Village Farms International Confirms Majority Ownership Interest in Pure Sunfarms
VANCOUVER, Nov. 26, 2019 /PRNewswire/ – Village Farms International, Inc. (“Village Farms”) (TSX: VFF;Nasdaq: VFF) today responds to inaccurate and misleading public disclosure by Emerald Health Therapeutics, Inc. (“Emerald”) and provides an update in respect of its majority ownership interest in Pure Sunfarms Corp. (“Pure Sunfarms”), as described in more detail in Village Farms’ press release dated November 19, 2019 (the “Prior VF Press Release”).
Additional Equity Contribution Accepted: Village Farms Confirms Majority Ownership Interest in Pure Sunfarms
As a result of Emerald’s failure to pay $5,940,000 to Pure Sunfarms on November 1, 2019 (the “Emerald Payment Default”), Village Farms made an additional equity contribution (the “VF Additional Equity Contribution”) and increased its ownership in Pure Sunfarms on November 19, 2019, thereby becoming the majority owner of Pure Sunfarms.
Notwithstanding the position communicated in Emerald’s press release of November 20, 2019, which appears to be based on a material misunderstanding of the relevant legal agreements, Pure Sunfarms’ management has now confirmed that the VF Additional Equity Contribution has been properly credited to Village Farms’ share capital pursuant to the terms of the Pure Sunfarms shareholders agreement (the “Shareholders Agreement”). Pure Sunfarms management has further indicated to Village Farms that its understanding of the relevant legal agreements and events that have occurred to date is consistent in all material respects with the Prior VF Press Release.
As described in the Prior VF Press Release, following the determination of the fair market value of Pure Sunfarms, pursuant to an appraisal process set forth in the Shareholders Agreement, Village Farms expects to be issued additional common shares of Pure Sunfarms, effective as of November 19, 2019. Village Farms expects that the appraisal process will be concluded in February 2020.
Cancellation of Emerald’s Escrowed Shares in Pure Sunfarms
With respect to the 5,940,000 common shares of Pure Sunfarms that were placed in escrow pending payment by Emerald of an equity contribution to Pure Sunfarms, Village Farms continues to seek the cancellation of such shares as a result of the Emerald Payment Default. Such share cancellation is expressly provided for in the applicable legal agreements. Following Emerald’s delivery of a dispute notice relating to the cancellation of the escrowed shares on November 19, 2019, Village Farms notified Emerald that it required the matter to be submitted to arbitration in accordance with the Shareholders Agreement. Assuming the arbitrator confirms that the cancellation of these shares should occur, such share cancellations will reduce Emerald’s equity ownership in Pure Sunfarms effective as of November 19, 2019.
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. Village Farms is now leveraging its 30 years of experience as a vertically integrated grower for the rapidly emerging global cannabis opportunity through its majority ownership position in British Columbia-based Pure Sunfarms, one of the single largest cannabis growing operations in the world. Village Farms 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.