AUGUST 2017 • COUNTRY LIFE IN BC


Village Farms set to roll with cannabis Diversification opportunity key


by PETER MITHAM


DELTA – It’s been two years since the BC Assessment Authority declared cannabis an agricultural crop for tax purposes. Soon, an established Delta greenhouse will be harvesting the fruits of that decision with the budding business of medical marijuana. Village Farms Canada LP


and Victoria-based Emerald Health Therapeutics Inc. have entered a joint venture to convert a 25-acre greenhouse into a federally licensed marijuana production facility. The greenhouse could produce up to 75,000 kilograms of marijuana annually. “We always look at alternative crops,” Michael DeGiglio, president and CEO of Village Farms, explained to Country Life in BC. “We are a public company so we have a fiduciary responsibility to look at increasing our revenues and more important, our profits.”


DeGiglio said the new


company will have its own executive team and staff and operate independent of Village Farms. It will also have its own name and a separate brand identity in the marketplace. “Our brand is strictly a food


brand,” he said. Village Farms is supplying


the greenhouse while Emerald Health is staking $20 million in cash. Emerald Health raised $29.5 million this year in two separate financings designed to fund development of a second 32-acre site near Vancouver International Airport. Among the backers was Eight Capital (formerly Dundee Capital Partners), whose parent company is a significant investor in BC agriculture through Blue Goose Cattle Co.


Village Farms is an ideal


partner, said Bin Huang, president and CEO of Emerald Health. An established greenhouse operator, it has the systems in place needed to ensure an efficient, low- cost production facility. “Scale, speed to market and also cost of production are the main reasons why we got into this partnership with Village Farms,” Huang said. The partnership will give Emerald Health a leg up while it finalizes lease arrangements and construction of the facility near YVR. The property will initially have 50,000 square feet but plans call for up to one million square feet


of production, processing and sales space. The facility will handle production from both its own greenhouses and the joint-venture’s. Diversification into cannabis through the partnership with Emerald Health was attractive for several reasons. Village Farms has cultivated a range of crops through its 30-year history, from standard greenhouse offerings like tomatoes, cucumbers and peppers to cut flowers, lettuces and herbs. “Recently we’ve had a


program looking at berries – blueberries, blackberries, specifically. We have a program looking at figs,” DeGiglio said. “Cannabis, to us, once it became legal in Canada, was just another crop.”


New crops are important


to greenhouse growers because global trade relationships have reduced greenhouse crops to commodities. Anything that gives growers an edge helps. “It’s tough today, it really is.


So we have to look at alternatives,” DeGiglio said. Village Farms isn’t the first


West Coast agricultural producer to embrace cannabis. Oregon decriminalized marijuana in 1973 and legalized medical use of cannabis in 1998. Recreational pot entered the mainstream with a ballot initiative in November 2014, and some wineries in


After 28 years, Pam and George Veenbaas of Matsqui Ag Repair are officially retired. While they sold their share of the business to partner Dave Kruk in 2005, Pam continued to work in the office and George in the shop until last month. JESSICA KRUK PHOTO


southern Oregon see weed as a potential complement to alcohol.


Closer to home, vegetable


grower Jive Turkey Gardens in Summerland operates Sweet Valley Cannabis Inc. Sweet Valley is primarily a consulting firm for medical producers, however, not a commercial grower or distributor. Delta Mayor Lois Jackson has been reticent to allow pharmaceutical crops on farmland but she seems to be coming around to the idea. Discussions with the municipality have been positive, DeGiglio says, and the regulations governing production in Canada are world-class. “We don’t expect any


impact whatsoever on the community,” he said. “Cannabis is so highly regulated and I think Canada is paving the way for the world.” Moreover, given the lack of public awareness about what


goes on within the walls of many local greenhouses, he expects most people will consider it business as usual. “Nobody even realizes


we’re growing tomatoes in there, so I don’t think this will be any different,” he said.


13


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