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Village Farms Resolves Dispute With Emerald Health, Takes Control of Joint Venture

By David Jagielski - Mar 3, 2020 at 1:59PM

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Its stake in cannabis grower Pure Sunfarms will rise to 57.4%.

Village Farms International (VFF -8.48%) owned 53.5% of cannabis grower Pure Sunfarms as of Dec. 31, according to a press release issued on Tuesday. Previously, ownership of the joint venture had been a 50-50 split with Emerald Health Therapeutics (EMHT.F -15.37%). However, when Emerald failed to make an equity payment by Nov. 19, a dispute arose as to whether the large greenhouse grower could use that as an opportunity to contribute additional funds to Pure Sunfarms and take a majority stake in the pot producer. 

Emerald asserted that it still had a 50% stake in Pure Sunfarms. And in January, it looked as if the issue was closed after Village Farms said that it would opt to receive a refund for the additional contribution that it had made in November. 

But on Tuesday, Village Farms announced that the dispute with Emerald was now completely resolved in a different way, and that its stake in Pure Sunfarms would be increasing. Village Farms will contribute another 8 million Canadian dollars to Pure Sunfarms in 2020, boosting its stake in the cannabis grower to 57.4%. 

Cannabis greenhouse.

Image source: Getty Images.

Its investment in Pure Sunfarms has been a big reason why Village Farms has been able to produce profits in three of its past four quarters.  

During the past three quarters, the greenhouse giant has benefited from a CA$17.9 million boost to its bottom line as a result of its joint ventures -- among them, Pure Sunfarms. The cannabis producer is one of the largest in Canada and among the top-selling brands in the Ontario Cannabis Store. 

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Stocks Mentioned

Village Farms International, Inc. Stock Quote
Village Farms International, Inc.
VFF
$3.02 (-8.48%) $0.28
Emerald Health Therapeutics, Inc. Stock Quote
Emerald Health Therapeutics, Inc.
EMHT.F
$0.03 (-15.37%) $0.01

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