VANCOUVER, April 1, 2019 /CNW/ - Village Farms
International, Inc. ("Village Farms" or the "Company") (TSX:
VFF) (NASDAQ: VFF) today announced that its 50%-owned joint venture
for large-scale, low-cost, high-quality cannabis production, Pure
Sunfarms, has exercised its option on the existing 1.1 million
square foot Delta 2 greenhouse facility currently owned by Village
Farms in Delta, British Columbia. The Delta 2 facility is a
newer, nearly identical "sister" facility immediately adjacent to
the 1.1 million square foot Delta 3 greenhouse facility, which is
already one of the largest cannabis production operations in the
world.
The addition of the Delta 2 greenhouse operation doubles Pure
Sunfarms' total production area to 2.2 million square feet and,
with conservatively targeted annual production of approximately
75,000 kilograms of dried cannabis, doubles its annual cannabis
production potential to approximately 150,000 kilograms. Pure
Sunfarms also expects to benefit from further economies of scale
resulting from the concentration of 2.2 million square feet of
production area at a single location, which will further support
the Company's goal to be the high-quality, low-cost cannabis
producer in Canada. The existing automated propagation
operation (nursery) in the Delta 3 facility will provide
propagation for the Delta 2 facility, enabling more of the
footprint of the Delta 2 facility to be devoted to flower rooms
than in Delta 3, which is expected to generate further cost
efficiencies.
"With an ongoing shortage of supply from Canadian cannabis
producers, Village Farms is thrilled that Pure Sunfarms' has made
the decision to more than double its production capacity with the
addition of Delta 2 – just three weeks after the option became
exercisable," said Michael DeGiglio,
Chief Executive Officer, Village Farms and Co-Chair, Pure
Sunfarms.
"Pure Sunfarms is setting itself apart amongst the top echelon
of Canadian licensed producers, achieving its conversion and
production ramp up milestones, meeting or exceeding expectations on
quality, yield and cost, and delivering profitability in its first
full quarter of operations. The unmitigated success of the
conversion, licensing and production ramp up of the Delta 3
facility, alongside the outstanding performance of Pure Sunfarms'
management and operational teams, gives us great confidence in
their ability to execute on the Delta 2 facility. Delta 2
will also benefit from the continued support of Village Farms, with
its decades of large-scale, low-cost operational experience and
greenhouse design and systems acumen, as well as the significant
learnings gained through the conversion and ramp up of the Delta 3
facility."
Mr. DeGiglio added, "Exceptional growing operations are the
foundation of great agricultural brands. Pure Sunfarms is already
one of the largest and most capable producers in the Canadian
cannabis industry and more than doubling its production capacity
will further leverage this crucial competitive advantage as it
establishes itself as a premier vertically integrated
supplier. I look forward to reporting on the continued
progress at Pure Sunfarms, and the significant contribution of that
progress to Village Farms' financial results and value for our
shareholders."
Pure Sunfarms will immediately begin design and procurement for
the conversion of the Delta 2 facility for cannabis production. As
with the Delta 3 facility, Pure Sunfarms plans a phased conversion
to expedite time to production and revenue generation.
Conversion of the external infrastructure, including that for the
electrical distribution system, is expected to commence in Summer
2019. Village Farms, on behalf of Pure Sunfarms, has already
secured 24 MW of power from the local utility to support
supplemental lighting and post-harvest equipment at the Delta 2
facility. As with the Delta 3 facility, personnel from the
existing Village Farms growing and maintenance teams and skilled
labour force will be transitioned to Pure Sunfarms. Pure
Sunfarms is targeting to complete its first harvest at the Delta 2
facility by mid-2020 and achieve full run-rate production in the
fourth quarter of 2020. All targeted production timelines are
subject to the timing and receipt of requisite Health Canada
licenses. Pure Sunfarms plans to begin the process of
applying for a cultivation license for the Delta 2 facility as soon
as possible, which it will pursue as a "second-site" license
application.
In accordance with the terms of the joint venture agreement with
Emerald Health Therapeutics ("Emerald") for Pure Sunfarms, Village
Farms' is contributing the Delta 2 facility to the joint venture
and Emerald will contribute an aggregate of CAD$25 million in cash. Emerald's cash
contribution will fund a portion of the conversion of the Delta 2
facility to cannabis production, which is estimated to cost
approximately CAD$60 million,
consistent with the cost of conversion of the Delta 3 facility. The
remainder of the conversion costs will be funded entirely by Pure
Sunfarms.
