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September 2017
Investor PresentationOctober 2017
Forward looking statements
This presentation contains certain "forward looking statements". These statements relate to future events or futureperformance and reflect the Company's expectations regarding its growth, results of operations, performance, businessprospects, opportunities or industry performance and trends. These forward looking statements reflect the Company'scurrent internal projections, expectations or beliefs and are based on information currently available to the Company. Insome 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 othercomparable terminology. A number of factors could cause actual events or results to differ materially from the resultsdiscussed in the forward looking statements. In evaluating these statements, you should specifically consider variousfactors, including, but not limited to, such risks and uncertainties as availability of resource, competitive pressures andchanges in market activity, risks associated with U.S. and Canadian sales and foreign exchange, regulatory requirementsand all of the other "Risk Factors" set out in the Company's current annual information form and management'sdiscussion and analysis for the year ended December 31, 2016, which is available electronically atwww.sedar.com. Actual results may differ materially from any forward looking statement. Although the Companybelieves 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 forwardlooking statements are made as of the date of this presentation, and other than as specifically required by applicablelaw, the Company assumes no obligation to update or revise them to reflect new events or circumstances.
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Market Facts
PRICE
TSX:VFF
OTCBB:VFFIF
CDN$3.52
MARKETCAPITALIZATION
~CDN$138M(basic)
SHARESOUTSTANDING
39.1M (basic)
41.4M (diluted)
52-WEEK HI/LOW
CDN$4.15
CDN$1.28
MANAGEMENT& BOARD
OWNERSHIP
~30%
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LISTINGSYMBOL
(As of October 30, 2017)
~CDN$146M(diluted)
Industry Leader in Large-Scale, High Tech, Low-Cost Greenhouse Growing
10.5 M(240 ACRES) OF
GREENHOUSE CAPACITY
TECHNOLOGICALLYADVANCED
GREENHOUSE FACILITIES
IN PRODUCT QUALITY & SAFETY
750 YEARSOF EXPERIENCE
sq. ft.
30 YEARSIN OPERATION
2016 REVENUE1
2016 EBITDA1
C$209M
C$12.6M
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1. Converted to Canadian dollars at $0.75.
MASTER GROWER TEAM WITH
INDUSTRY LEADER
OWN
Vertically-integrated provider of premium produce to grocers across North America
Greenhouse growing produces a more consistent, higher quality product that customers demand and that commands a premium price
Exclusive varieties address consumer demand in the specialty growth segment
Strategically located greenhouses and logistics and distribution chain ensure the freshest, highest quality produce
Marquee customers across the U.S. and Canada
Premium Produce Grown In the Most Sustainable, Resource-Efficient Manner 5
Strategically Located Operations and Distribution Network
3 facilities / 110 acres
(4.8M sq. ft.)
British Columbia
VF Owned
4 facilities / 130 acres
(5.7M sq. ft.)
Texas
VF Owned
Ontario
Our logistics and distribution chain ensures the freshest, highest-quality produce reaches consumers across Canada and the U.S.
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Partner Greenhouses
Ontario:65 acres
British Columbia:25 acres
Mexico:50 acres
Mexico
Financial Profile 7
(All figures in Canadian dollars unless otherwise stated)
At June 30, 2017
Cash: $7.1 M (US$5.4 M)
Long-Term Debt: $55.5 M (US$44M)
FY 2016
Revenue: $209 M (US$156 M)
EBITDA: $12.6M (US$9.4) Margin: 6%
EBITDA (C$ MILLIONS)
$13.8
$10.1
$14.1 $12.6
$10.6
$0
$5
$10
$15
2013 2014 2015 2016 LTM Q2/17
REVENUE (C$ MILLIONS)
$147.2$158.9
$196.9 $209.1 $205.5
$0
$50
$100
$150
$200
$250
2013 2014 2015 2016 LTM Q2/17
LTM Net Income of $4.2 M and LTM EPS of $0.10
PURE SUNFARMSCANNABIS JOINT VENTURE:
A TRANSFORMATIONAL OPPORTUNITYLow Cost, Industry-Leading Scale with Speed To Market
Projected shortfall of supply based on current capacity and
market demand
Apply low-cost, high tech greenhouse growing expertise
4.8M sq. ft. of existing
greenhouse capacity
(potential yield of 300,000 kg)
1. Medical and non-therapeutic adult use markets. Does not include export market Source: Deloitte Report: “Recreational Marijuana – Insights and Opportunities.
