British Columbia-based Village Farms, one of North America’s largest greenhouse growers, has struck a deal to complete a 100-per-cent takeover of Pure Sunfarms by buying all remaining shares of the Canadian cannabis grower.
The purchase and sale deal, announced Tuesday, would see Village Farms purchase about 37 million common shares from Emerald Health Therapeutics for $79.9 million.
Village Farms already owns 58.3 percent of Pure Sunfarms’ shares, and Emerald Health has about 41 percent of Pure Sunfarms’ shares.
Village Farms CEO Michael DeGiglio said in a news release that the move will allow his firm to “fully leverage the success of Pure Sunfarms, as well as our decades of experience and deep organizational capabilities, for our cannabis and CBD ambitions in the U.S and selected markets internationally.”
Pure Sunfarms has had six consecutive quarters of net income, the news release said, generating net sales of $30.9 million in the six months leading up to June 2020, with a growth margin of 44 per cent and net income of $9.6 million.
Retail branded sales volume increased 89 per cent in the second quarter compared to the first quarter of this year, the company said, adding that Pure Sunfarms was the top-selling brand of dried flower products in August with the Ontario Cannabis Store.
The deal is expected to close in late October, subject to various approvals by lenders and shareholders.
Village Farms produces and distributes produce to national grocers in the U.S. and Canada from greenhouses in B.C., Ontario, Texas and Mexico. It intends to become a supplier of CBD products in the U.S., subject to federal and state laws.