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Village Farms International Reports Third Quarter 2019 Financial Results – Canadian Cannabis JV, Pure Sunfarms, Achieves Fourth Consecutive Quarter of Positive EBITDA, All-In Cost of Production of C$0.63 per Gram, Gross Margin of 69% and EBITDA Margin of 56%

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Village Farms International, Inc. (“Village Farms” or the “Company”) (TSX: VFF) (NASDAQ: VFF) today announced its financial results for the third quarter and nine-month period ended September 30, 2019.  All figures are in U.S. dollars unless otherwise indicated.

Village Farms’ Financial and Corporate Highlights for the Third Quarter Ended September 30, 2019
(All comparable figures are for the third quarter ended September 30, 2018)

  • Produce sales were US$38.3 million compared with US$39.7 million;
  • Net loss before tax of (US$6.5 million) and included the loss from Pure Sunfarms Corp. (“Pure Sunfarms”) of (US$0.9 million) (Village Farms’ share based on its 50% ownership).  This compares with a net loss before tax of (US$2.7 million);
  • Loss per share was (US$0.10) compared with loss per share of (US$0.04);
  • EBITDA loss was (US$2.4 million), including the positive contribution from Pure Sunfarms of US$5.0 million (C$6.6 million) (Village Farms’ 50% share).  This compares with an EBITDA loss of (US$2.0 million); and
  • Subsequent to quarter end, completed a bought deal offering of 3,059,000 common shares at a price of C$9.40 per share for aggregate gross proceeds to the Company of C$28,754,600.

Third Quarter Financial Results for Village Farms’ Canadian Cannabis Joint Venture, Pure Sunfarms
(There were are no comparable results for the third quarter ended September 30, 2018 as no production existed.)

  • Net sales (before Village Farms’ 50% share), which consisted entirely of dried cannabis sold predominantly to other licensed producers, were C$24.0 million (US$18.1 million).  Late in the third quarter, Pure Sunfarms began shipping branded packaged product to the Ontario Cannabis Store (“OCS”);
  • Sales for the third quarter did not include C$7.2 million that was invoiced to Emerald Health Therapeutics (see “Update on Pure Sunfarms’ Supply Agreement with Emerald Health Therapeutics” below);
  • Cost of goods sold (“all in cost”) per gram was C$0.63 (US$0.48) per gram;
  • Gross margin was 69%;
  • Selling, general and administrative expenses (before Village Farms’ 50% share) of C$3.7 million (US$2.8 million) or 12% of revenue;
  • Net loss (before Village Farms’ 50% share) of (C$2.4 million) ((US$1.8 million)) which included the non-cash impact of a net charge of (C$12.6 million) due to a change in value of the biological asset; and,
  • EBITDA (before Village Farms’ 50% share) was C$13.3 million (US$10.1 million), marking Pure Sunfarms’ fourth consecutive quarter of positive EBITDA and resulting in an EBITDA margin of 56%.

Recent Highlights for Village Farms’ Canadian Cannabis Joint Venture, Pure Sunfarms

  • Pure Sunfarms was the top performing brand of dried flower by both kilograms sold and dollar sales with the OCS in October 2019, achieving 16% market share (by kilograms sold).  Pure Sunfarms’ dried flower products outsold the second ranked dried flower brand’s products two to one (by kilograms sold).  In addition:
    • Pure Sunfarms’ Afghan Kush was the top selling dried flower product with the OCS in October;
    • Three of the seven top selling dried flower products with the OCS in October were Pure Sunfarms products

      Pure Sunfarms shipped its first order of branded dried cannabis products to the OCS in late September (followed by multiple reorders) following receipt from Health Canada on September 6, 2019 of the amendment to its license permitting it to sell and distribute packaged, branded dried cannabis products directly to provincial/territorial wholesalers and authorized private retailers in Canada;
  • In B.C., Pure Sunfarms’ sold out its first order to the BC Liquor Distribution Branch (“BCLDB”) (which has since re-ordered) in under three weeks to rank among the top ten brands by sales for all product categories in October.  Pure Sunfarms began selling branded, packaged dried cannabis products to the BCLDB in October following entry into a supply agreement in September;
  • Completed installation of extraction equipment (with processing capacity of 35,000 kilograms of biomass annually) in its new 65,000 square foot state-of-the-art processing center within the Delta 3 greenhouse facility in preparation for Cannabis 2.0. The processing centre has been designed for full GMP compliance and certification to allow for future exportation, and is expected to be operational as soon as possible, subject to Health Canada licensing and in-house calibration and testing;
  • Achieved full run-rate annual production of 75,000 kilograms of dried cannabis at its 1.1 million square foot Delta 3 greenhouse facility; and
  • Commenced conversion of the interior of its second 1.1 million square foot greenhouse operation, the Delta 2 greenhouse facility, for cannabis production, which is conservatively expected to double Pure Sunfarms’ annual output at full production to more than 150,000 kilograms.  Conversion of the Delta 2 greenhouse facility, which has been designed for full GMP compliance and certification to all for future exportation, remains on schedule, with cannabis production expected to commence during the second quarter of 2020 and the facility is expected to be operating at full run rate production by the end of 2020.  Pure Sunfarms has submitted to Health Canada its application for the initial Cultivation License for the Delta 2 greenhouse facility.

