On June 27, the Department of Justice (DOJ) will decide whether to roll back a policy that has allowed state-licensed marijuana businesses to operate without federal intervention—at least for the past eight years. Known as the Cole Memorandum, the DOJ policy was issued in 2009 by then-Deputy Attorney General James Cole. The memo directed federal prosecutors to take a hands-off approach to state-legal marijuana operations and not interfere with state marijuana laws. This policy has been in place for eight years now, and was a major step towards the creation of an industry that aims to serve as an economic engine for communities across the country.

Village Farms is one of the largest producers of licensed, high-quality medical cannabis in Canada, and an international producer of hemp-based nutraceutical products. Village Farms is focused on producing consistent, premium-quality crops and delivering expertise and value-added products to its customers.

Village Farms International, Inc. (CSE:VFF) (OTC: VFFIF) is preparing for a potential regulatory shift in the U.S. at the state and federal level as the legal cannabis industry will continue to grow in size. While many states are already legal, there are several that are not, and there is a chance that could change.. Read more about village farms stock forecast and let us know what you think. Village Farms Prepares for a Regulatory Shift in the U.S. As It… Exclusive interview with Village Farms president and CEO Michael DeGiglio. Village Farms (NASDAQ: VFF) (TSX: VFF) has more than 30 years of experience in greenhouse farming, from cut flowers to vegetables. When cannabis became legal in Canada, the American company saw an opportunity to leverage its greenhouse expertise and create more shareholder value by entering this new market. The company now offers a premium brand at an everyday price in the Canadian market and is considering how to expand its cannabinoid business in the United States. President and CEO Michael DeGiglio spoke with New Cannabis Ventures about Village Farm’s position in the Canadian market, its U.S. strategy and its growth trajectory. An audio recording of the entire interview is available at the end of this written summary. Decades of experience Using a greenhouse is a lot of work. Over the years, Village Farms has built numerous mega projects throughout North America, and this experience has helped the company succeed in the cannabis industry. While other Canadian operators have been forced to close their plants, Village Farms has doubled its capacity, according to DeGiglio. Today, Village Farms is an established manufacturer of greenhouses, but DeGiglio wasn’t always in agriculture. His background is in aviation; he served many years in the Navy as a tactical fighter pilot. After retiring as a captain in the Navy, he decided to go into business and settle down as a farmer. He first became interested in greenhouse construction in Europe and subsequently founded Village Farms. The company’s shares were listed on NASDAQ a few years ago. The company was privatized in 2000 and went public again in 2006 when it acquired a large greenhouse company in Canada. Transition to cannabis Throughout its history, the company has learned to adapt to changing market dynamics. Many years ago the company specialized in cut flowers, but this industry has largely moved to other countries, such as Colombia. The result was that Village Farms went into production. It now faces competition from lower labor costs in countries like Mexico. Today, cannabis provides a way for a company to create value for its shareholders. Canada does not currently allow the importation of cannabis. DeGiglio says Village Farms can only use its years of experience to compete with other Canadian producers. Village Farms analyzed the Canadian cannabis market for a year and a half before entering the market. The team wanted to make sure its business model was sustainable. Today, cannabis subsidiary Pure Sun Farms aims to become one of the largest producers in North America. Pure Sun Farms Team members Village Farms Prepares for a Regulatory Shift in the U.S. As It… Position on the Canadian market The Company’s cannabis operations are located in British Columbia. For the past five or six quarters, their flower has been the best-selling flower in the Ontario market. Village Farms plans to continue to dominate the flower market and is targeting a 20 percent market share in Canada, DeGiglio said. Flower remains a priority for the company; the Pure Sun Farms team is on the lookout for new varieties and higher potency to continue to meet consumer demand. The company has also branched out into other product categories, such as vape pens, prerolls, gum, and oils. DeGiglio believes it will take time to grow in these categories, but the company is determined. The company offers products such as flowers, prerolls and oils. Village Farms Prepares for a Regulatory Shift in the U.S. As It… The company does not belong to the category sweets or beverages. DeGiglio doesn’t necessarily want to get into the candy category, and as far as beverages go, Village Farms would rather wait for that category to gain popularity. US strategy Village Farms has carefully considered its strategy for the U.S. market. As a company listed on the