– U.S. Outdoor Hemp Production Program
Progressing on Plan and Remains on Track to Realize First Sales in
2019 –
– Company to Transition to Domestic Issuer
Status in the U.S. –
VANCOUVER, July 11, 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, on schedule, achieved full run-rate production of
75,000 kilograms of dried cannabis annually at its 1.1 million
square foot Delta 3 greenhouse in
Delta, B.C.
"With the benefit of Village Farms' 30-plus year track record of
successfully developing and operating large-scale greenhouse
facilities, Pure Sunfarms' ramp up to full production of premium,
B.C.-grown cannabis has proceeded exceedingly well, and at a
remarkable pace," said Michael
DeGiglio, CEO Village Farms. "Quality, yield and cost of
production at Pure Sunfarms' Delta
3 operation continue to meet or exceed our expectations, as they
have since commercial production began last year. Importantly, with
the advantage of the most experienced growing team in the industry
and Village Farms' continued support, Pure Sunfarms' production
output has not been impacted by crop issues as has been reported to
be the case with other Canadian Licensed Producers. Pure
Sunfarms is a best-in-class growing operation that is setting the
standard for large-scale, high-quality cannabis production in
Canada."
"We look forward to strong growth in revenue and profitability
at Pure Sunfarms, driven by the successful ramp to full production
at Delta 3. In addition,
gross margin will benefit from the start of sales to the Ontario
Cannabis Store and other potential retailers following Health
Canada's expected near-term approval to sell directly to
provincial/territorial and private retailers, as well as the
transition of Pure Sunfarms' supply agreement with another licensed
producer to more favorable terms on January
1, 2020."
Pure Sunfarms continues to steadily progress on its in-house
extraction capabilities, which it expects to be operational this
year.
Pure Sunfarms is one of the largest cannabis producers in the
world and was profitable in both the fourth quarter of 2018 and
first quarter of 2019, during both of which its Delta 3 greenhouse was ramping up and
operating at well under full production.
Pure Sunfarms has commenced conversion of its second 1.1 million
square foot greenhouse operation, Delta 2, for cannabis production, which will
double Pure Sunfarms' annual output at full production to 150,000
kilograms. Pure Sunfarms expects to complete its first
harvest at the Delta 2 facility by
mid-2020, ramp to full run rate annual production by the fourth
quarter of 2020, and operate at full production of 75,000
throughout 2021.
U.S. Outdoor Hemp Production Program on Track to Realize
First Sales in 2019
Village Farms also announced that its program for outdoor
cultivation of high-cannabidiol (CBD) hemp and CBD extraction is
progressing on plan. The Company's joint venture for hemp
production and processing in the Eastern U.S., Village Fields Hemp,
has planted out nearly 600 acres in Virginia, North
Carolina and South Carolina
and expects to begin harvesting in August of this year, with
initial sales of hemp biomass to commence in the fourth quarter of
2019. Village Fields Hemp is now well advanced in planning
and engineering work to establish its centralized extraction
operations, which will be based in Georgia. Village Fields
extraction operations are expected to be operational in the first
quarter of 2020.
In addition, the Company's joint venture for hemp production and
processing in Colorado, Arkansas
Valley Green and Gold Hemp, has planted out 120 acres and expects
to begin harvesting in October 2019. The Company continues to
expect Arkansas Valley Green and Gold Hemp to have extraction
operations in place and begin processing crude CBD oil in early
2020.
In anticipation of beginning large-scale outdoor hemp production
this year, Village Farms secured sufficient quantities of hemp seed
early in 2019 to enable production at its planned scale.
"Our outdoor hemp cultivation program is well underway and
remains on track to realize its first sales from biomass this year
and from crude CBD oil early next year as we quickly move into the
development and manufacture of our own CBD products," said Mr.
DeGiglio. "The rapid roll out of our program is a major step
forward in the pursuit of our goal to become a vertically
integrated consumer packaged goods supplier of CBD products to "big
box" and other major retailers, as well as to other consumer
packaged goods companies."
Conversion of Permian Basin Greenhouse for Hemp Production
and CBD Extraction Steadily Advancing
Village Farms continues the conversion of half of its 1.3
million square foot Permian Basin greenhouse operation in
West Texas for hemp production and
CBD extraction. The Company expects the Permian Basin
facility to be ready for hemp production in the fourth quarter of
2019, with extraction operations to be added in the existing
facility in early 2020.
"We are closely monitoring developments as the Texas Department
of Agriculture proceeds towards establishing a licensing and
regulatory framework for hemp cultivation and processing and
continue to expect our Permian Basin greenhouse to be ready to
begin hemp production as soon as we are permitted to do so under
Texas legislation," said Mr.
DeGiglio.
Transition from Foreign Private Issuer Status to Domestic
Issuer Status in the U.S.
Village Farms also announced that since more than 50% of the
Company's common shares were directly or indirectly owned of record
by shareholders domiciled in the United
States on June 28, 2019
(actual U.S. ownership was 61% at the close of business on
June 28th), Village Farms no longer
meets the definition of a "foreign private issuer" under the U.S.
Securities Exchange Act of 1934.
As a result of becoming a U.S. domestic issuer, the Company will
be subject to SEC reporting requirements applicable to a U.S.
domestic company, beginning on January 1,
2020. The Company remains eligible to use the forms and
rules applicable to foreign private issuers until December 31, 2019. These U.S. reporting
requirements will require the Company's financial statements and
financial data to be presented under U.S. GAAP. While the full
extent of the changes resulting from the transition to U.S. GAAP
reporting has not yet been finalized, the Company has determined
that it will report a Biological Asset under U.S. GAAP using
historical cost rather than fair value, which is required under
IFRS. The Company will continue to report its second and third
quarters of 2019 using IFRS and will file its first Form 10-K with
the SEC in March 2020 using U.S. GAAP
for its year ended December 31, 2019
results. In addition, Village Farms will be required to file
quarterly reports (10-Q) and current reports (8-K) with the SEC,
starting in 2020, as well as comply with all the U.S. reporting and
internal control standards applicable to an accelerated filer.
Although the Company will become a U.S. registrant with the SEC, it
will continue to be a Canadian corporation.
Village Farms' shareholders are not required to take any action
as a result of the Company's transition to U.S. domestic issuer
status and the Company's shares will continue to be listed on both
the Toronto Stock Exchange and Nasdaq under the symbol "VFF".
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 two joint ventures, Village Fields Hemp and
Arkansas Valley Green and Gold Hemp, for outdoor hemp cultivation
and CBD extraction and is pursuing controlled environment hemp
production at a portion of its Texas greenhouse operations, which total 5.7
million square feet of production area.
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SOURCE Village Farms International, Inc.