June 2019 AN UNMATCHED PLATFORM FOR THE GLOBAL CANNABIS OPPORTUNITY 1
Forw rward Lo Lookin ing St Statements This presentation contains certain "forward looking statements". These statements relate to future events or future performance and reflect the Company's expectations regarding its growth, results of operations, performance, business prospects, opportunities or industry performance and trends. These forward looking statements reflect the Company's current internal projections, expectations or beliefs and are based on information currently available to the Company. In some cases, forward looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict" , "potential", "continue" or the negative of these terms or other comparable terminology. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. In evaluating these statements, you should specifically consider various factors, including, but not limited to, such risks and uncertainties as availability of resource, competitive pressures and changes in market activity, risks associated with U.S. and Canadian sales and foreign exchange, regulatory requirements and all of the other "Risk Factors" set out in the Company's current Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2018, which are available electronically at www.sedar.com. Actual results may differ materially from any forward looking statement. Although the Company believes that the forward looking statements contained in this presentation are based upon reasonable assumptions, you cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this presentation, and other than as specifically required by applicable law, the Company assumes no obligation to update or revise them to reflect new events or circumstances. 2
Mark rket Facts (As of June 4, 2019) MANAGEMENT LISTING MARKET 52-WEEK SHARES & BOARD PRICE SYMBOL CAPITALIZATION HIGH/LOW OUTSTANDING OWNERSHIP 49.2 M ~21.5% CDN$823 M CDN$24.25 TSX:VFF $16.72 CDN$3.98 (basic) (basic) 53.0 M US$610 M NASDAQ: $12.43 US$18.10 (diluted) US$2.93 (basic) VFF Publicly traded company since 2006 Very strong alignment of management and shareholders 3
Leveraging decades of experience as a large-scale, low-cost, vertically integrated grower for nascent large market opportunities Canadian cannabis JV already one of the Canadian Legal Cannabis: largest producers in Canada and profitable $4B+ in 2019 1 Aggressively pursuing a consumer packaged goods strategy to capitalize on Global Hemp-Derived CBD: the hemp/CBD opportunity the U.S. $22B by 2022 2 Proven ability to quickly transition existing large-scale operations to new agricultural US Legal Cannabis: opportunities $25B by 2025 3 Focused on near-term cash flow generation and rapid ramp to profitability 4 4 1. Deloitte 2. Brightfield Group 3. New Frontier Data
Unmatched Nort rth Ameri rican Greenhouse Asse ssets 8.3 M sq. ft. (190 acres) Owned Ass ssets Ca Canada: De Delta, BC BC 1 Faci acilit ity ft. (60 (60 ac acres) s) 2.6 M M sq. q. ft U.S .S.: Wes est t Texas 4 4 Faci acilities s - Veg egetables 5.7 M M sq. q. ft ft. (13 (130 ac acres) Can annabis is JV JV 2.2 M sq. ft. (50 acres) (50% ownership) Ca Canada: De Delta, BC BC 2 Faci 2 acilities: s: Del Delta 2 2 & Del Delta 3 3 (f (form ormerly owned by Vil Village Far arms) s) Gr Growin ing Mexico: 1.7 1.7+ M sq. sq. ft ft. (40 (40+ ac acres) Ontario: 3.0 3.0 M sq. sq. ft. ft. (70 (70 ac acres) Par artners BC: BC: 3.0 3.0 M sq. sq. ft. ft. (70 (70 ac acres) Vegetables 5
Leaders in Le in Hig igh-Tech, Lo Low-Cost Vert rtic icall lly In Integrated Greenhouse Growin ing 750 years Exp xperts in n agric agricult ltural l pr prod oduct safety of combined master grower experience from around the world 30 30-year Leaders history developing and operating in n crop op ma management regi egistratio ions in n Nort North Am Americ ica mega-scale greenhouses Decades of experience as a Proven vertically integrated grower/distributor, meeting the stringent specifications of tr track recor ord as as a a North America’s top grocers low-cos ost op oper erator or Cannabis and hemp are agricultural products like any other 6
