Emerald Health Therapeutics Stock Sprouts Higher on Cultivation License

Emerald Health Therapeutics, Inc. (TSXV:EMH) and Village Farms International Inc. (TSX:VFF) intend to grow cannabis at their jointly-owned Delta 3 greenhouse operation in British Columbia

SmallCapPower | March 7, 2018: Emerald Health Therapeutics, Inc. (TSXV:EMH) and Village Farms International Inc. (TSX:VFF) announced on Monday the issuance of cultivation license by Health Canada for their jointly-owned Delta 3 greenhouse operation under Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR). Located in Delta, British Columbia, the cannabis growing facility, with 1.1 million sq. ft. of growing space, is optimally-designed and is estimated to produce 75,000 kg of quality cannabis annually at full production level.

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Both companies intend to make their joint venture as one of the most consistently reliable suppliers of quality cannabis products to wholesalers, distributors and retailers across Canada as well as worldwide. Their goal is to be a low-cost Canadian pot producer at an all-inclusive production cost of even less than $1 per gram at full production.

Emerald Health Therapeutics Executive Chairman Avtar Dhillon said, “Our Joint Venture is well positioned to be a leading supplier in the imminent legal adult-use Canadian cannabis market, with potentially significant benefit to each of our companies and our shareholders. With Emerald’s in-depth cannabis expertise, Village Farms’ know-how based on innumerable crop cycles over 30 years of large-scale greenhouse growing and working with global agricultural leaders and high-tech facilities and systems experts, we configured this greenhouse for continuous weekly harvesting year-round, maximum operating efficiencies, and flexibility to adapt to an evolving market. We are accomplishing this on a very capital-efficient basis.”

After the transfer of existing starter plants from Emerald Health Therapeutics, the joint venture is going to commence cultivation of marijuana in the Delta 3 greenhouse and anticipates receipt of its Sales License under ACMPR by July 1, 2018.

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Village Farms International’s CEO Michael DeGiglio said, “Growing any agricultural crop on a large scale and repeatedly delivering expected quantities and consistent quality, with full regulatory compliance, at a competitive price is an extremely challenging proposition for even the most experienced agricultural producers. The goal is for the Joint Venture to set the standard in this regard in the Canadian cannabis industry and establish itself as a preferred supplier for both the short- and long-terms. In addition to production ramp-up, in 2018 the Joint Venture will focus on product development and developing its marketing strategy to become a vertically-integrated leader in the Canadian cannabis market.”

For conversion of its Delta 3 greenhouse operation to cannabis production, the joint venture is focusing on management of climate and contaminants, optimizing yield, maximizing efficiencies, and achieving continuous year-round production. First 250,000 sq. ft. section of total 1.1 million sq. ft., Delta 3 greenhouse is largely converted to cannabis production and is expected to start production in April 2018. The conversion of remainder of 1.1 million sq. ft. is in progress and the entire facility is projected to be in production in 2019.

Operating through its wholly-owned subsidiary Emerald Health Botanicals, Emerald Health Therapeutics is authorized to produce and sell dried medical cannabis flower and medical cannabis oil. After the announcement on Monday, Emerald Health Therapeutics stock price climbed ~16% on TSX to close at $5.94.

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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