– Acquisition Provides a Substantial Presence in Considered one of Canada’s Largest Hashish Markets, Skilled, Québec-Primarily based Hashish Management and a Québec-Primarily based Manufacturing Facility –
VANCOUVER, BC, Nov. 15, 2021 /PRNewswire/ – Village Farms Worldwide, Inc. (“Village Farms” or the “Firm”) (NASDAQ: VFF) (TSX: VFF) immediately introduced it has acquired 70% possession of privately-held, Québec-based, ROSE LifeScience (“ROSE”), a number one vertically built-in branded hashish producer, provider and commercialization professional within the Province of Québec, efficient immediately (“Closing Date”). The transaction is valued at as much as C$46.7 million. ROSE turns into the Québec operational unit of Village Farms’ Canadian hashish enterprise section, with ROSE’s headquarters and the present group remaining in Québec.
ROSE is a number one third-party hashish merchandise commercialization professional within the Province of Québec, appearing because the unique, direct-to-retail gross sales, advertising and distribution entity for Entourage Well being, Sundial, Tilray and The Flowr Company and 10 Québec micro and craft growers all through Québec. ROSE additionally distributes to Québec retail its personal model of high-quality hashish merchandise. Tam Tams is grown and processed at ROSE’s Québec-based, Well being Canada-licensed 55,000 square-foot Managed Surroundings Agriculture (CEA), purpose-built facility in Huntingdon, which was commissioned in 2020. ROSE additionally allows a platform for commercialization within the Québec marketplace for a number of Québec-based micro-producers underneath its DLYS model.
Highlights of the Acquisition
- Provides a considerable presence within the Province of Québec as a hashish provider, producer and commercialization professional within the Province of Québec, which represents roughly 15%1 of complete Canadian retail hashish gross sales on the present annualized run charge of greater than C$627 million1, the overwhelming majority of which is dried flower and pre-rolled merchandise;
- Provides skilled, Québec-based business leaders who will be part of the Village Farms/Pure Sunfarms group, bolstering intensive current relationships within the Québec hashish market and leveraging specialised, deep expertise in each consumer-packaged items and controlled industries; and,
- Provides a Québec-based, 55,000 sq. foot, Well being Canada-licensed Managed Surroundings Agriculture (CEA) cultivation and processing facility, which is included within the transaction.
Village Farms Administration Commentary
“The acquisition of ROSE – by far probably the most profitable Québec-based hashish operator in our view – is a prudent and strategic means by which to enter, and quickly ramp gross sales, in one in all Canada’s largest provincial hashish markets,” mentioned Michael DeGiglio, CEO, Village Farms. “ROSE provides an distinctive group of Québec-based consultants to our Canadian hashish operations. The group has a confirmed observe document of success, and shares our perception within the significance of cultivation excellence, in addition to the benefit of innovation and steady enchancment. We stay up for constructing on ROSE’s sturdy basis within the Québec market, with a long-term dedication to the Firm’s Québec heritage.”
“ROSE instantly expands our attain to greater than 90%1 of all Canadian retail hashish gross sales and represents a significant step ahead in Pure Sunfarms’ technique to grow to be the main nationwide provider of hashish in Canada, with no less than a 20% market share within the dried flower class,” mentioned Mandesh Dosanjh, President and Chief Govt Officer, Pure Sunfarms. “ROSE may be very effectively revered within the Québec hashish business, with a popularity for management and model technique success that we’ve got come to know effectively and respect. We stay up for pursing the brand new alternatives, each near-term and long-term, created by the addition of ROSE as our Québec-based hashish operational unit.”
ROSE Administration Commentary
“We have now lengthy admired the success of Village Farms and Pure Sunfarms within the Canadian hashish business. We’re proud to hitch forces with them to speed up our successes, and seize this chance to additional evolve the business in our dwelling province of Québec,” mentioned Davide Zaffino, co-founder and President and Chief Govt Officer, ROSE. “We cherish our Québec roots, and deeply imagine in our province’s tradition and values. As all the time, we stay dedicated to making sure that Québec advantages from the accountable manufacturing, sale and consumption of hashish. As a part of the excellent household of hashish companies inside Village Farms, we’re even higher positioned to proceed taking part in this main function within the Québec panorama.”
