Village Farms International Inc. (TSX:VFF), one of the Canadian marijuana stocks, said its Pure Sunfarms joint venture has received a Standard Processing License
SmallCapPower | May 23, 2019: Village Farms International Inc. (TSX:VFF) (NASDAQ:VFF), one of the Canadian cannabis stocks, announced Monday that its 50%-owned joint venture Pure Sunfarms has received a Standard Processing License from Health Canada for its 1.1 million sq.ft. Delta 3 greenhouse facility. The license would allow Pure Sunfarms to extract and process cannabis at the Delta 3 facility to advance its product development strategy.
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The Processing License is one of two regulatory steps required for Pure Sunfarms to begin selling directly to provincially/territorially authorized distributors and private retailers. Pure Sunfarms is expecting to sell its cannabis oil to provincial/territorial distributors and private retailers by Q4 2019. Pure Sunfarms will require an additional amendment to its existing sales license to permit the sale of dried products to these retailers, which it expects to receive during Q2 2019.
Village Farms International Chief Executive Officer Michael DeGiglio said, “With its Processing License in hand and the amendment to its sales license expected shortly, Pure Sunfarms should soon begin selling its own branded packaged product directly to the Ontario Cannabis Store under its existing supply agreement, as well as to finalize supply agreements with other provincial boards and private retailers. While spot market pricing for sales to other licensed producers to date has been quite favourable, direct sales to the provincial boards and private retailers is expected to generate meaningfully higher margins, as Pure Sunfarms is reaching its full run-rate annual production of 75,000 kilograms at its Delta 3 facility mid-2019.”
Village Farms International is one of the largest vertically-integrated greenhouse growers in North America, operating more than nine million square feet of greenhouses in British Columbia and Texas. Leveraging this experience in greenhouse growing, the Company has ventured into the rapidly-growing cannabis market thorough its Pure Sunfarms JV in Canada and the Village Fields Hemp JV in the U.S.
Village Farms International stock currently trades at a market capitalization of $899 million with a price-to-book multiple of 7.8x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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