Recent Highlights for Village Farms’ U.S. Hemp/CBD Program

The Company’s joint ventures for outdoor hemp production and processing in the U.S. recently completed harvesting of approximately 625 acres of the approximately 870 acres of hemp planted in 2019, achieving an average yield of approximately 1,600 pounds per acre harvested, well in excess of its projections. The Company expects to commence sales of hemp biomass as early as the fourth quarter of 2019.

“We are pleased to report another quarter in which Pure Sunfarms continued to set the standard for performance as a best-in-class cannabis operation, which again drove strong financial performance,” said Michael DeGiglio, Chief Executive Officer, Village Farms.  “Pure Sunfarms’ achieved its fourth consecutive quarter of positive EBITDA, with an industry leading all-in cost of production of C$0.63, gross margin of 69% and EBITDA margin of 56%.  In the 12 months since adult-use cannabis was legalized in Canada in October 2018, Pure Sunfarms has already generated C$47 million in EBITDA, an especially impressive number given that its operations were ramping up throughout most of that period.”

“Pure Sunfarms is now proving itself as a leading cannabis brand, ranking as the number one selling dried flower brand by a wide margin with the Ontario Cannabis Store in October, and having the overall top selling dried flower product, as well as three of the seven top-selling dried flower product. We look forward to Pure Sunfarms building on this tremendous initial success as it launches its pre-rolled dried products, adds provincial supply agreements, starts its extraction operations online for the roll out of oils and other new product forms under Cannabis 2.0 in the first half of next year, and more than doubles its output, further supporting its low production costs.”

“Pure Sunfarms continues to execute very well on what is under its control.  Even as one of the largest Canadian adult-use cannabis suppliers by dollars sold, third quarter sales were constrained by the limited physical retail store infrastructure in Canada, as well as the C$7.2 million that could not be recognized. We built Pure Sunfarms, however, for profitability out of the gate, even in a commoditized environment, and it is one of the few and most profitable Canadian cannabis companies.  With industry-leading cost production and a brand and products that are clearly resonating with consumers, Pure Sunfarms remains well positioned to continue to be a dominant supplier as the Canadian adult-use cannabis market continues to develop and expand.”

“In our U.S. outdoor hemp program, we recently completed harvest of our 2019 crop, highlighted by yields that were well above our projections.  We remain on track to begin generating profitable hemp sales as early as the fourth quarter of this year.  Importantly, our first growing season has provided significant learnings that will be invaluable going forward.  In our greenhouse hemp program, we continue to work with Texas Department of Agriculture on the implementation of its hemp regulatory framework subject to the recently published US Department of Agriculture rules and are optimistic that licensing could commence in the first quarter of 2020.  As we did in Canada with Pure Sunfarms, we are building a rock-solid foundation of exceptional growing operations from which to aggressively pursue our objective to launch our own white-labelled and branded CBD products in 2020.”

“In our produce business, we continue to make steady progress in the transition of the production displaced for cannabis and hemp production to third-party growing partners, recently adding approximately 120 acres with partners in Mexico and Canada to bring the total to nearly 300 acres.  During this period of transition, we will continue to experience some impact on our financial results, more so in some quarters than others, which in the third quarter contributed to a net loss for the produce business of US$5.1 million.”

Update on Pure Sunfarms’ Supply Agreement with Emerald Health Therapeutics

Pursuant to the terms of a Supply Agreement that Pure Sunfarms has with Emerald Health, Emerald has an obligation to purchase 40% of Pure Sunfarms cannabis production at a fixed price, subject to the terms and conditions of the Supply Agreement. To the extent that Emerald does not fulfill its purchase obligation, Pure Sunfarms is able to sell that excess production to other parties in the open market. The Supply Agreement stipulates that Emerald is required to pay Pure Sunfarms the difference between the fixed price and the selling price realized from other parties.  During the quarter ended September 30, 2019, Emerald did not fulfill its purchase obligation and Pure Sunfarms sold the product on the open market to arm’s length parties at prices lower than the fixed price in the Supply Agreement. As a result, under the terms of the Supply Agreement, Pure Sunfarms billed Emerald for the difference which amounted to approximately C$7.2 million. On October 15, 2019, Emerald issued a press release that indicated they do not agree that they have any liability with respect to these amounts.