Fast t Mover Advantage: Abil ility ty to Rapidly Transiti tion to New Crops with ith Lower Ris isk Existing facilities require lower cap ex and allow faster time to market compared to new builds Existing operations with experienced management and skilled labor force enable faster ramp to profitability Proven operating systems and decades of site- specific experience allow for more effective climate management, providing higher yields Extensive in-house facilities development and conversion expertise 7
Canada Pure Sunfarms: One of the Largest Vertically Integrated Cannabis Producers Del Delta, , BC BC 8
Canada: Ca : One of f th the La Largest Vert rtic icall lly In Integrated Producers PSF: Village Farms’ 50% -Owned JV 2.2 M sq. ft. conservative projected yield of 150,000 kg PSF has option on D1 (owned by Village Farms) – expires Sept 2021 +2.6 M sq. ft. conservative projected yield of +180,000 kg Pure Sunfarms has the potential to address a substantial portion of forecasted Canadian demand 9
Creating One of Canada’s Largest Vertically Integrated Cannabis Companies Well ll pos ositioned for th the evolu lution of of th the Can anadia ian can annabis mar arket Capitalizing on the current wholesale Building a premier vertically integrated opportunity to other Licensed Producers supplier with a leading brand and reputation Appointed President and CEO: Mandesh Dosanjh ▪ Wholesale distribution agreements with a Canadian LP ▪ Joined from LCBO: SVP, Supply Chain & Wholesale ▪ 2019: 40% of production @ fixed price ▪ Developed/managed LCBO’s supply chain/wholesale strategy for adult -use ▪ 2020-22: 25% of production @ prevailing market price ▪ cannabis Supply shortage: Realizing very favorable spot market pricing Selected to supply Ontario Cannabis Store – in discussions for ▪ ▪ Strong demand from other Licensed Producers supply agreements with other gov’t distributors/private retailers ▪ Product is consistently meeting the high testing standards of Strategic supply arrangement with one of Canada’s largest ▪ ▪ Health Canada online medical cannabis platforms Developing product and brand strategy ▪ Extraction capabilities in place by mid-2019 ▪ Pure Sunfarms is building a reputation for quality, consistency, safety and reliability 10
GOAL: : Be Be th the Lo Low-Cost, Hig igh-Quali lity Ca Cannabis is Producer r in in Ca Canada Ingrained culture of high-quality, low-cost production built over decades conservative target of Greenhouse growing provides significant capital <$1.00/gram and operating cost efficiencies ▪ Lower energy needs ▪ Greater economies of scale ▪ Allows for greater scale Continuous year-round harvesting and processing allows for a consistent, experienced, skilled agricultural labor force Ability to be sustainably profitable in a commoditized market 11
Delt lta 3: : Ra Rapid id Transit itio ion to Productio ion and Sa Sale le Init nitiate Co Commence Co Complete Ob Obtain Expand Exp Expand Exp ALL ALL GROWING Ob Obtain in Sale Sales Cultiv Cul ivatio ion Conversio Co ion Conversio Co ion of of Selli Sel ling Li Licensed Licensed Ar Li Area ARE AREA IN N “Packaging” ft 2 o 825,000 ft 2 Li License of of 1.1 M M ft Qua uadrant 1 Li License Growin Gr wing g Ar Area to PRODUCT CTION License Li (275,000 ft 2 ) o 550,000 ft 2 Process (27 to June 2017 Oct 2017 April 2018 July 2018 Sept 2018 Jan 2019 Apr 2019 Q2 2019 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Sept 2017 Q2 2019 March 2018 May 2018 Sept 2018 Jan 2019 Mar 2019 May 2019 Commence Co Fi File Obtain Ob in Commence Co Commence Comple Co lete Comple Co lete Ob Obtain in Sal Sales to o Cul Cultiv ivatio ion Cul Cultiv ivatio ion Co Commercia ial- Sales to Sal o Co Conversio ion Al All Li Licensing for or ALL ALL Processin ing Provin incia ial l License Li Li License Scale Sc le Other LP Oth LPs Growin Gr wing g Ar Area GROWING AREA: GR Li Licenses Bo Boar ards/Retailers M ft 2 Application App Prod oduction >1 >1 M Delta 3 firmly on track to reach full run rate annual production of 75,000 kg mid-2019 12
Productio ion Rampin ing Very ry Well ll at t Sc Scale le Facility operating as intended – benefitting from 20 years of site-specific experience, existing operational/growing team and existing labor force Quality and consistency firmly in line with expectations Yield consistent with production targets Production to date validating low-cost assumptions Nursery capable of supplying production double the size of the Delta 3 requirement On track to achieve or exceed all production expectations/forecasts 13
Recommend
More recommend
