Village Farms International announced its financial results for the third quarter ended September 30, 2018.
Highlights for the Third Quarter Ended September 30, 2018
- Sales of US$39.7 million, a decrease of (11%) from US$44.7 million;
- Net loss of US($2.0) million, or US($0.04) per share, compared with net income of $0.3 million, or US$0.01 per share;
- EBITDA of US$0.9 million compared with US$0.8 million;
- Announced a bought deal offering of 3,097,200 common shares of the company at a price of $7.13 for aggregate gross proceeds of $22,083,036;
- Village Farms was accepted as a member of the board of the U.S. Hemp Roundtable, as the Company prepares for potential opportunities, independent of its cannabis joint venture in Canada, that could result from the expected federal legalization of hemp cultivation in the U.S.
Highlights for Village Farms' Cannabis Joint Venture, Pure Sunfarms
- Received its cannabis sales license from Health Canada in late July.
Commenced regular cannabis sales in September. - During the third quarter, Pure Sunfarms received from Health Canada the second, third and fourth amendments to the cultivation license for its 1.1 million square foot greenhouse, permitting it to expand its cannabis production area to approximately 225,000 square feet, 420,000 square feet and 550,000 square feet, respectively.
- By October, the entirety of the first half of the 1.1 million square foot greenhouse was in production.
- Appointed Mandesh Dosanjh as Chief Executive Officer, Pure Sunfarms, who joined from his position as Senior Vice President, Supply Chain and Wholesale, at the Liquor Control Board of Ontario (LCBO), where he led LCBO's supply chain division, and developed and managed its supply chain and wholesale strategy as the LCBO prepared for the legalization of adult-use cannabis. Mr. Dosanjh has substantively advanced supply arrangements with multiple parties, including provincial boards and private retailers, since his appointment.
"Our cannabis joint venture in Canada, Pure Sunfarms, continues to steadily ramp production and remains firmly on track to achieve a full annual production run-rate of 75,000 kilograms in the first half of next year," said Michael DeGiglio, CEO, Village Farms. "The Pure Sunfarms operation is producing quality, multiple strains with yields in line with our expectations. There is tremendous interest from provincial boards and other licensed producers for its product. As was expected, the Canadian cannabis market is well short of supply and Pure Sunfarms will be taking advantage of the favourable resulting spot market. At the same time, Pure Sunfarms is building inventory to ensure a consistent supply under its own brand directly to provincial boards, to whom it expects to begin shipping in the coming weeks."
"As Pure Sunfarms continues to execute on plan toward becoming one of the largest, vertically integrated cannabis suppliers in Canada, independent of our Canadian joint venture Village Farms is now looking to new, higher value crop opportunities in the U.S. and beyond, including the significant potential near-term opportunity around hemp in the U.S., as well as cannabis in Mexico. With one of the largest existing greenhouse footprints in the U.S., strong existing partnerships in Mexico, and a 30-year proven track record as a large-scale, low-cost greenhouse operator, Village Farms has an unmatched platform to capitalize on these new opportunities."