Under IFRS 15 – Revenue from contracts with customers (paragraph 9 (e))a customer needs to have an intent and ability to pay in order for a company to recognize revenue. Given that Emerald has issued a press release indicating that they do not agree that they have a liability with respect to these amounts, Pure Sunfarms has determined that all of the criteria under IFRS 15 to recognize this revenue were not met as Emerald has demonstrated that they do not have an intent to pay, and as a result has not recorded the revenue related to these amounts.

We understand that Emerald is in the process of investigating its liability to Pure Sunfarms.  If Emerald does not agree to the liability, Pure Sunfarms has reserved the right to take such actions as it considers necessary and appropriate to recover its losses from Emerald for non-payment of amounts owing under the Supply Agreement.   If Emerald were to agree to the liability in the future, such liability would be recognized in the revenue and profits of Pure Sunfarms, at such time in accordance with generally accepted accounting principles.

Summary Statutory Results
(in thousands of U.S. Dollars unless otherwise indicated)

For the three months
ended September 30,

For the Nine months
ended September 30,

2019

2018

2019

2018

Produce sales

$38,293

$39,684

$111,512

$111,213

Cost of sales

(38,866)

(36,862)

(114,711)

(103,915)

Selling, general and administrative expenses

(3,739)

(3,442)

(11,682)

(10,486)

Stock compensation expense

(868)

(190)

(3,190)

(447)

Change in biological asset (1)

(627)

(1,189)

(97)

(992)

Loss from operations

(5,807)

(1,999)

(18,168)

(4,627)

Interest expense, net

(393)

(618)

(1,503)

(1,906)

Foreign exchange gain (loss)

(183)

(73)

338

(87)

Other income, net

69

17

219

61

Share of income (loss) from joint ventures

(171)

(28)

17,939

(369)

Gain on disposal of assets

(8)

13,558

(Provision for) recovery of income taxes

1,421

712

81

1,513

Net income (loss)

(5,072)

(1,989)

12,464

(5,415)

Consolidated EBITDA (2)

2,383

897

8,256

1,394

Earnings (loss) per share – basic

($0.10)

($0.04)

$0.26

($0.12)

Earnings (loss) per share – diluted

($0.10)

($0.04)

$0.25

($0.12)

Summary Results Including Joint Ventures, on a Proportionate Basis

The following results reflect the Company’s proportionate share of the Pure Sunfarms joint venture operations, as this is the basis on which management bases its operating decisions and performance.  For a reconciliation to the results in accordance with International Financial Reporting Standards (“IFRS”) refer to the “Reconciliation of IFRS to Proportionate Results” as presented below and in Management’s Discussion & Analysis (“MD&A”).

(in thousands of U.S. Dollars unless otherwise indicated)

For the three months
ended September 30,

For the six months
ended September 30,

2019(3)

2018(3)

2019(3)

2018(3)

Consolidated sales

$47,335

$39,779

$138,076

$111,308

Cost of sales

(41,711)

(36,934)

(121,443)

($103,987)

Selling, general and administrative expenses

(5,376)

(3,756)

(14,860)

(11,302)

Change in biological asset (1)

(4,057)

(921)

6,873

(564)

Gain on disposal of assets

(8)

13,558

Net income (loss)

(5,072)

(1,989)

12,464

(5,415)

EBITDA(2)

$2,377

$897

$8,256

$1,394

Earning (loss) per share – basic

($0.10)

($0.04)

$0.26

($0.12)

Earning (loss) per share – diluted

($0.10)

($0.04)

$0.25

($0.12)

Notes:

(1)

Biological asset consists of the Company’s produce on the vines and Pure Sunfarms’ crop at the period end.  Details of the changes are described in note 5 of the Company’s interim condensed consolidated financial statements for the nine months ended September 30, 2019.

(2)

EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by IFRS.  Therefore, EBITDA may not be comparable to similar measures presented by other issuers.  See “Non-IFRS Measures”.  Management believes that EBITDA is a useful supplemental measure in evaluating the performance of the Company. Consolidated EBITDA includes the Company’s 50% interest in Pure Sunfarms, 65% interest in VFH and 60% (effective 63.25% with VFH interest) interest in AVGGH.

(3)

The consolidated financial results above reflect the proportionate share of the Company’s share of revenues and expenses from its joint venture operations, as this is the basis which management bases its operating decisions and performance evaluation.  IFRS does not allow for the inclusion of the joint venture on a proportionate basis.  These results include additional non-IFRS measures such as EBITDA.

The results are not generally accepted measures of financial performance under IFRS.  The Company’s method of calculating these financial performance measures may differ from other companies and accordingly, they may not be comparable to measures used by other companies.  Refer to the MD&A for a reconciliation of these non-IFRS measures and proportionate results.

