Pure Sunfarms Gains Approval to Supply Provinces

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The Pure Sunfarms facility in British Columbia has secured Health Canada approval to begin selling cannabis directly to provincial and territorial distributors across the country.

Pure Sunfarms is a 50/50 joint venture owned by Village Farms International, Inc. [stock_market_widget type="inline" template="generic" color="default" assets="VFF.TO" markup="(TSX: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"] and Emerald Health Therapeutics Inc. [stock_market_widget type="inline" template="generic" color="default" assets="VFF.TO" markup="(TSX: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"]. This summer it achieved its full annualized production run-rate of 75,000 kg of cannabis and its capacity is set to double to 150,00 kg by 2021.

The facility already sells to other licensed producers, but it can now ship dried cannabis to provincial and territorial wholesalers thanks to Health Canada’s decision to amend its license.

It already has deals in place to supply the Ontario Cannabis Store and the British Columbia Liquor Distribution Branch. It will begin selling directly to both distributors in the coming weeks.

Ontario and British Columbia account for more than half of Canada’s population between them.

“Pure Sunfarms has already established itself as a premiere supplier of cannabis products to other licensed producers and with this amendment it can now begin building a differentiated and enduring brand based on its best-in-class, low-cost growing operations with Canadian consumers,” said Michael DeGiglio, chief executive Village Farms International.

He added that Pure Sunfarms can achieve industry-leading gross margins, and that the ability to sell direct to provinces will position it for continued revenue growth and increased profitability in the years ahead.

The plan now is to target other provincial distributors in an effort to tie up supply deals.

Village Farms International came under attack from a Citron Research short earlier this year, and Emerald Therapeutics was also caught in the crossfire. Both companies saw sharp decreases to their share prices in the aftermath, but Village Farms quickly rallied.

VFF began the year at $4.78 and it opened at $16.32 today. It closed at $15.66 on Friday and the Pure Sunfarms news has given it a boost.

Emerald Health’s share price has continued to decrease throughout 2019 and it is now down by more than 50% since the Citron Research report was published. However, it also saw its price increase this morning after the Pure Sunfarms news was revealed.

However, it saw net loss improve significantly in Q2 2019 after sales increased 94% on the previous quarter. It believes its stake in Pure Sunfarms leaves it well placed for strong financial growth in the year ahead, while it has ramped up its focus on higher-value brands to drive increased margins.

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Martin Green
Martin Green is an experienced journalist with a strong focus on the cannabis, alcohol, and gambling industries. He is particularly interested in the political issues affecting the global marijuana trade, and he has a keen focus on regulation changes and legal topics. He holds a BA English Literature, MA Creative Writing and a National Qualification in Journalism diploma. He has worked in journalism since 2009 and written for a broad range of newspapers, business titles and magazines, including The Sun, The Metro, The Journal, Livestrong, Drinks Retailing News, Harpers, Sportsbook Review, Vital Football, Essex Live and Surrey Live. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.
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