Village Farms (TSX: VFF) is evidently focused on the international markets. The company this morning revealed that it has entered into an option agreement to acquire an 80% stake in Leli Holland BV, a Netherlands-based cannabis license holder.
The option itself is said to have been acquired for EUR50,000, with the option enabling the firm to acquire a full 80% stake in the company. Once exercised, taking the 80% stake will cost the firm roughly EUR4.0 million, of which EUR1.0 million will be due immediately, and the remainder of which is based on development timelines.
Leli Holland is said to be one of just ten firms that was selected by lottery to receive a license for the cultivation and distribution of cannabis under the “Dutch Supply Chain Experiment.” The program will mark the first legal cannabis market in Europe on a recreational basis, with the program expected to run for an initial four years.
Currently, the two firms plan to jointly develop two indoor production facilities. Village is said to be responsible for the project development and commercialization, as well as managing ongoing operations, product development, branding and marketing, once it is a majority owner.
The option is exercisable at the direction of Village Farms.
Village Farms last traded at $10.77 on the TSX.
Information for this briefing was found via Sedar 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.