Financial Highlights
(All amounts in U.S. Dollars unless otherwise indicated.)

Cannabis

For the three months ended September 30, 2019.  There are no comparable results for the three months ended September 30, 2018 as no production existed.

The Company’s 50% share of net sales of Pure Sunfarms for the three months ended September 30, 2019 was $9,042.  Total Pure Sunfarms sales consisted of close to approximately 12,000 kilograms of flower and trim sold at an average selling price of over $1.50 per gram (C$2.00 per gram) during the three months ended September 30, 2019. Sales for the three months ended September 30, 2019 were predominantly to other licensed producers and do not include $5.4 million (C$7.2 million) invoiced to Emerald that was not able to be recognized as per the discussion above.

The Company’s 50% share of cost of sales of Pure Sunfarms for the three months ended September 30, 2019 was $2,845.

The Company’s 50% share of selling, general and administrative expenses of Pure Sunfarms for the three months ended September 30, 2019 was $1,415.

The Company’s 50% share of net loss for the three months ended September 30, 2019 was ($918) compared to ($28) for the three months ended September 30, 2018.  The net loss for the three months ended September 30, 2019 is due to a change in the biological asset of ($4.8 million).

The Company’s 50% share of EDITDA for the three months ended September 30, 2019 was $5,033 compared to ($12) for the three months ended September 30, 2018.

For the nine months ended September 30, 2019.  There are no comparable results for the nine months ended September 30, 2018 as no production existed

The Company’s 50% share of net sales of Pure Sunfarms for the nine months ended September 30, 2019 was $26,564.  Total Pure Sunfarms sales consisted of close to 24,600 kilograms of flower and trim during the nine months ended September 30, 2019, at an average sales price of approximately $2.15 per gram (C$2.85 per gram).

The Company’s 50% share of cost of sales of Pure Sunfarms for the nine months ended September 30, 2019 was $6,732 (based on total grams sold of close to 24,600 kilograms), or approximately $0.55 per gram (C$0.73 per gram).

The Company’s 50% share of selling, general and administrative expenses of Pure Sunfarms for the nine months ended September 30, 2019 was $2,808 and primarily consisted of personnel costs and Health Canada fees.

Income from operations for the Company’s 50% share of Pure Sunfarms was $22,658 for the nine months ended September 30, 2019.

The Company’s 50% share of net income for the nine months ended September 30, 2019 was $17,342 versus a loss of ($369) for the nine months ended September 30, 2018.

The Company’s 50% share of EBITDA for the nine months ended September 30, 2019 was $17,704 versus ($363) for the same period in 2018.

Produce

For the three months ended September 30, 2019 compared to the three months ended September 30, 2018.

Sales for the three months ended September 30, 2019 decreased by ($1,391), or (4%), to $38,293 from $39,684 for the three months ended September 30, 2018.  The decrease in sales is primarily due to a decrease in the Company’s product volume, as well as a decrease in supply partner revenue.

Cost of sales for the three months ended September 30, 2019 increased by $2,004, or 5%, to $38,866 from $36,862 for the three months ended September 30, 2018, primarily due to an increase in cost per pound from the Texas facilities, which is due to production issues that caused decreases in production.  The decrease in production for the crop causes an increase in cost per pound as most costs are fixed and, as production decreases, cost per pound increases.

For the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018.

Sales for the nine months ended September 30, 2019 increased $299, or less than 1%, to $111,512 compared to $111,213 for the nine months ended September 30, 2018.   The increase in net sales is due to an increase in supply partner revenues of 12% over the comparable period in 2018 partially offset by a (14%) decrease in the Company’s production volume.  The decrease in the Company’s production volume is primarily due to a clean-out in one of Company’s facilities (which did not occur in the last three years) and ongoing virus pressure at the Company’s Texas facilities.

Cost of sales for the nine months ended September 30, 2019 increased $10,796, or 10%, to $114,711 from $103,915 for the nine months ended September 30, 2018, due to an increase in supply partner purchases of 12% and an increase in the cost per pound of the Company’s own grown product in Texas due to decreased pounds and higher labor costs, due to the higher utilization of hourly rate contract laborers versus Village Farms’ employees for the 2018/2019 crop as compared to the prior crop.

Consolidated EBITDA

EBITDA for the three months ended September 30, 2019 increased by $4,339 to $5,236 from $897 for the three months ended September 30, 2018. The increase is primarily as a result of an increase in the Company’s share of EDITDA from Pure Sunfarms of $7,886 partially offset by an increase in the loss from operations for the Company’s produce business.

EBITDA for the nine months ended September 30, 2019 increased $9,713 to $11,109 from $1,394 for the nine months ended September 30, 2018, primarily as a result of an increase in the Company’s share of income from Pure Sunfarms (Pure Sunfarms EBITDA – $20,558) partially offset by an increase in the loss from the Company’s produce business.