Pure Sunfarms continues to have an option on the 2.6 million
square foot Delta 1 greenhouse facility, one of the single largest
greenhouse footprints in North
America, which is immediately adjacent to the Delta 2 and
Delta 3 facilities, and which continues to be owned and operated by
Village Farms. The Delta 1 option expires on September 28, 2021. Should Pure Sunfarms
fail to exercise the Delta 1 option, the terms if the joint venture
agreement permit Village Farms to convert and operate the Delta 1
facility for the production of any agricultural crop.
Mr. DeGiglio commented, "As Pure Sunfarms progresses with the
conversion of the Delta 2 facility, it will evaluate the
opportunity around the Delta 1 option. If the Delta 1 option is
exercised, Pure Sunfarms would have a total of 4.8 million square
feet of production area, which is conservatively estimated to yield
a total of 330,000 kilograms of cannabis production annually,
providing the potential to address a considerable portion of the
entire Canadian market, while providing even greater cost
efficiencies."
Village Farms also announced that Pure Sunfarms has entered into
a subsequent supply agreement with Emerald, which will commence
upon the expiry of the current supply agreement at the end of
2019. Under the new supply agreement, Emerald will purchase
up to 25% of Pure Sunfarms' production in 2020, 2021 and 2022 at
prevailing wholesale market prices.
About Village Farms International, Inc.
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 Columbia, Ontario and Mexico. The Company is now
leveraging its 30 years of experience as a vertically integrated
grower for the rapidly emerging global cannabis opportunity through
its 50% ownership of British
Columbia-based Pure Sunfarms Corp., one of the single
largest cannabis growing operations in the world. The Company
also intends to pursue opportunities to become a vertically
integrated leader in the U.S. hemp-derived CBD market, subject to
compliance with all applicable U.S. federal and state laws.
Village Farms has established a joint venture, Village Fields Hemp,
for multi-state outdoor hemp cultivation and CBD extraction and
plans to pursue controlled environment hemp production at its
Texas greenhouse operations, which
total 5.7 million square feet of production area, subject to
legalization of hemp in Texas.
Cautionary Language
Certain statements contained in this press release constitute
forward-looking information within the meaning of applicable
securities laws ("forward-looking statements"). Forward-looking
statements may relate to the Company's future outlook or financial
position and anticipated events or results and may include
statements regarding the financial position, business strategy,
budgets, litigation, projected production, projected costs, capital
expenditures, financial results, taxes, plans and objectives of or
involving the Company. Particularly, statements regarding future
results, performance, achievements, prospects or opportunities for
the Company, Pure Sunfarms, the greenhouse vegetable industry or
the cannabis and hemp industries are forward-looking statements. In
some cases, forward-looking information can be identified by such
terms as "outlook", "may", "might", "will", "could", "should",
"would", "occur", "expect", "plan", "anticipate", "believe",
"intend", "estimate", "predict", "potential", "continue", "likely",
"schedule", "objectives", or the negative or grammatical variation
thereof or other similar expressions concerning matters that are
not historical facts.
Although the forward-looking statements contained in this press
release are based upon assumptions that management believes are
reasonable based on information currently available to management,
there can be no assurance that actual results will be consistent
with these forward-looking statements. Forward-looking statements
necessarily involve known and unknown risks and uncertainties, many
of which are beyond the Company's control, that may cause the
Company's or the industry's actual results, performance,
achievements, prospects and opportunities in future periods to
differ materially from those expressed or implied by such
forward-looking statements. These risks and uncertainties include,
among other things, the factors contained in the Company's filings
with U.S. and Canadian securities regulators, including as detailed
in the Company's annual information form and management's
discussion and analysis for the year-ended December 31, 2018.
When relying on forward-looking statements to make decisions,
the Company cautions readers not to place undue reliance on these
statements, as forward-looking statements involve significant risks
and uncertainties and should not be read as guarantees of future
results, performance, achievements, prospects and opportunities.
The forward-looking statements made in this press release only
relate to events or information as of the date on which the
statements are made in this press release. Except as required by
law, the Company undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
View original
content:http://www.prnewswire.com/news-releases/village-farms-internationals-pure-sunfarms-doubles-targeted-annual-production-to-150-000-kilograms-by-exercising-its-option-on-village-farms-owned-1-1-million-square-foot-delta-2-greenhouse-facility-300821561.html
SOURCE Village Farms International, Inc.