Pure Sunfarms, the joint venture between Emerald Health Therapeutics (TSXV: EMH) and Village Farms (TSX: VFF) announced this morning that it had received its sales licensing for its massive 1.1 million square foot Delta facility.
Previously, Pure Sunfarms had been acquiring revenue through the business to business sale of its products to that of Emerald Health as well as other licensed producers across Canada. While wholesale sale of cannabis typically generates lower revenue on a per gram basis, the lack of individual packaging typically means that margins are not negatively impacted.
Now that the firm has acquired its sales license, it will allow the joint venture to sell directly to provincial retailers and medical patients. As a result, the company will be able to acquire a higher price per gram on the product it sells, while also developing a retail brand for its product. Which is a good thing, as the firm recently ramped to a production capacity of 75,000 kilograms per annum in July, and that figure is expected to double next year.
Pure Sunfarms has already established itself as a premiere supplier of cannabis products to other licensed producers and with this amendment it can now begin building a differentiated and enduring brand based on its best-in-class, low-cost growing operations with Canadian consumers.
Michael DeGiglio, CEO, Village Farms International
Pure Sunfarms currently has agreements in place with provincial distributors in both British Columbia and Ontario, whom it expects to begin product shipments to in the near term.
Pure Sunfarms generated revenues of $32.4 million during the three month period ended June 30, with an all in cost per gram of $0.65, and gross mrgins of 84%, making it one of the most efficient producers of cannabis in the space.
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.
