Village Farms Purchases Emerald's Pure Sunfarms Stake For CA$80M

Village Farms International Inc. VFF VFF agreed to purchase Emerald Health Therapeutics Inc.'s EMH EMHTF stake in the joint venture for CA$79.9 million.

The company confirmed Tuesday it would obtain some 36.9 million of Pure Sunfarms Corp.'s common shares owned by Emerald.

Village Farms is Pure Sunfarms' controlling shareholder.

The acquired stake represents roughly 41.3% of all the joint venture's issued and outstanding common shares.

The purchase price includes CA$60 million (US$45.8 million) in cash and a CA$19.9 million (US$15.2 million) promissory note payable in six months, once the transaction is finalized.

The acquisition is scheduled to close in late October, the press release said.

The Vancouver-based company also confirmed it has secured US$49.8 million in financing through a registered direct offering of its shares.

Village Farms and Emerald Health settled their disputes over the joint venture earlier this year and named Village Farms the controlling shareholder.

"With this transaction, Village Farms and its shareholders will fully participate in the financial success of Canada's premier cannabis supplier," said Village Farms CEO Michael DeGiglio.

Meanwhile, Pure Sunfarms saw its retail market volume increasing by 179% in the fourth quarter of 2019. Moreover, its revenue in the retail market spiked by 118% over the same period.

The fourth quarter of last fiscal year was Pure Sunfarms' fifth consecutive quarter of profitability, explained Emerald's President and CEO Riaz Bandali.

Last month, Pure Sunfarms commenced shipping its Cannabis 2.0 and bottled oil products to British Columbia. The JV said that shipments to Ontario and Alberta would start soon.