Village Farms International, Inc. (VFF) Announces Pure Sunfarms’ Receipt of Standard Processing License for its Delta 3 Greenhouse Facility

Village Farms International, Inc. (“Village Farms” or the “Company”) (TSX:VFF; NASDAQ:VFF) today announced that its 50%-owned joint venture for large-scale, low-cost, high-quality cannabis production, Pure Sunfarms, has received a Standard Processing License from Health Canada for its 1.1 million square foot Delta 3 greenhouse facility (the “Processing License”).

The Processing License permits Pure Sunfarms to extract and process cannabis at the Delta 3 facility, which will enable the development and manufacture of products derived from the cannabis plant, including cannabis oil, as well as concentrates and edibles.  Pure Sunfarms will require an additional amendment to its sales license to sell cannabis oil, which it expects to be distributing to provincial/territorial distributors and private retailers by the fourth quarter of this year.

“Receipt of our Processing License is a critical step in the execution of our product development strategy, allowing us to expand beyond dried flower into the production of cannabis oil for the current legal recreational market, as well as to develop a wide range of products for the expected legalization in Canada of concentrates and edibles for recreational use in October 2019,” said Mandesh Dosanjh, President and Chief Executive Officer, Pure Sunfarms.  “Importantly, the Processing License permits Pure Sunfarms to store cannabis oil on site at Delta 3, which will allow us to purchase oil from external extractors for production of concentrates and edibles ahead of having our own extraction operations in place, which we continue to target for this year.”

The Processing License is one of two regulatory steps required for Pure Sunfarms to begin selling directly to provincially/territorially authorized distributors and private retailers, with the other being an amendment to Pure Sunfarms’ existing sales license to permit the sale of dried products to these retailers (sometimes referred to as a “packaging license”).  Pure Sunfarms continues to expect to receive the requisite amendment to its sales license during the second quarter of 2019.

“With its Processing License in hand and the amendment to its sales license expected shortly, Pure Sunfarms should soon begin selling its own branded packaged product directly to the Ontario Cannabis Store under its existing supply agreement, as well as to finalize supply agreements with other provincial boards and private retailers,” said Michael DeGiglio, CEO, Village Farms International.  “While spot market pricing for sales to other licensed producers to date has been quite favourable, direct sales to the provincial boards and private retailers is expected to generate meaningfully higher margins, as Pure Sunfarms’ is reaching its full run-rate annual production of 75,000 kilograms at its Delta 3 facility mid-2019.  Moreover, with its existing supply relationship with another licensed producer transitioning to improved terms at the end of this year, Pure Sunfarms will have a significantly larger proportion of its production available for sale to the provincial boards and private retailers, with ongoing sales under that producer relationship expected to generate higher margins due to a the change from fixed to market pricing.”

About Village Farms International, Inc.

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. Village Farms produces and distributes fresh, premium-quality produce with consistency 365 days a year to national grocers in the U.S. and Canada from more than nine million square feet of Controlled Environment Agriculture (CEA) greenhouses in British Columbia and Texas, as well as from its partner greenhouses in British Columbia, Ontario and Mexico.  The Company is now leveraging its 30 years of experience as a vertically integrated grower for the rapidly emerging global cannabis opportunity through its 50% ownership of British Columbia-based Pure Sunfarms Corp., one of the single largest cannabis growing operations in the world.  The Company also intends to pursue opportunities to become a vertically integrated leader in the U.S. hemp-derived CBD market, subject to compliance with all applicable U.S. federal and state laws.  Village Farms has established a joint venture, Village Fields Hemp, for multi-state outdoor hemp cultivation and CBD extraction and plans to pursue controlled environment hemp production at its Texas greenhouse operations, which total 5.7 million square feet of production area, subject to legalization of hemp in Texas.