June 06, 2017
Torys represented Village Farms with a team that included Sabrina Gherbaz and Nooreen Bhanji (real estate/joint venture), Michael Zackheim and Kevin Armitage (corporate/securities), Eileen McMahon, Manpreet Singh and Sumeet Dang (cannabis licensing/food and drug regulatory), John Emanoilidis (M&A) and Richard Johnson (tax).
On June 6, 2017, Village Farms International, Inc. ("Village Farms") and Emerald Health Therapeutics Inc., together with its affiliates ("Emerald"), announced that they entered into a definitive agreement to form a joint venture for large-scale, high-quality, low-cost cannabis production. Under the terms of the agreement, Village Farms will initially contribute a 1.1 million-square foot (25-acre) greenhouse facility in Delta, British Columbia, located on a 50-acre parcel of land (with ancillary buildings), which will be converted to ACMPR (Access to Cannabis for Medical Purposes Regulations)-compliant production and, if permitted by applicable law, production for the non-therapeutic adult-use market.
Emerald will initially contribute an aggregate of C$20 million in cash (of which C$2 million was advanced at closing and the remaining C$18 million will be advanced in tranches upon satisfaction of certain milestones to be determined by the board of directors of the joint venture) to fund conversion of the greenhouse and each party will have a 50% ownership stake in the joint venture.
The transaction closed concurrently with the signing of a definitive agreement, at which time the joint venture leased (with the option to buy) Village Farms' Delta 3 greenhouse assets. The joint venture also entered into an agreement with Village Farms for options to lease or purchase from Village Farms a second 1.1 million square foot greenhouse (25 acre) and a 2.6 million square foot (60 acre) greenhouse, both located adjacent to the acquired greenhouse. Combined, these three greenhouse assets could provide the joint venture with a total potential aggregate production capacity of approximately 4.8 million square feet (110 acres).
Emerald wholly owns Emerald Health Botanicals, which holds a license under the ACMPR to cultivate and sell medical cannabis flower and oils out of its facility located in Victoria, British Columbia.
Village Farms is one of the largest and longest-operating vertically integrated greenhouse growers in North America and the only publicly traded greenhouse produce company in Canada.
Further information can be found on Canada Newswire’s website.