.
Market NeedTransformational
Opportunity
Canadian Cannabis demand estimated to grow to
~600,000 kg by 20211
Potential to address substantial portion of the market
9Ability to Capitalize on Market Opportunity
Complementary Partners
Initial Contribution:
1.1 M sq. ft. (25 acre)greenhouse (leased to Pure
Sunfarms)
50% Ownership
Initial Contribution:
$20M cash
High-tech, low-cost greenhouse growing &
agricultural product safety expertise
Cannabis industry compliance and licensing expertise
Joint Venture: Pure Sunfarms
Large-scale,high-quality,
low-cost cannabis production
50% Ownership
Options for an additional 3.7 M sq. ft. (85 acres) of growing capacity
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Cannabis IP, including portfolio of high-quality genetics
Pure Sunfarms will sell dried cannabis
and develop and sell its own extraction-
based products
Leaders in High-Tech, Low Cost Greenhouse Growing
Passionate about growing
Combined 750 years of master grower experience from multiple growing regions around the world
Have achieved record production yields for the industry
Experts in agricultural product safety
Leader in agricultural research and foremost in North America for developing improvements in greenhouse production technology
Applied Research Division continually making advancements in Climate Engineering, Plant Biology& Pathology, Entomology, and Ecology
Deep Greenhouse Growing Experience
Advanced GreenhouseTechnology
• Biological control• Pesticide registrations
Cannabis is an agricultural product like any other
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Greenhouse Growing
Advantages of Greenhouse Growing/Use of Existing Large-Scale Facilities
Use of Existing Large-Scale Facilities
Greenhouse systems and controls create a good growing climate for the crop in almost any location.
Proven at a Large Scale
Greater Energy Efficiency
Using all available natural sunlight results in significantly lower energy needs (far less artificial lighting, with little to no heat extraction requirements).
Existing state-of-the-art greenhouses are significantly quicker to bring into production than new construction.
Speed to Market
Experience is an Asset
Management/growing teams at established greenhouses know their systems, have years of experience managing local climate conditions and, most importantly, have established labor workforces with an ingrained quality culture.
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Ingrained culture of high-quality, low-cost production built over decades
Greenhouse growing provides significant capital and operating cost efficiencies
• Lower energy needs
• Greater economies of scale
• Allows for greater scale
GOAL: Be the Low-Cost, High-Quality Cannabis Producer in Canada
Existing state-of-the-art greenhouses with significant scale minimize capital costs
conservative target of
<$1.00/gram1
vs. industry avg. of
$2.25/gram2
Village Farms is one of the lowest-cost greenhouse growers of tomatoes & cucumbers in Canada/U.S.
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1. Includes depreciation expense.2. Source: Public company filings and Office of the Parliamentary Budget Office - Legalized Cannabis: Fiscal Considerations.
Phase 1: Delta 3 Greenhouse
>50%
1.1 M sq. ft. of greenhouse capacity
75,000 kg annually
projected EBITDA margins of
vs. mid-single digits for produce in Canada
potential to generate revenue of
10-15x that of produce
Significantly more profitable use of existing greenhouse assets
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(25 acres)
conservative projected yield of
Step-Function Future Growth Opportunity
4.8M sq. ft.(110 acres) of total growing capacity
conservative projected yield of
300,000 kgannually
Delta 2Delta 3 Delta 11.1 M sq. ft.
(25 acres)1.1 M sq. ft.
(25 acres)
2.6 M sq. ft.(60 acres)
Pure Sunfarmshas options for Delta 1 and Delta 2
greenhouses
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Critical Path and Key Milestones
June 2017
Generate First
Cannabis Revenue
File Cultivation
License Application
Obtain Cultivation
License
Complete Conversion
of First Quadrant of
Delta 3 to Licensing Standards
September 2017
Target: February 2018
Initiate Cultivation
License Process
Expect to begin commercial production prior to July 1, 2018
Obtain SellingLicense
1. Subject to receipt of cultivation and sales licenses.
Target: 75,000 kg of production in 2020
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Commence Conversion
of Delta 3 to Cannabis Licensing Standards
October2017
✓✓ ✓
Canadian Cannabis Market Fundamentals
Medical Market
Canadian industry for legalized medical cannabis was born in the early 2000s+
Currently 62 licenses granted
• Registered patient base has grown 10% month-over-month and 200%+ annually since June 2014
• Average price across public LPs is ~$8.00/gram
Currently regulated by the Access to Cannabis for Medical Purposes Regulation
Poised to grow 10-fold to $1.3 B by 20241
Non-therapeutic Market
Legislation tabled for the legalization of non-therapeutic
cannabis
$5 to $9B market opportunity2
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Estimated that >30% of Canadians would use cannabis