Non-IFRS Measures

References in this MD&A to “EBITDA” are to earnings before interest, taxes, depreciation, amortization, foreign currency exchange gains and losses on translation of long-term debt, unrealized gains on the changes in the value of derivative instruments, unrealized change in biological asset, stock compensation, and gains and losses on asset sales.  EBITDA is a cash flow measure that is not recognized under IFRS and does not have a standardized meaning prescribed by IFRS. Therefore, EBITDA may not be comparable to similar measures presented by other issuers. Investors are cautioned that EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS as an indicator of the Company’s performance or to cash flows from operating, investing and financing activities as measures of liquidity and cash flows. Management believes that EBITDA is an important measure in evaluating the historical performance of the Company.

Reconciliation of Net Income to EBITDA

The following table reflects a reconciliation of net income to EBITDA, as presented by the Company:

(in thousands of U.S. dollars)

For the three months
ended September 30, 

For the nine months
ended September 30,

2019

2018

2019

2018

Net income (loss)  

($5,072)

($1,989)

$12,464

($5,415)

Add:

Amortization

1,818

1,748

5,587

5,271

Foreign currency exchange loss (gain) 

183

73

(338)

87

Interest expense, net

393

618

1,503

1,906

Income taxes (recovery)

(1,421)

(712)

(81)

(1,513)

Stock based compensation

868

190

3,190

447

Change in biological asset

627

1,189

97

992

Change in biological asset for JV’s

3,430

(267)

(6,970)

(428)

Interest expense for JV’s

249

446

Amortization for JV’s

244

37

668

37

Foreign currency exchange loss (gain) for JV’s

(7)

10

(14)

10

Income taxes (recovery) from JV’s

1,057

5,262

Gain on disposal of assets

8

(13,558)

EBITDA

$2,377

$897

$8,256

$1,394

EBITDA for JV’s (See table below)

$4,806

($248)

$17,331

($750)

EBITDA excluding JVs(produce)

($2,429)

$1,145

($9,076)

$2,144

Breakout of JV’s EBITDA

(in thousands of U.S. dollars)

For the three months
ended September 30, 

For the nine months
ended September 30,

2019

2018

2019

2018

Pure Sunfarms EBITDA

$5,033

($248)

$17,704

($750)

VFH EBITDA

(204)

(330)

AVGGH EBITDA

(23)

(43)

Total JV’s EBITDA

$4,806

($248)

$17,331

($750)

Reconciliation of IFRS to Proportionate Results

The following tables are a reconciliation of the IFRS results to the proportionate results (which include the Company’s proportionate share of the Pure Sunfarms operations):

For the three months ended September 30, 2019

Produce

PSF(4)

Hemp(4)

Total

Sales

$38,293

$9,042

$-

$47,335

Cost of sales

(38,866)

(2,845)

(41,711)

Selling, general and administrative expenses

(3,739)

(1,415)

(222)

(5,376)

Stock compensation expense

(868)

(868)

Change in biological asset (5)

(627)

(4,765)

1,336

(4,056)

Other income (expense) net

(507)

(140)

(99)

(746)

(Provision for) recovery of income taxes

1,421

(794)

(268)

359

Net income (loss)

($4,901)

($918)

$747

($5,072)

EBITDA (6)

($2,422)

$5,033

($227)

$2,383

Earnings (loss) per share – basic

($0.10)

($0.02)

$0.02

($0.10)

Earnings (loss) per share – diluted

($0.10)

($0.01)

$0.01

($0.10)

For the three months ended September 30, 2018

Produce

PSF(4)

Hemp(4)

Total

Sales

$39,684

$95

$39,779

Cost of sales

(36,862)

(72)

(36,934)

Selling, general and administrative expenses

(3,442)

(314)

(3,756)

Stock compensation expense

(190)

(190)

Change in biological asset (5)

(1,189)

268

(921)

Other income (expense) net

(674)

(5)

(679)

Recovery of income taxes

712

712

Net income (loss)

($1,961)

($28)

($1,989)

EBITDA (6)

$1,145

($248)

$897

Earnings (loss) per share – basic

($0.03)

($0.01)

($0.04)

Earnings (loss) per share – diluted

($0.03)

($0.01)

($0.04)

For the nine months ended September 30, 2019

Produce

PSF(4)

Hemp(4)

Total

Sales

$111,512

$26,568

$138,076

Cost of sales

(114,711)

(6,732)

(121,443)

Selling, general and administrative expenses

(11,682)

(2,808)

(370)

(14,860)

Stock compensation expense

(3,190)

(3,190)

Change in biological asset (5)

(97)

