Village Farms International, Inc. [NASDAQ: VFF] revealed that it has inked an option agreement to purchase the 80% ownership interest in Netherlands-based Leli Holland B.V. (Leli) upon payment of EUR50,000. The founders at Leli share the same passion for the cannabis plant, VFF’s belief in the role of cannabis in health and wellness, the commitment of VFF to sustainable increasing practices, and the benefits of true vertically integrated operations.
As per the Option Agreement, Leli and Village Farms intends to build two indoor Controlled Environment Agriculture (CEA) production facilities, The CEA facilities will be constructed utilizing the Village Farms’ three-plus decades as a vertically integrated CEA grower, as well as its broad experience in cultivation and the successful Leli managing complex regulatory and authorization procedures in the Netherlands at both the federal and local levels, as well as specific cultivation experience.
Furthermore, Village Farms will be the majority holder of Leli, so it will be entitled to the growth of the project and product marketing throughout the fully vertically integrated business model. Moreover, the Netherland government has specified the total supply requirement for the ten approved producers participating in the Dutch Supply Chain Experiment to be nearly a minimum of 65,000 kilograms of dried flower yearly.
VFF disclosed that it is seeing the Dutch Supply Chain Experiment as an important step toward the extensive authorization of recreational cannabis in Europe, and VFF’s majority ownership of Leli as both an opportunity to take part in the first recreational market in Europe.
As per the Option Agreement, Village Farms will purchase 80% of Leli’s shares for a total of EUR3,950,000 million, of which EUR950,000 is outstanding and payable to Leli’s shareholders upon the exercise of the Option and the remainder outstanding and payable in three installments. The option is exercisable at the sole preference of Village Farms.