Emerald Health announces update on Pure Sunfarms supply agreement
Emerald Health Therapeutics announced that it has notified Pure Sunfarms, its 50%-owned joint venture, that it does not agree that Emerald has any liability under the current Supply Agreement between Emerald and the Joint Venture with respect to the Joint Venture's recent sales of cannabis to third parties at prices below the predetermined purchase price to Emerald set out in the Supply Agreement. Under the Supply Agreement, Emerald has the right to purchase, or reject, 40% of the cannabis production of the Joint Venture. If Emerald rejects cannabis offered to it by the Joint Venture, under certain circumstances, Emerald would be obligated to pay the difference between the Purchase Price and the price realized by the Joint Venture. Emerald believes that under the terms of the Supply Agreement, due to the manner in which the Joint Venture conducted its recent cannabis sales, it does not have a liability to the Joint Venture under the Supply Agreement. Emerald's belief is that under the terms of the Supply Agreement the manner in which the Joint Venture conducted certain cannabis sales does not create a liability for Emerald to the Joint Venture. As at the date hereof, the Joint Venture has attempted to invoice Emerald for approximately $7M under this provision of the Supply Agreement. Emerald has informed the Joint Venture that it does not believe it has any liability for such amounts to the Joint Venture under the Supply Agreement and has requested that this issue be addressed at the upcoming meeting of the Board of Directors of the Joint Venture.