Village Farms International Applauds German Cannabis Progress
Village Farms International, Inc. applauds the passing of legislation in Germany partially legalizing cannabis for personal use, starting April 1, 2024. The new law aims to enhance patient access to high-quality legal cannabis products, boosting the German medicinal cannabis market. Village Farms, with strong ties to the German market, sees this as a significant step towards global cannabis legalization, leveraging its EU GMP certification and successful Canadian strain shipments to Germany. The company views the German market as pivotal to its international cannabis strategy, alongside its involvement in the Netherlands' legal recreational cannabis program.
The recent legislative change in Germany, which partially legalizes cannabis for personal use, is a significant development for companies operating in the cannabis industry. One of the key aspects to consider is how this will affect the demand dynamics within the German market. With the ability for individuals to possess, cultivate and obtain cannabis through social clubs, we can anticipate an increase in legal consumption. This could lead to a shift in consumer behavior, with potential customers transitioning from the black market to legal channels, thus expanding the total addressable market for companies like Village Farms International.
From a market research perspective, it's essential to monitor the trends and consumer preferences that will emerge as a result of this legislation. The demand for specific strains, product types and consumption methods may evolve and companies that are able to quickly adapt to these preferences will likely gain a competitive edge. Furthermore, the establishment of cannabis social clubs could create a new retail environment, which may influence marketing strategies and distribution models.
The removal of cannabis from the German Narcotics Act is a transformative legal development that opens up a new realm of regulatory compliance and opportunities. For businesses like Village Farms, it's important to navigate the regulatory landscape effectively to ensure compliance with both German laws and international regulations. The ability to cultivate up to three plants at home and the establishment of cannabis social clubs introduces a new legal framework that companies must understand in order to operate successfully within the market.
One area to watch is how the German government will regulate the production, distribution and sale of cannabis. The legal framework will likely include quality and safety standards, particularly since Village Farms boasts EU GMP certification. Companies that maintain high standards and comply with regulations can leverage this as a competitive advantage and a mark of trust for consumers.
The announcement by Village Farms International regarding the German cannabis legislation presents potential financial implications for the company and its investors. The expansion into the German market is likely to impact the company's revenue streams and could provide a significant growth opportunity. With Germany's position as Europe's largest economy, the opening of its market to legal cannabis could serve as a catalyst for further European market liberalization, potentially increasing Village Farms' addressable market.
It's important to assess the company's current financial health and its capacity to scale operations to meet the anticipated increase in demand. Investors should look for indicators such as the company's capital expenditure plans, supply chain readiness and any strategic partnerships that may be formed to capitalize on this new market opportunity. While there's potential for increased revenues, investors should also be aware of the risks associated with regulatory changes and market competition as more players aim to enter the German market.
03/22/2024 - 03:30 PM
VANCOUVER, British Columbia and ORLANDO, Fla., March 22, 2024 (GLOBE NEWSWIRE) -- Village Farms International, Inc. (“Village Farms”) (NASDAQ: VFF) today applauded the passing of legislation partially legalizing cannabis for personal use in Germany, beginning April 1, 2024. The new legislation will provide patients with greater access to high quality, legal products, which will be beneficial to further growth of the German medicinal cannabis market.
“This is a milestone in the journey towards the legalization of cannabis for personal use in Europe and globally. Village Farms has a strong link to the German market, having received our EU GMP certification from the District Government of Dusseldorf in 2022. We began shipping our best-selling Canadian strains to Germany in the second quarter of 2023 and have been adding both local distributors and revenues since then. The German cannabis market is already core to Village Farms’ international cannabis strategy and, along with our participation in the Netherlands’ legal recreational cannabis program, central to our focus on legal cannabis opportunities in Europe,” said Michael DeGiglio, President and Chief Executive Officer, Village Farms.
Under the new legislation, cannabis has been removed from the German Narcotics Act, allowing adults to possess up to 25 grams (just under one ounce) of cannabis in public and up to 50 grams (just under two ounces) at home. It also permits adults to cultivate up to three cannabis plants at home and allows for the operation of “cannabis social clubs” (up to 500 members), from which adults can obtain up to 50 grams per month.
About Village Farms International
Village Farms leverages decades of experience as a large-scale, Controlled Environment Agriculture-based, vertically integrated supplier for high-value, high-growth plant-based Consumer Packaged Goods opportunities, with a strong foundation as a leading fresh produce supplier to grocery and large-format retailers throughout the US and Canada, and new high-growth opportunities in the cannabis and CBD categories in North America, the Netherlands and selected markets internationally.
In Canada, the Company's wholly-owned Canadian subsidiary, Pure Sunfarms, is one of the single largest cannabis operations in the world, the lowest-cost greenhouse producer and one of Canada’s best-selling brands. The Company also owns 70% of Québec-based, Rose LifeScience, a leading third-party cannabis products commercialization expert in the Province of Québec.
