Emerald Health Therapeutics Announces Update On Pure Sunfarms Supply Agreement
October 15 2019 - 7:00AM
Emerald Health Therapeutics (“Emerald”) (TSXV: EMH; OTCQX: EMHTF)
announced that it has notified Pure Sunfarms Corp. ( the “Joint
Venture”), its 50%-owned joint venture, that it does not agree that
Emerald has any liability under the current Supply Agreement
between Emerald and the Joint Venture with respect to the Joint
Venture’s recent sales of cannabis to third parties at prices below
the predetermined purchase price to Emerald (the “Purchase Price”)
set out in the Supply Agreement.
Under the Supply Agreement, Emerald has the
right to purchase, or reject, 40% of the cannabis production of the
Joint Venture. If Emerald rejects cannabis offered to it by the
Joint Venture, under certain circumstances, Emerald would be
obligated to pay the difference between the Purchase Price and the
price realized by the Joint Venture.
Emerald believes that under the terms of
the Supply Agreement, due to the manner in which the Joint Venture
conducted its recent cannabis sales, it does not have a liability
to the Joint Venture under the Supply Agreement.
Emerald’s belief is that under the terms of the
Supply Agreement the manner in which the Joint Venture conducted
certain cannabis sales does not create a liability for Emerald to
the Joint Venture.
As at the date hereof, the Joint Venture has
attempted to invoice Emerald for approximately $7 million under
this provision of the Supply Agreement.
Emerald has informed the Joint Venture that it
does not believe it has any liability for such amounts to the Joint
Venture under the Supply Agreement and has requested that this
issue be addressed at the upcoming meeting of the Board of
Directors of the Joint Venture.
About Emerald Health Therapeutics,
Inc.
Emerald Health Therapeutics, Inc. is a Canadian
licensed producer of cannabis products focused on differentiated,
value-added product development for medical and adult-use customers
supported by novel intellectual property, large-scale cultivation,
extraction, and softgel encapsulation, as well as unique marketing
and distribution channels. Its 50%-owned Pure Sunfarms operation in
British Columbia has reached its full run-rate annual production of
approximately 75,000 kg at its first 1.1 million square foot
greenhouse operation, Delta 3. Pure Sunfarm’s second 1.1 million
square foot greenhouse, Delta 2, is planned to be in full
production by the end of 2020. Emerald’s Verdélite subsidiary is a
high-quality indoor growing and processing facility in Québec
focused on premium, craft cannabis strains. Its Metro Vancouver
organic greenhouse and outdoor operation is approved for
substantial commercial production. Emerald has contracted for
approximately 1,000 acres of hemp annually in 2019 to 2022 with the
objective of extracting low-cost CBD. The executive team is highly
experienced in life sciences, product development, large-scale
agri-business, and marketing.
Please visit www.emeraldhealth.ca for more
information or contact: Rob Hill, Chief Financial Officer (800) 757
3536 Ext. # 5
Emerald Investor Relations (800) 757 3536 Ext.
#5invest@emeraldhealth.ca
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking
Statements: Certain statements made in this press release that are
not historical facts are forward-looking statements and are subject
to important risks, uncertainties and assumptions, both general and
specific, which give rise to the possibility that actual results or
events could differ materially from our expectations expressed in
or implied by such forward-looking statements. Such statements
include obtaining required regulatory approvals; production and
processing capacity of various facilities; expansion of
facilities; production at various facilities; receipt of hemp
deliveries; payments of amounts owed to and owed by Emerald.
We cannot guarantee that any forward-looking
statement will materialize, and readers are cautioned not to place
undue reliance on these forward-looking statements. These
forward-looking statements involve risks and uncertainties related
to, among other things, changes of law and regulations; changes of
government; failure to obtain regulatory approvals or permits;
failure to obtain necessary financing; results of production and
sale activities; results of scientific research; regulatory
changes; changes in prices and costs of inputs; demand for labour;
demand for products; failure of counter-parties to perform
contractual obligations; as well as the risk factors described in
the Company’s annual information form and other regulatory filings.
The forward-looking statements contained in this press release
represent our expectations as of the date hereof. Forward-looking
statements are presented for the purpose of providing information
about management's current expectations and plans and allowing
investors and others to obtain a better understanding of our
anticipated operating environment. Readers are cautioned that such
information may not be appropriate for other purposes. The Company
undertakes no obligations to update or revise such statements to
reflect new circumstances or unanticipated events as they occur,
unless required by applicable law.
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