Village Farms International Announces Completion of Pure Sunfarms' CAD$20 Million Credit Facility

Published: February 14, 2019

Village Farms International Announces Completion of Pure Sunfarms' CAD$20 Million Credit Facility

Village Farms International, Inc. announced that its 50%-owned joint venture for large-scale, low-cost, high-quality cannabis production, Pure Sunfarms Corp. has entered into a credit agreement with Bank of Montreal (“BMO”), as agent and lead lender and Farm Credit Canada (“FCC”) as lender in respect of a CAD$20 million secured non-revolving term loan. Pure Sunfarms intends to use the funds available under the Credit Facility to finance the final costs of converting its 1.1 million square foot greenhouse for cannabis production, the vast majority of which was completed in January of this year. The funds available under the Credit Facility may also be used for general corporate purposes.

“The ability to establish this Credit Facility with Bank of Montreal, a Canadian Schedule I bank, and Farm Credit Canada, the country’s leading agriculture lender, is a testament to the strength and potential of Pure Sunfarms,” said Michael DeGiglio, Chief Executive Officer, Village Farms International. “Village Farms has long-standing relationships with both BMO and FCC, each of which, based on our extensive histories, recognizes and values our three decades of large-scale greenhouse production experience and deep expertise throughout the supply chain. We are pleased to now extend these relationships to Pure Sunfarms as it rapidly approaches full production at one of the single largest cannabis facilities in the world and begins to generate positive cash flow from operations as expected in the first quarter of 2019.”

“Pure Sunfarms is proud to enter into this Credit Facility with these two highly respected institutional lenders,” said Mandesh Dosanjh, President and Chief Executive Officer, Pure Sunfarms. “This is truly an exciting time for our organization and we are appreciative of the support of each as Pure Sunfarms establishes itself as a vertically integrated supplier to the Canadian cannabis market.”

The Credit Facility, which matures on February 7, 2022, is secured by Pure Sunfarms’ greenhouse facility, and contains customary financial and restrictive covenants.

With conversion of all growing areas, totaling more than one million square feet, of its greenhouse facility completed, Pure Sunfarms expects to be in production in all quadrants of the facility in the first quarter of this year and to reach full run rate annual production of 75,000 kilograms mid-year. The technologically-advanced Delta 3 greenhouse design is based on decades of large-scale, low-cost agricultural production experience and extensive cannabis expertise, resulting in a state-of-the-art facility with 16 grow rooms optimized for year-round harvesting (more than 80 harvests annually).