In the US, wholly-owned Balanced Health Botanicals is one of the leading CBD brands and e-commerce platforms in the country. Subject to compliance with all applicable US federal and state laws and stock exchange rules, Village Farms plans to enter the US high-THC cannabis market via multiple strategies, leveraging one of the largest greenhouse operations in the country (more than 5.5 million square feet in West Texas), as well as the operational and product expertise gained through Pure Sunfarms' cannabis success in Canada.
Internationally, Village Farms is targeting selected, nascent, legal cannabis and CBD opportunities with significant medium- and long-term potential, with an initial focus on the Asia-Pacific region and Europe.
Cautionary Statement Regarding Forward-Looking Information
As used in this Press Release, the terms “Village Farms”, “Village Farms International”, the “Company”, “we”, “us”, “our” and similar references refer to Village Farms International, Inc. and our consolidated subsidiaries, and the term “Common Shares” refers to our common shares, no par value. Our financial information is presented in U.S. dollars and all references in this Press Release to “$” means U.S. dollars and all references to “C$” means Canadian dollars.
This Press Release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the U.S. Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is subject to the safe harbor created by those sections. This Press Release also contains “forward-looking information” within the meaning of applicable Canadian securities laws. We refer to such forward-looking statements and forward-looking information collectively as “forward-looking statements”. Forward-looking statements may relate to the Company's future outlook or financial position and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, expansion plans, litigation, projected production, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the Company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the Company, the greenhouse vegetable or produce industry or the cannabis industry are forward-looking statements. In some cases, forward-looking information can be identified by such terms as “can”, “outlook”, “may”, “might”, “will”, “could”, “should”, “would”, “occur”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “try”, “estimate”, “predict”, “potential”, “continue”, “likely”, “schedule”, “objectives”, or the negative or grammatical variation thereof or other similar expressions concerning matters that are not historical facts. The forward-looking statements in this Press Release are subject to risks that may include, but are not limited to: our limited operating history in the cannabis and cannabinoids industry, including that of Pure Sunfarms, Inc. (“Pure Sunfarms”), Rose LifeScience Inc. (“Rose” or “Rose LifeScience”) and Balanced Health Botanicals, LLC (“Balanced Health”); the legal status of the cannabis business of Pure Sunfarms and Rose and the hemp business of Balanced Health; risks relating to the integration of Balanced Health and Rose into our consolidated business; risks relating to obtaining additional financing, including our dependence upon credit facilities; potential difficulties in achieving and/or maintaining profitability; variability of product pricing; risks inherent in the cannabis, hemp, CBD, cannabinoids, and agricultural businesses; market position; ability to leverage current business relationships for future business involving hemp and cannabinoids; the ability of Pure Sunfarms and Rose to cultivate and distribute cannabis in Canada; existing and new governmental regulations, including risks related to regulatory compliance and regarding obtaining and maintaining licenses; legal and operational risks relating to expected conversion of our greenhouses to cannabis production in Canada and in the United States; risks related to rules and regulations at the US federal (Food and Drug Administration and United States Department of Agriculture), state and municipal rules and regulations with respect to produce and hemp, cannabidiol-based products commercialization; retail consolidation, technological advances and other forms of competition; transportation disruptions; product liability and other potential litigation; retention of key executives; labor issues; uninsured and underinsured losses; vulnerability to rising energy costs; inflationary effects on costs of cultivation and transportation; recessionary effects on demand of our products; environmental, health and safety risks, foreign exchange exposure, risks associated with cross-border trade; difficulties in managing our growth; restrictive covenants under our credit facilities; natural catastrophes; the ongoing COVID-19 pandemic; and tax risks.
The Company has based these forward-looking statements on factors and assumptions about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. Although the forward-looking statements contained in this Press Release are based upon assumptions that management believes are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the Company's control, which may cause the Company's or the industry's actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the factors contained in the Company's filings with securities regulators, including this Press Release.
When relying on forward-looking statements to make decisions, the Company cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future results, performance, achievements, prospects and opportunities. The forward-looking statements made in this Press Release relate only to events or information as of the date on which the statements are made in this Press Release. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Contact Information
Lawrence Chamberlainlawrence.chamberlain@loderockadvisors.com
The legislation partially legalizing cannabis for personal use in Germany from April 1, 2024, is crucial for Village Farms as it enhances patient access to legal cannabis products, fostering growth in the German medicinal cannabis market.
The new law allows Village Farms to continue shipping its popular Canadian strains to Germany, expand its local distributor network, and increase revenues by tapping into the growing German cannabis market.
Under the new legislation, adults can possess up to 25 grams of cannabis in public and up to 50 grams at home. They can also grow up to three cannabis plants at home and join cannabis social clubs to access up to 50 grams per month.
Village Farms considers the German cannabis market as central to its international cannabis strategy, alongside its participation in the legal recreational cannabis program in the Netherlands, highlighting the company's focus on legal cannabis opportunities in Europe.