5,634

1,336

6,873

Gain on disposal of assets

13,558

13,558

Other income (expense) net

(946)

(273)

(150)

(1,369)

(Provision for) recovery of for income taxes

81

(5,043)

(219)

(5,181)

Net income (loss)

($5,475)

$17,342

$597

$12,464

EBITDA (6)

($9,076)

$17,704

($373)

$8,256

Earnings (loss) per share – basic

($0.11)

$0.36

$0.01

$0.26

Earnings (loss) per share – diluted

($0.11)

$0.34

$0.01

$0.25

For the nine months ended September 30, 2018

Produce

PSF(4)

Hemp(4)

Total

Sales

$111,213

$95

$-

$111,308

Cost of sales

(103,915)

(72)

($103,987)

Selling, general and administrative expenses

(10,486)

(816)

(11,302)

Stock compensation expense

(447)

(447)

Change in biological asset (5)

(992)

428

(564)

(Gain) loss on sale of assets

Other income (expense) net

(1,932)

(5)

(1,937)

Recovery of income taxes

1,513

1,513

Net income (loss)

($5,046)

($369)

$-

($5,415)

EBITDA (6)

$2,149

($750)

$-

$1,394

Earnings (loss) per share – basic

($0.11)

($0.01)

$-

($0.12)

Earnings (loss) per share – diluted

($0.11)

($0.01)

$-

($0.12)

Notes:

(4)

The adjusted consolidated financial results have been adjusted to include the Company’s share of revenues and expenses from its Pure Sunfarms and Hemp joint ventures on a proportionate accounting basis, on which management bases its operating decisions and performance evaluation.  IFRS does not allow for the inclusion of the Joint Venture on a proportionate basis.  These results include additional non-IFRS measures such as EBITDA.

The adjusted results are not generally accepted measures of financial performance under IFRS.  The Company’s method of calculating these financial performance measures may differ from other companies and accordingly, they may not be comparable to measures used by other companies.  Refer to the MD&A for a reconciliation of these non-IFRS measures and adjusted results.

(5)

Biological asset consists of the Company’s produce on the vines and Pure Sunfarms’ crop at the period end.  Details of the changes are described in note 5 of the Company’s interim condensed consolidated financial statements for the nine months ended September 30, 2019.

(6)

EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by IFRS.  Therefore, EBITDA may not be comparable to similar measures presented by other issuers.  See “Non-IFRS Measures”.  Management believes that EBITDA is a useful supplemental measure in evaluating the performance of the Company. Consolidated EBITDA includes the Company’s 50% interest Pure Sunfarms, 65% interest in VFH and 60% (effective 63.25% with VFH interest) interest in AVGGH.

Conference Call

Village Farms’ management team will host a conference call Friday, November 15, 2019 at 8:30 a.m. ET to discuss its third quarter 2019 financial results.  Participants can access the conference call by telephone by dialing (647) 427-7450 or (888) 231-8191, or via the Internet at: https://bit.ly/2Wm7dxj.

For those unable to participate in the conference call at the scheduled time, it will be archived for replay both by telephone and via the Internet beginning approximately one hour following completion of the call. To access the archived conference call by telephone, dial (416) 849-0833 or (855) 859-2056 and enter the passcode 4987345 followed by the pound key. The telephone replay will be available until Friday, November 22, 2019 at midnight (ET).  The conference call will also be archived on Village Farms’ website at http://villagefarms.com/investor-relations/investor-calls.

Cannabis

City View Green Holdings Inc. Provides Update on Its 1st Quarter Filings

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Toronto, Ontario–(Newsfile Corp. – July 3, 2020) – City View Green Holdings Inc. (CSE: CVGR) (OTCQB: CVGRF) (“City View” or the “Company“), trading through the facilities of the Canadian Securities Exchange (“CSE“) under the symbol “CVGR” and on the OTCQB® under the symbol “CVGRF” – Following its press releases of April 28, 2020, and May 28, 2020, the Company is providing a further update on the status of filing of its first-quarter consolidated interim financial statements, accompanying management’s discussion and analysis, and related CEO and CFO certificates for the three month period ended March 31, 2020 (collectively, the “First-Quarter Filings“).

On March 18, 2020, the Canadian Securities Administrators announced that they would provide issuers with a 45-day filing extension for filings required on or before June 1, 2020, as a result of COVID-19 pandemic. As such, the Ontario Securities Commission has enacted Ontario Instrument 51-502 – Temporary Exemption from Certain Corporate Finance Requirements dated March 23, 2020 (“OI 51-502“). In its April 28 and May 28, 2020 press releases, the Company announced its reliance on the exemption with respect to extending the deadline of filing its First Quarter Filings, which are required to be filed by June 1, 2020 under sections 4.3 and 4.4 of National Instrument 51-102 – Continuous Disclosure Obligations. The Company is continuing to work diligently and currently expects to have the First-Quarter Filings filed on or prior to the extended filing deadline of July 16, 2020.

