| 2019-10-15 07:36:01|
VFF 07:36 10/15 10/15/19
Pure Sunfarms advised it would receive dispute notice from Emerald Health
Village Farms International announced that its 50%-owned joint venture for large-scale, low-cost, high-quality cannabis production, Pure Sunfarms, was advised by Emerald that it would be receiving a dispute notice from Emerald Health Therapeutics in respect of certain amounts for which Pure Sunfarms has invoiced Emerald under the Supply Agreement. The wholesale market price for cannabis in the markets where the Joint Venture sells its production has declined during the three months ended September 30 resulting in lower margins realized by the Joint Venture for its production as compared to the three months ended June 30. Where Emerald has not exercised its right, either in whole or in part, under a supply agreement between Emerald and the Joint Venture to purchase 40% of the Joint Venture's cannabis production, the Joint Venture has sold some of that excess production in the spot market at prices lower than the predetermined selling price to Emerald under the Supply Agreement. As at the date hereof, the Joint Venture has advised the Company that Emerald currently owes the Joint Venture approximately $7M of Price Deficiency Obligations, and Emerald has advised the Joint Venture that it does not agree with the Joint Venture's position and that it believes it is not responsible for any Price Deficiency Obligations under the Supply Agreement. For greater certainty, the Company is not a party to the Supply Agreement and any amounts owing thereunder are payable to the Joint Venture.