On June 6, 2017, Village Farms International, Inc. (Village Farms) and Emerald Health Therapeutics Inc., together with its affiliates (Emerald), 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 initially contributed a 1.1-million square-foot greenhouse facility in Delta, BC.
The greenhouse is located on a 50-acre parcel of land (with ancillary buildings), which will be converted to ACMPR-compliant (Access to Cannabis for Medical Purposes Regulations) production and, if permitted by applicable law, production for the non-therapeutic adult-use market.
Emerald will initially contribute an aggregate of $20 million in cash (of which $2 million was advanced at closing and the remaining $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.
Each party will have a 50-per-cent 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) the 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 and a 2.6-million square-foot greenhouse, both of which are 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.
Village Farms International, Inc. was represented by Torys LLP with a team that included Sabrina Gherbaz and Nooreen Bhanji (real estate/joint venture), Michael Zackheim and Kevin Armitage (corporate/securities), Eileen McMahon and Manpreet Singh (cannabis licensing/food and drug regulatory) and Richard Johnson (tax).
Emerald Health Therapeutics Inc. and its affiliates were represented by McCullough O’Connor Irwin LLP with a team that included James Beeby, Lisa Andrews and Tajinder Rathor.
Michael Zackheim,Eileen M. McMahon,James D. Beeby
Torys LLP,Bennett Jones LLP