Sunfarms’ financial results are consolidated with Village Farms results for both the fourth quarter and year ended December 31, 2020.”

“The fourth quarter was a solid finish to a year of significant achievement for Village Farms and our wholly-owned Canadian cannabis subsidiary, Pure Sunfarms, which saw great success as it transitioned its focus to retail branded sales from nearly all sales in 2019 being non-branded, mainly to other producers,” said Michael DeGiglio, CEO, Village Farms. “Following a 40% sequential increase from the second to the third quarter of 2020, Pure Sunfarms sales of branded retail products to provincial distributors increased another 28% sequentially from the third to the fourth quarter, as our branded dried flower products continued to be the top seller with the Ontario Cannabis Store, and our first Cannabis 2.0 products were well received by consumers. This contributed to our ninth consecutive quarter of profitability, even as we invested during the quarter to support our future growth.”

“Finally, alongside the momentum at Pure Sunfarms, our produce business had a strong 2020, driven by higher pricing amidst elevated demand across our national and regional grocer and “big box” customers for much of the year. Our significant progress over the last two years in transitioning capacity designated for cannabis to growing partners enabled us to take full advantage of these market dynamics, coupled with year on year improvements at our Texas green house facilities, drove a $16.5 million year over-year improvement in Adjusted EBITDA to support our longer-term growth opportunities in cannabis.”

In January Village Farms entered into definitive agreements with certain institutional investors for the purchase and sale of an aggregate of 10,887,097 common shares in a registered direct offering, for expected gross proceeds of approximately $135 million (approximately CAD$171 million ). The company sold the shares at $12.40 (approximately CAD$15.70 ).


Debra BorchardtJanuary 15, 2021


Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF) has entered into definitive agreements with certain institutional investors for the purchase and sale of an aggregate of 10,887,097 common shares in a registered direct offering, for expected gross proceeds of approximately $135 million (approximately CAD$171 million ). The company sold the shares at $12.40 (approximately CAD$15.70 ). The closing is expected to be on or about January 20, 2021. Village Farms said the net proceeds will be used for general working capital purposes.

The stock was dropping in early trading on the news but was lately selling at $14.35, not too far from the company’s 52-week high of $15.05.

The Road To Owning Pure Sunfarms

In March of 2020, Village Farms and Emerald Health Therapeutics (TSXV: EMH)(OTCQX: EMHTF) said that they had entered into a settlement agreement that would settle their prior disputes. The result was that Village Farms would own 53.5% of Pure Sunfarms (PSF) and Emerald would own 46.5% of Pure Sunfarms. Originally this was a 50/50 joint venture, but then the two companies had a falling out. Then on November 2, 2020 (subsequent to quarter-end), the company acquired all issued and outstanding shares of Pure Sunfarms, as a result of which Village Farms owned 100% of Pure Sunfarms.

On November 23, the company announced that Pure Sunfarms had received from Health Canada its Cannabis Research License to conduct human administration trials for sensory evaluation of cannabis, enabling it to engage in on-site assessments of the taste, sight, smell, or touch of its products at its Delta 3 cannabis facility in Delta, British Columbia.

“This license provides us with significant new opportunities in the formulation and refinement of our products, and underscores our commitment to innovation and the advancement of the Canadian cannabis consumer experience,” said Mandesh Dosanjh, President and Chief Executive Officer, Pure Sunfarms. “We look forward to leveraging this new capability to continue to extend Pure Sunfarms’ product leadership and further strengthen what is already one of Canada’s best-selling cannabis brands.”

Net income for the nine months ending September 30, 2020, included a $4.7 million gain on receipt of Pure Sunfarms shares from Emerald Health Therapeutics as per the Settlement Agreement and Mutual Release, dated March 2, 2020, by and between Village Farms International, Inc., Emerald Health Therapeutics Inc., Emerald Health Therapeutics Canada Inc., and Pure Sunfarms Corp.


Debra BorchardtAugust 13, 2020


Emerald Health Therapeutics, Inc. (OTCQX: EMHTF) reported preliminary, unaudited financial results for the second quarter of 2020 for its 41.3%-owned joint venture, Pure Sunfarms. Gross sales fell from C$32 million ($24 million) in the second quarter of 2019 to C$19 million ($14 million)  in the second quarter of 2020. The company attributed the 40% decrease to a lower average selling price per gram of dried flower.

The net average selling price per gram of dried flower was 29% lower in the three months ended June 30, 2020, compared to the three months ended March 31, 2020.

While prices fell the cost of sales increased. The company blamed this on additional packaging and logistics costs associated with increased retail sales compared to the bulk wholesale model in 2019. The cost per gram sold for the second quarter was lower than the cost per gram in the first quarter of 2020, by 5%, even with the significant increase in retail sales quarter on quarter, which is a reflection of the increase in large format SKUs in the product mix and a lower cost of cultivation.

