Wednesday, August 27, 2025

Pure Sunfarms Drama Continues with Village Farms Indicating Emerald Health’s Claims Are Invalid

The dispute between Emerald Health Therapeutics (TSXV: EMH) and Village Farms (TSX: VFF) (NASDAQ: VFF) appears to be the hit drama of the holidays. Not wanting to disappoint viewers over the US holiday weekend, Village Farms further developed the story this morning by announcing that Emerald Health’s attempts to satisfy its debt with Pure Sunfarms have been deemed “invalid” by the joint venture – and they were done so weeks ago.

The drama began back on November 19, when Village Farms announced that Emerald Health had missed a $5.94 million cash payment due to Pure Sunfarms, related to earning its stake in the previously equally owned joint venture. More background on the story can be found here, however the short of it is that Village claimed stake to the equity payment by sending the cash over themselves after the notice of default period expired. Pure Sunfarms later confirmed that this payment was acceptable, and that Village’s stake would become a majority, however exact percentages won’t be determined until an appraisal process is conducted in February 2020.

Emerald Health, who is not currently in the strongest of financial positions, disputed Village Farm’s increase in equity on the basis that they were setting off the $5.94 million owed to Pure Sunfarms via a $13 million promissory note owed to Emerald. However, what Emerald failed to disclose according to Village Farms, is that the set-off claim, which was made November 14, was rejected the next day by the joint venture making the claim invalid.

The reason for rejection is stated to be that the promissory note is unrelated. As The Deep Dive previously reported, the cash to be paid monthly by Emerald is indicated within a signed agreement that the funds are for cash flow purposes – thus setting off debt would not satisfy meeting payment conditions. Emerald had also formally requested that the remaining of the $13 million promissory note be returned promptly to the issuer as a result of the dispute, however Pure Sunfarms has determined that this request is also invalid and non-compliant, which as a result will not be fulfilled.

Wednesday, Emerald Health identified that Pure Sunfarms, on an equity basis, was still equally owned by the two issuers. Emerald stated that it still owned 50% of the venture on the basis that the two firms still owned an equal amount of shares. While this appears to be correct on an equity level, Village has now indicated that while true on a common share basis, Pure Sunfarms has approved the equity increase for Village and that the issuer now has seen an increase in the share capital account, effectively increasing its ownership to a majority in the joint venture.

Lastly, in today’s news release Village Farms also identified that a $940,000 payment is due on December 2, 2019 by Emerald Health. If the payment is not fulfilled by December 16, Village will cover the tab and take a larger stake in the joint venture. Despite the dispute, Village also reassured shareholders that construction remains on schedule for the Delta 2 facility, with cannabis operations expected to commence during the second quarter of 2020.

Village Farms last traded at $8.83 on the TSX.


Information for this briefing was found via Sedar, Emerald Health Therapeutics, and Village Farms International. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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