Accelerated production plan for Pure Sunfarms
“In addition, Pure Sunfarms’ first supply agreement provides a strong initial revenue stream, while allowing the flexibility to pursue opportunities with government purchasers, as well as the significant near-term demand we are seeing from other licensed producers. With the advantage of Village Farms’ decades of experience designing, building and operating large-scale greenhouse facilities and Emerald’s deep cannabis expertise, I am more than confident in Pure Sunfarms’ ability to steadily ramp up production in the 17 grow rooms within the 1.1 million square foot Delta 3 facility and consistently deliver high-quality and fulfill large-volume supply commitments.”
“In our produce business, while volumes from our Ontario partners were on target, our first quarter results were impacted by lower yields at our Texas facilities, lower volumes from our Mexican supply partner, and slightly lower volumes at our Delta, BC operations, as we have not yet fully replaced the capacity from the transfer of the Delta 3 facility to Pure Sunfarms. This capacity will be fully replaced by the Fall of this year. As a result, we were unable to benefit from favourable spot market pricing as our full production was committed to contracted-price retail customers. On the cost side, we experienced an approximately 25% increase in pound-for-pound freight costs due to new US regulation as of December requiring freight companies to install Electronic Logging Devices. This initial surge in freight costs, which impacted transportation costs in the US across all industries, have since subsided to single digit year-on-year increases.”
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