Toronto Stock Exchange and NASDAQ, it will not participate in the U.S. cannabis industry until there is some form of federal legalization. The company has a large institutional shareholder base and does not want to risk being delisted, DeGiglio said. Although the company has yet to wait, it is closely following the legal situation and preparing to enter the market in various ways. First, the company has six million square feet of high-tech greenhouses in Southwest Texas. Because the number of medical licenses in the state is very limited, DeGiglio says no major MSO is currently competing in Texas. In due course, the Company will be ready to transform this facility and become a competitive low cost producer in this market. Once full legalization is a reality, the team at Village Farms expects interstate commerce to be an integral part of the industry. This change could allow the company to cover more states. Finally, Village Farms has been growing cannabis in the United States since it became legal in 2018. Pending clarification by the FDA, the health and wellness market represents a third potential entry point into the U.S. market. International strategy Outside North America, Village Farms focuses on the European market. The company is actively seeking to make a name for itself in the Dutch leisure sector. However, DeJiglio admits that the European market is still in its infancy and is developing slowly. Village Farms will proceed with caution in entering this market. Consolidation of the industry In Canada, Village Farms is a low cost producer that consistently has positive cash flow and EBITDA. It also has the ability to double or even triple its capacity. Under these circumstances, mergers and acquisitions in the Canadian market are not a priority. Mr. DeGiglio remains the largest shareholder in the company, putting him on an equal footing with the other shareholders. According to him, any dilution resulting from mergers and acquisitions should be highly beneficial to the company. Mergers and acquisitions in the areas of technology and intellectual property would certainly be of interest. In addition, the company is open for business in the United States or abroad. The company already has a stake in Altum International, a player in the Asia-Pacific region. Village Farms plans to begin exporting to Australia and may expand its position to Altum in the future. Capital position According to DeGiglio, Village Farms has $135 million in cash and a warrant that would bring the cash to $150 million. He currently believes that buying back shares is a good use of proceeds and the best return for shareholders. The Company recently announced a normal course issuer bid for up to 5% of its shares. The company is in a position where it does not currently require any additional capital. The Company has sufficient liquidity to convert its assets in Texas in a timely manner and to consider potential mergers and acquisitions. If Village Farms needs to raise additional capital, DeGiglio recommends looking at the company’s track record. The company organized a series of small promotions and marketed them. Growth curve Village Farms is expanding its capabilities in Canada. The company expects production to increase from 90 million grams to 180 million grams by this time next year. DeGiglio says the company never grows what it can’t sell. The company had $13 million worth of inventory in the fourth quarter and about the same amount in the first quarter. Village Farms plans to double its capacity in Canada. Village Farms Prepares for a Regulatory Shift in the U.S. As It… The company has 16 to 17 rooms to expand on the property. It always works with the possibility of reducing or increasing production according to market demand. For example, as a result of the COVID 19 pandemic, the company reduced production and stopped orders. Now he’s fully operational again. Although the pandemic has become a problem for the Canadian market, the company continues to work tirelessly to achieve a 20% market share. In the United States, Village Farms is awaiting regulatory changes. As the cannabis industry continues to evolve, the company is looking for ways to capitalize on this tremendous opportunity for consumer products in North America and in international markets. For more information, visit the Village Farms website. Listen to the interview in its entirety: Stay ahead of the crowd by subscribing to 420 Investor, the largest and most comprehensive subscription service for cannabis dealers and investors since 2013. Village Farms Prepares for a Regulatory Shift in the U.S. As It… Village Farms Prepares for a Regulatory Shift in the U.S. As It… Carrie Pallardi, a Chicago-based writer and editor, began her career in health care. Today she writes, edits and interviews subject matter experts in various sectors. As a published author, Carrie continues to tell compelling new stories to her network of readers. Please contact us for more information.

 

What’s the story behind the recent shakeup at Village Farms International, the Canadian cannabis company that’s notching a record-breaking global harvest of 45,000 kilograms in 2018?. Read more about why is village farms stock dropping and let us know what you think.

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