Village Farms International Congratulates Netherlands on Cannabis Program Milestone
Village Farms International (NASDAQ: VFF) has congratulated the Netherlands on advancing its legal recreational cannabis program, known as the Dutch Program. The scheme expanded from two to ten municipalities where regulated cannabis can be sold. Village Farms, through its subsidiary Leli Holland, holds one of ten cultivation and distribution licenses for recreational cannabis in the Netherlands. Production at their Drachten facility is expected to commence in Q4 2024, with sales beginning in Q1 2025. CEO Michael DeGiglio highlighted the importance of the Netherlands to Village Farms' international strategy, aimed at contributing high-quality cannabis products to both recreational and medicinal markets.
- Expansion of the Dutch Program from two to ten municipalities.
- Village Farms holds one of ten licenses for cannabis cultivation and distribution in the Netherlands.
- Production scheduled to start in Q4 2024, with sales beginning in Q1 2025.
- Leveraging EU-GMP certification for existing and new European markets.
- None.
Insights
Village Farms International's involvement in the expanding Dutch cannabis market brings a strategic growth opportunity for the company. The Netherlands' progression to include more municipalities in its regulated recreational cannabis program signifies a broader market potential and reduced regulatory risks. This expansion from two to ten municipalities means a
Village Farms' subsidiary, Leli Holland, securing one of the limited licenses positions the company favorably against competitors. The strategic timing of production in Q4 2024 and sales starting in Q1 2025 aligns with market readiness, allowing for an immediate capture of consumer demand. The company’s existing success in Canada could serve as a robust business model to replicate in the Netherlands, enhancing investor confidence in its international expansion strategy.
It's also noteworthy that Village Farms is leveraging its EU-GMP certification, which is pivotal for access to broader European markets. This certification ensures compliance with high-quality standards, important for gaining trust and market share in other European regions. Retail investors should keep an eye on the potential for new market openings in Europe driven by this stringent certification.
The short-term impact includes anticipation leading up to production and sales, which could enhance stock performance due to positive market sentiment. Long-term benefits include sustained revenue growth and diversification, reducing dependency on any single market.
From a financial standpoint, the expansion into the Dutch market is a major catalyst for Village Farms International. Entering a regulated market with a limited number of licenses minimizes competition and could lead to higher profit margins. The timeline of production and sales suggests an impending revenue stream starting in early 2025, which should be factored into financial projections.
One key aspect is the potential revenue contribution from the Dutch market. If we consider the cannabis market in the Netherlands, expanding to ten municipalities significantly enlarges the target consumer base. Investors should anticipate revenue growth not only from direct sales but also from the premium pricing often associated with regulated, high-quality cannabis products.
However, there are potential drawbacks to consider. The initial costs of setting up production facilities and the time lag before revenue generation might impact short-term financials. Additionally, the cannabis industry faces regulatory and market-specific risks, which could influence operational costs and profitability.
Overall, the strategic move is likely to be favorable for long-term growth, enhancing revenue diversity and reducing market-specific risks. Investors should monitor financial reports for capital expenditure details and early performance metrics post-Q1 2025.
VANCOUVER, British Columbia and ORLANDO, Fla., June 20, 2024 (GLOBE NEWSWIRE) -- Village Farms International, Inc. (“Village Farms” or “the Company”) (NASDAQ: VFF) congratulates the Netherlands on its historic progress to the next phase of its legal recreational cannabis program (the "Dutch Program"). With successful completion of the start-up phase of the Dutch Program, the Netherlands has expanded the number of municipalities, in which regulated cannabis can be sold in “coffee shops”, from two to ten.
Through its majority owned subsidiary, Leli Holland, Village Farms holds one of ten licenses to cultivate and distribute recreational cannabis legally under the Dutch Program. Production at the Company’s first facility in Drachten is scheduled to start in the fourth quarter of 2024, with sales to start in the first quarter of 2025.
“The Netherlands is a core part of our expanding international cannabis program, which includes both recreational and medicinal markets. We look forward to building on our unmatched success in Canada to contribute high quality, innovative and safe cannabis products to the Dutch Program when we enter the recreational market there early next year. In addition to our Netherlands production, we are leveraging our position as one of the few Canadian producers with EU-GMP certification for other existing European markets and new opportunities as they unfold,” said Michael DeGiglio, President and Chief Executive Officer, Village Farms.
About the Netherlands Dutch Closed Supply Chain Experiment
The Dutch Program is scheduled to operate for a minimum of four years with the potential for national expansion. The total supply requirement for the ten approved producers participating in the Dutch Program is specified by the Netherlands government to be approximately a minimum of 65,000 kilograms of dried flower annually. A brief description of the Dutch Program can be found at Controlled Cannabis Supply Chain Experiment | Government.nl.
About Village Farms International
Village Farms leverages decades of experience as a large-scale, Controlled Environment Agriculture-based, vertically integrated supplier for high-value, high-growth plant-based Consumer Packaged Goods opportunities, with a strong foundation as a leading fresh produce supplier to grocery and large-format retailers throughout the US and Canada, and new high-growth opportunities in the cannabis and CBD categories in North America, the Netherlands and selected markets internationally.