Buy Worth
Beneath the phrases of the Share Buy Settlement, Village Farms acquired 70% of all excellent shares of ROSE on a debt-free foundation for a consideration comprised of money and a complete of two,411,280 frequent shares of Village Farms (“Village Farms Shares”) being (i) C$19.9 million in money, (ii) Village Farms Shares within the complete worth of C$26.8 million. As a part of the consideration, any current ROSE materials debt has been paid off in full.
The Village Farms Shares issued underneath the Share Buy Settlement are topic to lock-up agreements, and topic to compliance with relevant securities legal guidelines, 33% of those shares will likely be launched in 4 months, one other 33% of those shares to be launched after eight months and the remaining shares to be launched after one 12 months.
The co-founder and President and Chief Govt Officer of ROSE, Davide Zaffino, and co-founder and Chief Working Officer of ROSE, Brian D. Stevenson (the “Administration Shareholders”), who had been among the many sellers of ROSE on this transaction, will stay of their present roles with ROSE post-acquisition and have retained a 30% curiosity in ROSE (“Retained Curiosity”). Together with the acquisition, Village Farms and the Administration Shareholders have entered into an settlement offering Village Farms with a pathway to amass the Retained Curiosity upon the prevalence of sure triggering occasions previous to March 31, 2025. The value for this name proper was set at a a number of solely primarily based on ROSE’s adjusted EBITDA efficiency of the relevant prior calendar 12 months.
Notes
1. Statscan. Primarily based on information as at August 31, 2021.
About Village Farms Worldwide, Inc.
Village Farms leverages many years of expertise as a large-scale, Managed Surroundings Agriculture-based, vertically built-in provider for high-value, high-growth plant-based Shopper Packaged Items alternatives, with a robust basis as a number one contemporary produce provider to grocery and large-format retailers all through the US and Canada, and new high-growth alternatives within the hashish and CBD classes in North America and chosen markets internationally.
In Canada, the Firm’s wholly-owned Canadian subsidiary, Pure Sunfarms, is among the single largest hashish operations on the earth, the lowest-cost greenhouse producer and one in all Canada’s best-selling manufacturers. The Firm additionally owns 70% of Québec-based, ROSE LifeScience, a number one third-party hashish merchandise commercialization professional within the Province of Québec,
Within the US, wholly-owned Balanced Well being Botanicals is among the main CBD manufacturers and e-commerce platforms within the nation. Topic to compliance with all relevant US federal and state legal guidelines and inventory change guidelines, Village Farms plans to enter the US high-THC hashish market by way of a number of methods, leveraging one of many largest greenhouse operations within the nation (greater than 5.5 million sq. ft in West Texas), in addition to the operational and product experience gained by way of Pure Sunfarms’ hashish success in Canada.
Internationally, Village Farms is focusing on chosen, nascent, authorized hashish and CBD alternatives with important medium- and long-term potential, with an preliminary deal with the Asia-Pacific area and Europe.
About Rose LifeScience
ROSE LifeScience is dedicated to making sure that Québec advantages from the accountable manufacturing, sale, and consumption of hashish. From hashish cultivation to advertising, commercialization, and logistics, the Huntingdon, QC firm performs a key function within the province. Along with its personal merchandise and experience, ROSE gives specialised business providers to chose producers to encourage a diversified provide on the Québec market. For extra data, go to www.roselifescience.ca.
Cautionary Assertion Relating to Ahead-Wanting Info
This press launch comprises forward-looking statements inside the that means of the US Personal Securities Litigation Reform Act of 1995, Part 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Part 21E of the Securities Trade Act of 1934, as amended (the “Trade Act”), and is topic to the secure harbor created by these sections. This press launch additionally comprises “forward-looking data” inside the that means of relevant Canadian securities regulation. We consult with such forward-looking statements and forward-looking data collectively as “forward-looking statements”.
Ahead-looking statements on this press launch relate to the Firm’s and ROSE’s future outlook or monetary place and anticipated occasions or outcomes and should embody statements relating to the monetary place, revenue, enterprise technique, budgets, enlargement plans, litigation, projected manufacturing, expectations relating to the Québec hashish market, the impact that the acquisition of ROSE may have on the Firm‘s internet revenue, gross sales and EBITDA margin, projected prices, capital expenditures, monetary outcomes, profitability, taxes, plans and goals of or involving the Firm and ROSE.
