Summary
Village Farms International is a greenhouse operator looking to enter the Canadian medical marijuana industry.
They have the facilities, and partner, to potentially become a major player in the North American market.
The company is well positioned to enter the North American recreational marijuana market should the United States change their position under new leadership.
Let’s get right to it, Village Farms International (OTCQX:VFFIF or TSE:VFF) has the potential to be the low cost producer in the Canadian medical marijuana industry. This investment is based on stages of development, which I plan to explore with readers and let you know, in likely the most transparent way possible, how I plan to “play” this player in this promising industry.
Village Farms International has been a producer of cucumbers, bell peppers and tomatoes for most of its history. The company operates in the hydroponic greenhouse’s industry and has facilities all over North America. It has a profitable history but had some recent issues as pricing has been weak for its core products. The big story here is that they decided to make a major play into the marijuana industry, announcing a 50-50 partnership with Emerald Health (OTCQX:EMHTF) for conversion of one of their main greenhouses in Vancouver (with option to convert more over time) which they refer to as “Pure Sunfarms”.
This industry is becoming a major player on the Canadian market, and the medical marijuana market has been a promising area. The issue today is many of the major players are getting extremely expensive as the promise of legalized marijuana in Canada has investors salivating. This potential is not necessary to warrant an investment in Village Farms, but its potential (and the potential upside should that occur) may give us plenty of room to exit the investment should its return profile get too frothy.
credit:seekingalpha.com
