Village Farms International bought a majority stake in Quebec-based licensed cannabis producer and distributor Rose LifeScience, fulfilling the Florida-headquartered company’s pledge to gain a foothold in Canada’s second-biggest marijuana market by population.
Village Farms, parent company of British Columbia cannabis producer Pure Sunfarms, bought 70% ownership of the privately held business for up to 46.7 million Canadian dollars ($37 million), consisting of CA$19.9 million in cash and CA$26.8 million in shares.
In a September interview, Village Farms CEO Michael DeGiglio said the company was focused on entering the promising Quebec market.
In a note to investors, Doug Cooper, a Toronto-based analyst for Beacon Securities, said the acquisition likely will enable the company to sell Pure Sunfarms product in Quebec.
“With Quebec as the final piece of the Canadian puzzle, Pure Sunfarms will now be selling to more than 90% of the Canadian population,” the analyst wrote, adding that likely secures the market the company needs to bring the second half of its 1.1 million-square-foot B.C. facility into production.
In Quebec, Rose distributes its own brand of cannabis products.
It is also the distribution entity for cannabis producers Entourage Health, Sundial, Tilray and The Flowr Corp. as well as 10 micro and craft growers.
The deal includes Rose’s 55,000-square-foot cultivation and processing facility in Quebec.
Village said Rose’s headquarters and the company’s existing team will remain in Quebec.
“Rose immediately expands our reach to more than 90% of all Canadian retail cannabis sales and represents a major step forward in Pure Sunfarms’ strategy to become the leading national supplier of cannabis in Canada, with at least a 20% market share in the dried flower category,” Pure CEO Mandesh Dosanjh said.
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Rose CEO Davide Zaffino and Chief Operations Officer Brian Stevenson will remain in their current roles after the acquisition and have retained a 30% interest in the company they co-founded.
Village said the deal gives it a pathway to acquire the remainder of Rose if certain milestones are met before March 31, 2025.
Shares of Village Farms International are traded as VFF on the Nasdaq and Toronto Stock Exchange, respectively.