VANCOUVER, BC, Sept. 28, 2021 /PRNewswire/ - Village Farms
International, Inc. ("Village Farms" or the "Company") (NASDAQ:VFF)
(TSX:VFF) today announced it has entered into an option agreement
whereby the Company has received the irrevocable right to acquire
an 80% ownership interest (the "Option Agreement") in Netherlands-based Leli
Holland B.V. ("Leli") upon payment of EUR50,000 (the "Option"). Leli is one of the ten
applicants selected by lottery to receive a license (subject to
customary government approval) 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 (the "Dutch Supply Chain Experiment", 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.
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.
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
the 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. As the majority owner of Leli, Village Farms 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.
The total supply requirement for the ten approved producers
participating in the Dutch Supply Chain Experiment is specified by
the Netherlands government to be
approximately a minimum of 65,000 kilograms of dried flower
annually. Should the Dutch Supply Chain Experiment be
expanded nationally (from the initial approximately 80 coffee shops
to the nearly 600 coffee shops) following formal evaluation by the
Dutch government during the third year of the program, it is
estimated that the Netherlands
would require a minimum of 485,000 kilograms of dried flower
annually to fulfill demand.
"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 as 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 has a long, proven track record as a vertically integrated
CEA grower – design and construction of leading-edge facilities,
efficient, large-scale operations, product development strategy,
branding and marketing – that combined with Leli's local expertise
position us for success in this market. Importantly, we also
share a common heritage with Leli, with Village Farms achievements
and innovations in CEA growing firmly rooted in the deep cultural
know-how of the Netherlands
growing community."
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."
Under current Netherlands law,
the sale and use of cannabis for recreational purposes is
tolerated, however, production and distribution are strictly
prohibited, a policy which believed to negatively impact public
order, safety and public health. 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. Scheduled to be in effect for a minimum of four years
(following a one-year preparation period), under the program 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 ("LPs").
About Village Farms International, Inc.
Village Farms leverages decades of experience as a large-scale,
Controlled Environment Agriculture-based, vertically integrated
supplier for high-value, high-growth plant-based Consumer Packaged
Goods opportunities, with a strong foundation as a leading fresh
produce supplier to grocery and large-format retailers throughout
the US and Canada, and new high-growth opportunities in the
cannabis and CBD categories in North America and selected
markets internationally.
In Canada, the Company's wholly-owned Canadian subsidiary,
Pure Sunfarms, is one of the single largest cannabis operations in
the world, the lowest-cost greenhouse producer and one of the
best-selling brands.
In the US, wholly-owned Balanced Health Botanicals is one of the
leading CBD brands and e-commerce platforms in the country.
Subject to compliance with all applicable US federal and state laws
and stock exchange rules, Village Farms plans to enter the US
high-THC cannabis market via multiple strategies, leveraging one of
the largest greenhouse operations in the country (more than 5.5
million square feet in West Texas), as well as the operational
and product expertise gained through Pure Sunfarms' cannabis
success in Canada.
Internationally, Village Farms is targeting selected, nascent,
legal cannabis and CBD opportunities with significant medium- and
long-term potential, with an initial focus on
the Asia-Pacific region and Europe.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and is subject to the safe harbor
created by those sections. This press release
also contains "forward-looking information" within
the meaning of applicable Canadian securities law. Forward-looking
information can be identified by such terms as "outlook", "may",
"might", "will", "could", "should", "would", "occur", "expect",
"plan", "anticipate", "believe", "intend", "try", "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 not all forward-looking statements
contain these identifying words. The forward-looking statements in
this press release are subject to risks that may include, but are
not limited to Company's expansion plans, expectations regarding
cannabis and CBD categories in North America and
Europe, in particular the Netherlands, the successful receipt of the
production and supply license, completion of the construction and
successful operation of the production facilities for cannabis
production in the Netherlands
meeting government requirements and the final outcome of the
Dutch Supply Chain Experiment ; the retail CBD and
high-THC cannabis markets, the legal and regulatory status of the
cannabis and the CBD business; risks relating to obtaining
additional financing, dependence upon credit facilities,
profitability, product pricing, cannabis, hemp and agricultural
businesses, relating to the conversion of our greenhouses to
cannabis, international expansion, the ongoing and developing
COVID-19 pandemic and tax risks. The Company has based these
forward-looking statements on factors and assumptions about future
events and financial trends that it believes may affect its
financial condition, results of operations, business strategy and
financial needs. 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 securities regulators available on SEDAR and
EDGAR. 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 relate only
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, after the date on which
the statements are made or to reflect the occurrence of
unanticipated events.
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SOURCE Village Farms International, Inc.