As required by OI 51-502, and similar Instruments and Orders enacted in British Columbia and Alberta, the Company discloses the following:

  • Until such time as the Company has filed the First-Quarter Filings, members of management and other insiders are subject to a trading black-out policy that reflects the principles in section 9 of National Policy 11-207 – Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.

  • The Company confirms that there have been no material business developments, other than those announced through news releases, since June 15, 2020, when the Company filed its audited financial statements for the fiscal year ended December 31, 2019.

About City View

City View Green is a leading cannabis-infused food company focused on the development of food brands, extraction and distribution. Upon the anticipated receipt of its Cannabis Act processing and sales licences (“Cannabis Licences“), City View will incorporate cannabis-infused food production and extraction at its Brantford, Ontario facility. Once operational, it is our expectation that City View will produce high quality cannabis-infused food, oils, distillates, and water-soluble products for the food and beverage markets. In addition, City View owns a 19.9% stake in Budd Hutt Inc. (“Budd Hutt“), a retail-focused cannabis company with access to cannabis cultivation and production licences in Alberta and other retail opportunities across Canada. Through its relationship with Budd Hutt, the Company anticipates securing shelf space, product placement, and distribution opportunities for City View’s products. For more information visit www.cityviewgreen.ca.

For further information contact:
City View Green Holdings Inc.
Rob Fia, CEO & President
Email: rob@cityviewgreen.ca

Neither the Canadian Securities Exchange nor its regulations services accept responsibility for the adequacy or accuracy of this release.

Disclaimer for Forward-Looking Information

This press release contains forward-looking statements which are not composed of historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management’s expectations. There are a number of important factors that could cause the Company’s actual results to differ materially from those indicated or implied by forward-looking statements and information. When relying on the Company’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Important factors that could cause actual results to differ materially from the Company’s expectations include, among others, availability and costs of financing needed in the future, changes in equity markets, delays in the development of projects, and ability to predict or counteract potential impact of COVID-19 coronavirus on factors relevant to the Company’s business. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/59129

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Red Light Holland Names Medical and Scientific Division

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Toronto, Ontario–(Newsfile Corp. – July 3, 2020) – Red Light Holland Corp. (CSE: TRIP) (FSE: 4YX) (“Red Light Holland” or the “Company“), an Ontario-based corporation positioning itself to engage in the production, growth and sale of a premium brand of magic truffles to the legal, recreational market within the Netherlands, is pleased to announce the naming and establishment of its medical and scientific division, “Scarlette Lillie Science and Innovation.” The establishment of Scarlette Lillie Science and Innovation marks an early move by Red Light Holland, to position itself to expand its business into the medical psychedelics market in the future, at such time as market and regulatory conditions present a viable business opportunity.

“While we are focusing on the recreational truffles market in the Netherlands, we are also keen on the medical market, in which we see tremendous future opportunities for Red Light Holland to help make a larger, positive change in the world,” said Todd Shapiro, the Company’s Chief Executive Officer and Director. “Scarlette Lillie Science and Innovation is named after Scarlette, my nine-month old daughter, and Lillie, the daughter of the Company’s President, Hans Derix. And so this is indeed a very proud day for both the Company, and for Hans and myself. As fathers, we want to see a better future for both of them, and for your family’s as well. We firmly believe we need more research and development into psilocybin and its potential benefits. We absolutely look forward to being an official part of that process,” added Mr. Shapiro.

Scarlette Lillie Science and Innovation is expected to be funded by a portion of Red Light Holland’s available funds from time to time, and once operational, is expected to allow Red Light Holland to initiate and expedite various science, innovation and research activities focused on, among other things, exploring the potential medical and health benefits of psilocybin and whole fungi-medicine.

Dr. Joseph Geraci, Advisor of Red Light Holland and Chief Executive Officer of Netramark Corp., added: “I’m pleased to help advise and work closely with Scarlette Lillie Science and Innovation. This division aligns tremendously well with the over two decades of efforts that I’ve personally and professionally made within neuroscience, psychiatry and important research and data collection. I believe that working with psilocybin can have an impact in helping with mood disorders and beyond. I look forward to being a part of this synergistic mission to prove these theories out, and I’m also excited to introduce my contacts from the science and medical fields to our team of visionaries.”

About Red Light Holland Corp.

The Company is an Ontario-based corporation positioning itself to engage in the production, growth and sale (through existing Smart Shops operators and an advanced e-commerce platform) of a premium brand of magic truffles to the legal, recreational market within the Netherlands, in accordance with the highest standards, in compliance with all applicable laws.