The breakdown in sales was 57% to provincial boards (flower) and 43% to the wholesale channel (flower and trim). This included nonmonetary transactions with extraction licensed producers in which Pure Sunfarms sold extraction grade dried flower and trim and purchased various forms of distillate from the same counterparties, which will be used in Pure Sunfarms’ future Cannabis 2.0 products.

“Pure Sunfarms’ leadership in low-cost production enables it to offer consumers high-quality cannabis products that are well-priced. This strong competitive positioning against both licensed and unlicensed producers has enabled it to achieve leading market share in Ontario and strong growth in other provinces,” said Riaz Bandali, President and Chief Executive Officer of Emerald. “With its broadening product mix, including forthcoming oils and Cannabis 2.0 products, we anticipate that Pure Sunfarms will continue to build on its competitiveness and accomplishments.”

Earlier this year Emerald Health entered into a settlement agreement Village Farms that settled their prior disputes over Pure Sunfarms. The result is that Village Farms will own 53.5% of Pure Sunfarms (PSF) and Emerald will own 46.5% of Pure Sunfarms. Originally this was a 50/50 joint venture, but then the two companies had a falling out.

Pure Sunfarms Sales For Village Farms

Village Farms (VFF) said its share of sales for Pure Sunfarms fell to $5.5 million for the most recent quarter from last year’s $15 million. It reported that the total Pure Sunfarm sales for the quarter were $14 million versus last year’s $24 million, a decline of 40%.

“The second quarter continues to demonstrate the earnings capacity of Pure Sunfarms as it delivered its sixth consecutive quarter of net income and seventh consecutive quarter of positive EBITDA,” said Michael DeGiglio , CEO Village Farms. “Although retail branded sales were level compared to the first quarter on a dollar basis, retail sales volume increased 89% as Pure Sunfarms’ continued to have great success with its large-format, value offerings, which have consistently ranked among the best-selling dried cannabis products with the Ontario Cannabis Store since launch.

Debra BorchardtMarch 3, 2020


 Village Farms International, Inc. (TSX: VFF)(NASDAQ:VFF) and Emerald Health Therapeutics (TSXV: EMH)(OTCQX: EMHTF) said that they have entered into a settlement agreement that will settle their prior disputes. The result is that Village Farms will own 53.5% of Pure Sunfarms (PSF) and Emerald will own 46.5% of Pure Sunfarms. Originally this was a 50/50 joint venture, but then the two companies had a falling out.

Original Deal

Last year, Emerald said it had contributed over $37.4 million in equity investment in the D3 & D2 greenhouse operations for the Pure Sunfarms joint venture. In addition, it provided $13 million in an interest-bearing loan and purchased over $20.5 million of cannabis as per the terms of its supply agreement with PSF.  On November 1, 2019, Emerald notified PSF that it has decided to set-off the $5.94 million payment owed by Emerald to PSF against a portion of PSF’s debt under Emerald’s $13.0 million principal amount shareholder loan.

Village Farms then advanced $5.94 million to PSF for additional equity. Village Farms claims that it has the right to acquire these shares under the PSF shareholders’ agreement. At the time Riaz Bandali, President and CEO of Emerald said, “We were shocked to receive this notice. We can’t speculate on Village Farms’ motivation for making this irresponsible and inaccurate claim, but we want to reassure investors that there has been no change in ownership of PSF. We are disappointed at the aggressive approach of Village Farms in this matter; however, we continue to believe that cooler heads will prevail. Until then we will assertively defend our rights on behalf of our shareholders in the face of these unwarranted actions by Village Farms.”


Emerald’s $5.94 million equity contribution that it opted to not make is now canceled. It is waiving repayment of the $13 million loan and instead will issue a  promissory note to Pure Sunfarms in the amount of C$952,237. Village Farms has made an additional equity contribution to Pure Sunfarms of C$8.0 million in 2020.

In addition, Emerald had the provision to purchase 40% of Pure Sunfarms’ aggregate production in 2018 and 2019 and they are now released from that. Pure Sunfarms and Emerald will release each other from their current supply agreement under which Emerald has the provision to purchase 25% of Pure Sunfarms’ aggregate cannabis production from the Delta facilities in 2020, 2021 and 2022.

Emerald will transfer 2.5% of additional equity in Pure Sunfarms to Village Farms. Village Farms is one of the largest and longest-operating vertically integrated greenhouse growers in North America and the only publicly traded greenhouse produce company in Canada. Village Farms produces and distributes fresh, premium-quality produce with consistency 365 days a year to national grocers in the U.S. and Canada from more than nine million square feet of Controlled Environment Agriculture (CEA) greenhouses in British Columbia and Texas, as well as from its partner greenhouses in British ColumbiaOntario, and Mexico. Sunfarms Corp. is one of the single largest cannabis growing operations in the world.



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