Canadian CANNAINVESTOR Magazine August / September 2017 - Page 216


First of all, yes you read correctly above and this company is listed on the TSX. To many, much like Delivra and Quinsam, there must be a reason why this company is here and after receiving emails and messages asking just that question (it is on the CannaInvestor Magazine Top Stock Pick lists), we thought it best to include a more thorough explanation and it fits perfect with this case study. According to the company description that appears on their website:

Village Farms is one of the largest producers of premium quality greenhouse tomatoes, bell peppers and cucumbers in North America. Village Farms vegetables are grown hydroponically (without the use of soil) in a glass enclosed high technology environment using sophisticated computer systems to control irrigation, fertilizers, carbon dioxide, light, temperature, ventilation, humidity and other climatic factors. Village Farms’ greenhouse vegetables are produced by plants that have been selected for their taste, quality and other characteristics and are not genetically modified.

Their quarterly Canadian revenue of almost $60M and a market cap at time of writing of only under $80M warrant this apparent wondering from our path. But in that company description above is the answer. They are one of the largest greenhouse producers of premium fruit and vegetable and on June 6th announced a joint venture with Emerald Health Therapeutics Inc (TSXV:EMH; OTC:EMHTF) Highlights of this joint venture:

- 1.1 million square feet of initial potential greenhouse cannabis production (estimated to yield more than 75,000 kg of product annually) upon completion of full licensing and greenhouse conversion.

- Formation of the joint venture is a transformational opportunity for Village Farms that will see the conversion of one of its existing Delta, BC greenhouse assets to grow a substantially more profitable agricultural product. Village Farms is one of the largest, most experienced and technically advanced greenhouse growers in North America, with an ingrained culture of low-cost production.

- Formation of the joint venture strategically positions Emerald for rapid production capacity expansion in partnership with world-class greenhouse operators, preparing it for the future non-therapeutic market and existing undersupplied medical cannabis market. The joint venture has the goal to be the lowest-cost cannabis producer in Canada;

- Emerald has significant cannabis industry experience, including a portfolio of high-quality genetics and refined standard operating procedures, with a flawless record of operations under Health Canada's stringent ACMPR regime.


To the prudent Retail Investor, the January 31st 2017 financials had record breaking quarterly sales. April 30th 2017 financials were again record breaking and once one-time expenses are removed and other items with a short shelf-life the company’s cash flow is trending quickly towards being positive. Subsequent updates for the months of May and June were highlighted by record breaking double digit month over month sales growth. Similar to CHV in that their impressive and growing revenues have all to date been based not on their ACMPR aspirations and like CHV, their own license is getting nearer to realization. Partnered with Canopy Growth, Health Canada Medical Device Licensed, and record breaking increasing sales. Is this a recipe for success for shareholders? Time will tell.