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Village Farms International (NASDAQ:VFF) owned 53.5% of cannabis grower Pure Sunfarms as of Dec. 31, according to a press release issued on Tuesday. Previously, ownership of the joint venture had been a 50-50 split with Emerald Health Therapeutics (OTC:EMHTF). However, when Emerald failed to make an equity payment by Nov. 19, a dispute arose as to whether the large greenhouse grower could use that as an opportunity to contribute additional funds to Pure Sunfarms and take a majority stake in the pot producer.
Emerald asserted that it still had a 50% stake in Pure Sunfarms. And in January, it looked as if the issue was closed after Village Farms said that it would opt to receive a refund for the additional contribution that it had made in November.
But on Tuesday, Village Farms announced that the dispute with Emerald was now completely resolved in a different way, and that its stake in Pure Sunfarms would be increasing. Village Farms will contribute another 8 million Canadian dollars to Pure Sunfarms in 2020, boosting its stake in the cannabis grower to 57.4%.
Image source: Getty Images.
Its investment in Pure Sunfarms has been a big reason why Village Farms has been able to produce profits in three of its past four quarters.
During the past three quarters, the greenhouse giant has benefited from a CA$17.9 million boost to its bottom line as a result of its joint ventures — among them, Pure Sunfarms. The cannabis producer is one of the largest in Canada and among the top-selling brands in the Ontario Cannabis Store.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.”>