For additional information on the Company:

Todd Shapiro
Chairman and Chief Executive Officer
Tel: 647-204-7129
Email: todd@redlighttruffles.com
Website: https://redlighttruffles.com/

Forward-Looking Statements

Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “potential”, “believe”, “intend” or the negative of these terms and similar expressions. Forward-looking statements necessarily involve known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Readers are further cautioned that the assumptions used in the preparation of such forward-looking statements (including, but not limited to, the assumption that (i) the Company will be able to execute on its business plan and/or enter into the medical psychedelics market as proposed, (ii) the Company will receive one or multiple licenses, permits, and authorizations from time to time necessary to execute on its business plan and/or enter into the medical psychedelics market, (iii) the Company’s financial condition and development plans do not change as a result of unforeseen events, (iv) there will continue to be a demand, and market opportunity, for the Company’s product offerings, (v) the Company will be able to establish, preserve and develop its brand, and (iv) the Company will be successful in attracting and retaining required personnel), although considered reasonable by management of the Company at the time of preparation, may prove to be imprecise and result in actual results differing materially from those anticipated, and as such, undue reliance should not be placed on forward-looking statements. The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws. Forward-looking statements, forward-looking financial information and other metrics presented herein are not intended as guidance or projections for the periods referenced herein or any future periods, and in particular, past performance is not an indicator of future results and the results of the Company in this press release may not be indicative of, and are not an estimate, forecast or projection of the Company’s future results. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Not for distribution to United States newswire services or for dissemination in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/59094

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Cannabis

Tree of Knowledge International Corp. Provides Bi-Weekly Default Status Report

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Toronto, Ontario–(Newsfile Corp. – July 2, 2020) –  Tree of Knowledge International Corp. (CSE: TOKI) (the “Company” or “TOKI“) is providing a bi-weekly default status report (the “Default Status Report“) in accordance with National Policy 12-203 – Management Cease Trade Orders (“NP 12-203“) and further to the Company’s press release dated June 19, 2020.

On June 1, 2020, the Company announced (the “Default Announcement“) that, for the reasons disclosed in the Default Announcement, the filing of its audited annual financial statements, accompanying management discussion and analysis and related CEO and CFO certifications for the year ended December 31, 2019 (the “Annual Filings“) would not be completed by the prescribed filing deadline.

As a result of these delays and as further disclosed in the Company’s press releases, the Company proactively applied to its principal regulator, the Ontario Securities Commission (“OSC“), for a management cease trade order (“MCTO“), and the OSC granted the MCTO to the Company. The MCTO restricts all trading in securities of the Company, whether direct or indirect, by the Chief Executive Officer and the Chief Financial Officer of the Company until such time as the Annual Filings have been filed by the Company. The MCTO does not affect the ability of shareholders who are not insiders of the Company to trade their securities.

The Company’s board of directors and its management confirms that they are working expeditiously to meet the Company’s filing obligations and expect to file the Annual Filings on or about July 15, 2020.

As required by the alternative information guidelines specified by NP 12-203, the Company reports that since the Default Announcement and any subsequent press release disclosure there have not been any changes to the information set out in the Default Announcement that would reasonably be expected to be material to an investor nor any failure by the Company to fulfill its intentions as stated therein with respect to satisfying the provisions of the alternative information guidelines, and there are no additional defaults or anticipated defaults subsequent to the disclosure therein, other than the delay in filing the Annual Filings. Further, there is no additional material information concerning the affairs of the Company that has not been generally disclosed and there are no insolvency proceedings against the Company as of the date of this Default Status Report.

Until the Annual Filings have been filed, the Company intends to continue to satisfy the provisions of the alternative information guidelines set out in NP 12-203 by issuing bi-weekly default status reports in the form of further press releases, which will also be filed on SEDAR. To the extent applicable, the Company is scheduled to file its next default status report in two weeks from the date hereof.

For further information please visit: www.tokicorp.com

Or contact: Tree of Knowledge International Corp.

Ashley Villarruel, (647) 607-9044), ashley@tokicorp.com

About Tree of Knowledge

TOKI is a public company that delivers pathways to innovative, science-based health and wellness solutions. The Company is a leader in pain management, spanning from seed to patient. Built upon an extensive network of scientific and medical research, TOK is an advanced leader in the development, processing, and distribution of focused products and treatments for pain relief. Tree of Knowledge spans the globe with its multidisciplinary pain clinics, research partners, consumer CBD products, and education and advocacy programs – all working in harmony to bring health and wellness to the world, while creating value for shareholders and partners.

Forward Looking Statements

Except for statements of historical fact relating to the Company, certain information contained herein relating to the timing of the filing of financial statements constitutes forward-looking statements. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The forward-looking information contained in this news release is expressly qualified by this cautionary statement. Except as required by applicable securities laws, the Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAS REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/59090

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