Village Farms's marijuana joint venture with Emerald Health Therapeutics is named Pure Sunfarms Corp. This was announced yesterday in the greenhouse grower's Second Quarter Report.
According to Village Farms' CEO Mike DeGiglio, "growing in large-scale, high-tech greenhouses with experienced large-scale master growers and large labour-force managers provides us with confidence that Pure Sunfarms can be the low-cost cannabis producer in Canada".
The CEO of one of North America's largest greenhouse produce companies, says that their marijuana spin-off targets a cost of production of less than $1.00 per gram. "...we believe (this) will be of critical importance when the market eventually commoditizes. Moreover, the use of existing facilities will minimize capital costs and provide speed to market to capitalize on the significant projected near-term shortfall in industry supply", DeGiglio said.
Village Farms will take out the vegetable crops at their glasshouses in Delta, British Columbia. "Immediately upon establishing the JV on June 6, the Village Farms and Emerald development teams began work toward conversion of the Delta 3 greenhouse and, completion of the application to Health Canada for a cultivation license for that site, leveraging Emerald's existing cultivation license through a "second stream" application, which Emerald expects to submit next month."
Village Farms continues focus on core produce operations
DeGiglio furthermore stressed out that Village Farms will remain a greenhouse produce grower, aside of their activities in the legal cannabis space. "In our core produce operations, we continue to focus on maximizing margins through exclusive higher-margin varieties and lowering our cost of production at our facilities, while continuing to grow the highest quality, safest, best tasting produce."
Village Farms sales for the second quarter were up 2% year-over year, befitting from a 7% increase in supply partner revenue due to an increase in our partners' growing area. This was partially offset by a 2% decrease in the Company's tomato pounds resulting from atypical low light levels in British Columbia this spring. "We continue to have success in managing production costs at our own facilities, which were held flat compared to the second quarter of last year and are down a meaningful 5% for the first half of 2017."