In Canada, the Company's wholly-owned Canadian subsidiary, Pure Sunfarms, is one of the single largest cannabis operations in the world, the lowest-cost greenhouse producer and one of Canada’s best-selling brands. The Company also owns
In the US, wholly-owned Balanced Health Botanicals is one of the leading CBD brands and e-commerce platforms in the country. Subject to compliance with all applicable US federal and state laws and stock exchange rules, Village Farms plans to enter the US high-THC cannabis market via multiple strategies, leveraging one of the largest greenhouse operations in the country (more than 5.5 million square feet in West Texas), as well as the operational and product expertise gained through Pure Sunfarms' cannabis success in Canada.
Internationally, Village Farms is targeting selected, nascent, legal cannabis and CBD opportunities with significant medium- and long-term potential, with an initial focus on the Asia-Pacific region and Europe.
Cautionary Statement Regarding Forward-Looking Information
As used in this Press Release, the terms “Village Farms”, “Village Farms International”, the “Company”, “we”, “us”, “our” and similar references refer to Village Farms International, Inc. and our consolidated subsidiaries, and the term “Common Shares” refers to our common shares, no par value. Our financial information is presented in U.S. dollars and all references in this Press Release to “$” means U.S. dollars and all references to “C$” means Canadian dollars.
This Press Release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the U.S. Securities Act of 1933, as amended, (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is subject to the safe harbor created by those sections. This Press Release also contains "forward-looking information" within the meaning of applicable Canadian securities laws. We refer to such forward-looking statements and forward-looking information collectively as "forward-looking statements". Forward-looking statements may relate to the Company's future outlook or financial position and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, expansion plans, litigation, projected production, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the Company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the Company, the greenhouse vegetable or produce industry, the cannabis industry and market and our energy segment are forward-looking statements. In some cases, forward-looking information can be identified by such terms as "can", "outlook", "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "try", "estimate", "predict", "potential", "continue", "likely", "schedule", "objectives", or the negative or grammatical variation thereof or other similar expressions concerning matters that are not historical facts. The forward-looking statements in this Press Release are subject to risks that may include, but are not limited to: our limited operating history in the cannabis and cannabinoids industry, including that of Pure Sunfarms, Inc. (“Pure Sunfarms”), Rose LifeScience Inc. (“Rose” or “Rose LifeScience”) and Balanced Health Botanicals, LLC (“Balanced Health”); the limited operational history of the Delta RNG Project in our energy segment; the legal status of the cannabis business of Pure Sunfarms and Rose and the hemp business of Balanced Health and uncertainty regarding the legality and regulatory status of cannabis in the United States; risks relating to the integration of Balanced Health and Rose into our consolidated business; risks relating to obtaining additional financing on acceptable terms, including our dependence upon credit facilities and dilutive transactions; potential difficulties in achieving and/or maintaining profitability; variability of product pricing; risks inherent in the cannabis, hemp, CBD, cannabinoids, and agricultural businesses; our market position and competitive position; our ability to leverage current business relationships for future business involving hemp and cannabinoids; the ability of Pure Sunfarms and Rose to cultivate and distribute cannabis in Canada; existing and new governmental regulations, including risks related to regulatory compliance and regarding obtaining and maintaining licenses required under the Cannabis Act (Canada), the Criminal Code and other Acts, S.C. 2018, C. 16 (Canada) for its Canadian operational facilities, and changes in our regulatory requirements; legal and operational risks relating to expected conversion of our greenhouses to cannabis production in Canada and in the United States; risks related to rules and regulations at the U.S. Federal (Food and Drug Administration and United States Department of Agriculture), state and municipal levels with respect to produce and hemp, cannabidiol-based products commercialization; retail consolidation, technological advances and other forms of competition; transportation disruptions; product liability and other potential litigation; retention of key executives; labor issues; uninsured and underinsured losses; vulnerability to rising energy costs; inflationary effects on costs of cultivation and transportation; recessionary effects on demand of our products; environmental, health and safety risks, foreign exchange exposure, risks associated with cross-border trade; difficulties in managing our growth; restrictive covenants under our credit facilities; natural catastrophes; rising interest rates; and tax risks.
The Company has based these forward-looking statements on factors and assumptions about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. Although the forward-looking statements contained in this Press Release are based upon assumptions that management believes are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the Company's control, which may cause the Company's or the industry's actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the factors contained in the Company's filings with securities regulators, including this Press Release and the Company’s most recently filed annual report on Form 10-K.
When relying on forward-looking statements to make decisions, the Company cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future results, performance, achievements, prospects and opportunities. The forward-looking statements made in this Press Release relate only to events or information as of the date on which the statements are made in this Press Release. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Contact Information
| Lawrence Chamberlain Investor Relations LodeRock Advisors (416) 519-4196 lawrence.chamberlain@loderockadvisors.com |
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