Significantly, statements relating to future outcomes, efficiency, achievements, prospects or alternatives for the Firm or ROSE, the greenhouse vegetable business and the hashish business and market are forward-looking statements. In some circumstances, forward-looking data will be recognized by such phrases as “outlook”, “could”, “would possibly”, “will”, “may”, “ought to”, “would”, “happen”, “count on”, “plan”, “anticipate”, “imagine”, “intend”, “strive”, “estimate”, “predict”, “potential”, “proceed”, “doubtless”, “schedule”, “goals”, or the destructive or grammatical variation thereof or different related expressions regarding issues that aren’t historic details. The forward-looking statements on this press launch are topic to dangers that will embody, however should not restricted to: our working historical past, together with that of ROSE, Balanced Well being, Pure Sunfarms and our start-up operations of rising hemp in the US; the authorized standing of Pure Sunfarms, ROSE and Balanced Well being hashish enterprise; dangers regarding the combination of ROSE into our enterprise; dangers regarding acquiring extra financing, together with our dependence upon credit score services; potential difficulties in attaining and/or sustaining profitability; variability of product pricing; dangers inherent within the hashish, hemp, CBD, cannabinoids, and agricultural companies; market place, skill to leverage present enterprise relationships for future enterprise involving hemp and cannabinoids, the flexibility of Pure Sunfarms and ROSE to domesticate and distribute hashish in Canada; current and new governmental rules, together with dangers associated to regulatory compliance and relating to acquiring and sustaining licenses required underneath the Hashish Act (Canada), the Prison Code and different Acts, S.C. 2018, c. 16 (Canada) for its Canadian operational services), and adjustments in our regulatory necessities; authorized and operational dangers regarding anticipated conversion of our greenhouses to hashish manufacturing in Canada and within the USA; dangers associated to guidelines and rules on the US federal (Meals and Drug Administration and United States Division of Agriculture), state and municipal ranges with respect to supply and hemp, cannabidiol-based merchandise commercialization; retail consolidation, technological advances and different types of competitors; transportation disruptions; product legal responsibility and different potential litigation; retention of key executives; labor points; uninsured and underinsured losses; vulnerability to rising power prices; environmental, well being and security dangers, overseas change publicity, dangers related to cross-border commerce; difficulties in managing our development; restrictive covenants underneath our credit score services; pure catastrophes; the continuing and creating COVID-19 pandemic; and tax dangers.
The Firm has primarily based these forward-looking statements on elements and assumptions about future occasions and monetary developments that it believes could have an effect on its monetary situation, outcomes of operations, enterprise technique and monetary wants. Though the forward-looking statements contained on this press launch are primarily based upon assumptions that administration believes are affordable primarily based on data presently obtainable to administration, there will be no assurance that precise outcomes will likely be according to these forward-looking statements. Ahead-looking statements essentially contain identified and unknown dangers and uncertainties, a lot of that are past the Firm‘s management, that will trigger the Firm’s or the business’s precise outcomes, efficiency, achievements, prospects and alternatives in future intervals to vary materially from these expressed or implied by such forward-looking statements. These dangers and uncertainties embody, amongst different issues, the elements contained within the Firm‘s filings with securities regulators, together with this press launch. Specifically, we warning you that our forward-looking statements are topic to the continuing and creating circumstances associated to the COVID-19 pandemic, which can have a fabric hostile impact on our enterprise, operations and future monetary outcomes.
When counting on forward-looking statements to make choices, the Firm cautions readers to not place undue reliance on these statements, as forward-looking statements contain important dangers and uncertainties and shouldn’t be learn as ensures of future outcomes, efficiency, achievements, prospects and alternatives. The forward-looking statements made on this press launch relate solely to occasions or data as of the date on which the statements are made on this press launch. Besides as required by regulation, the Firm undertakes no obligation to replace or revise publicly any forward-looking statements, whether or not because of new data, future occasions or in any other case, after the date on which the statements are made or to mirror the prevalence of unanticipated occasions.
SOURCE Village Farms Worldwide, Inc.
