VANCOUVER, Oct. 15, 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 Corp. ("Pure Sunfarms" or the "Joint Venture"), was
advised by Emerald that it would be receiving a dispute notice from
Emerald Health Therapeutics ("Emerald") (TSV:EMH) in respect of
certain amounts for which Pure Sunfarms has invoiced Emerald under
the Supply Agreement (as defined below).
The wholesale market price for cannabis in the markets where the
Joint Venture sells its production has declined during the three
months ended September 30, 2019,
resulting in lower margins realized by the Joint Venture for its
production as compared to the three months ended June 30, 2019. Where Emerald has not exercised
its right, either in whole or in part, under a supply agreement
between Emerald and the Joint Venture (the "Supply Agreement") to
purchase 40% of the Joint Venture's cannabis production, the Joint
Venture has sold some of that excess production in the spot market
at prices lower than the predetermined selling price to Emerald
under the Supply Agreement. Subject to certain limited exceptions
provided for in the Supply Agreement, Emerald is required under the
Supply Agreement to pay the Joint Venture an amount equal to the
difference between the predetermined selling price for the
contracted production volumes not purchased by Emerald and the
market price realized (to the extent lower than the predetermined
selling price) (each, a "Price Deficiency Obligation"). As at the
date hereof, the Joint Venture has advised the Company that (i)
Emerald currently owes the Joint Venture approximately $7 million of Price Deficiency Obligations, and
(ii) Emerald has advised the Joint Venture that it does not agree
with the Joint Venture's position and that it believes it is not
responsible for any Price Deficiency Obligations under the Supply
Agreement.
For greater certainty, the Company is not a party to the Supply
Agreement and any amounts owing thereunder are payable to the Joint
Venture.
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 USA, LLC, and Arkansas Valley Green and Gold
Hemp LLC, 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.
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SOURCE Village Farms International, Inc.