if it was legalized1
1. Health Canada.2. Deloitte Report: “Recreational Marijuana – Insights and Opportunities.
Projected Near-Term Shortfall of Supply in Canada
Pure Sunfarms has the potential to address ~1/2 of the overall market
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Estimated Demand
by 2021:Estimated
Existing Industry Capacity:
~90,000 kg
Estimated Demand by 2021:
~600,000 kg
300,000
160,000
108,000 100,00062,000 50,000 44,000 35,000 26,000 25,500
PureSunfarms
Industry Capacity
Pure Sunfarms will be a large-scale producer of cannabis
Existing and Announced Future Capacity of Public LPs with Market Capitalization Greater than $275 million
At October 30, 2017. Market cap fully diluted. Source: Research analyst estimates and company filings based on last reported capacity and disclosed growth strategy.
Market Cap (C$M) n/a $3,348 $ 1,365 $1,174 $311 $469 $645 $1,222 $338 $455Capacity Growth 5x 13x 11x 9x 42x 9x 4x 10x 10x
Existing Capacity (kg) Future Capacity (kg)
Existing LPs will attempt to meet demand through greenfield development requiring
hundreds of millions of dollars
Pure Sunfarms can quickly become the largest scale
producer of cannabis
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(JV)
Compelling Value Proposition
PLUS produce business and potential addition of 112,500 kg of production
Comparative Value: 2020 Planned Production Capacity
37,500kg50% of Phase 1 Pure Sunfarms production
~$146M
$3.89$15.23average
~$1,036Maverage
~68,000kgaverage
1. Fully diluted. At Oct 30, 2017. 2. WEED, ACB, APH, CMED, FIRE, MJN, LEAF, OGI, TRST.
2020 Planned
Production
Market Cap1
Market Cap/gram of
Planned Production
LPs with >$275M
Market Cap2
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Illustrative Financial Impact
Significantly more profitable use of existing greenhouse assets
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Targeted Output in 2020: 75,000 kg
Price $8.00/gram $6.00/gram $4.00/gram $2.00/gram
Pure Sunfarms Revenue $600.0 M $450.0 M $300.0 M $150.0 M
Pure Sunfarms EBITDA (Target production cost: $1.00/gram)
$525.0 M $375.0 M $225.0 M $75.0 M
Village Farms’ Share of EBITDA (50%) $262.5 M $187.5 M $112.5 M $37.5 M
Multiple of Village Farms’ 2016 EBITDA
21x 15x 9x 3x
v
Significantly De-Risked Opportunity
30-year operating history as high-quality, low-cost
greenhouse grower
Cannabis is an agricultural product
like any other
Greenhouse growing has significant quality, scale,
and cost benefits
High barriers to entry to greenhouse growing due
to capital costs and requisite expertise
Partner with direct cannabis industry/licensing experience and portfolio of high-quality
genetics
Growth opportunity through lease options on additional
existing greenhouses
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Use of existing, state-of-the-art greenhouses
Agricultural product expertise
vSpeed to market to address
non-therapeutic opportunity
JV Provides Strengthened Ability to Execute on Produce Growth Strategy
Organic initiatives to expand capacity at U.S. operations
Well positioned to lead consolidation of a fragmented industry
• Only greenhouse grower in North America to have completed a major acquisition
Village Farms will continue to be one of the largest, highest-quality, lowest-cost greenhouse growers of produce serving national grocers in the U.S. and Canada
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Investment Proposition
Diversification into cannabis is a transformational opportunity
Pure Sunfarms creates large-scale cannabis entity with the goal and capability to be the low-cost producer in Canada
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Use of existing greenhouse facilities for cannabis production provides advantage of speed to market to address near-term supply shortfall
Growth opportunities in both existing produce and cannabis JV
Solid produce business as one of the largest, most experienced, high quality, low-cost greenhouse growers
Key JV Metrics
Annual Output:Delta 3 Facility: 75,000 kgAll Facilities: 300,000 kg
Production Cost:<$1.00/gram
EBITDA Margin:>50%
50% Ownership of Pure Sunfarms
September 2017
Investor PresentationOctober 2017