Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF) has entered into definitive agreements with certain institutional investors for the purchase and sale of an aggregate of 10,887,097 common shares in a registered direct offering, for expected gross proceeds of approximately $135 million (approximately CAD$171 million ). The company sold the shares at $12.40 (approximately CAD$15.70 ). The closing is expected to be on or about January 20, 2021. Village Farms said the net proceeds will be used for general working capital purposes.

The stock was dropping in early trading on the news but was lately selling at $14.35, not too far from the company’s 52-week high of $15.05.

The Road To Owning Pure Sunfarms

In March of 2020, Village Farms and Emerald Health Therapeutics (TSXV: EMH)(OTCQX: EMHTF) said that they had entered into a settlement agreement that would settle their prior disputes. The result was that Village Farms would own 53.5% of Pure Sunfarms (PSF) and Emerald would own 46.5% of Pure Sunfarms. Originally this was a 50/50 joint venture, but then the two companies had a falling out. Then on November 2, 2020 (subsequent to quarter-end), the company acquired all issued and outstanding shares of Pure Sunfarms, as a result of which Village Farms owned 100% of Pure Sunfarms.

On November 23, the company announced that Pure Sunfarms had received from Health Canada its Cannabis Research License to conduct human administration trials for sensory evaluation of cannabis, enabling it to engage in on-site assessments of the taste, sight, smell, or touch of its products at its Delta 3 cannabis facility in Delta, British Columbia.

“This license provides us with significant new opportunities in the formulation and refinement of our products, and underscores our commitment to innovation and the advancement of the Canadian cannabis consumer experience,” said Mandesh Dosanjh, President and Chief Executive Officer, Pure Sunfarms. “We look forward to leveraging this new capability to continue to extend Pure Sunfarms’ product leadership and further strengthen what is already one of Canada’s best-selling cannabis brands.”

Net income for the nine months ending September 30, 2020, included a $4.7 million gain on receipt of Pure Sunfarms shares from Emerald Health Therapeutics as per the Settlement Agreement and Mutual Release, dated March 2, 2020, by and between Village Farms International, Inc., Emerald Health Therapeutics Inc., Emerald Health Therapeutics Canada Inc., and Pure Sunfarms Corp.