31 st ROTH Conference March 17-19, 2019 AN UNMATCHED PLATFORM FOR THE GLOBAL CANNABIS OPPORTUNITY 1
Forw rward Lo Lookin ing St Statements This presentation contains certain "forward looking statements". These statements relate to future events or future performance and reflect the Company's expectations regarding its growth, results of operations, performance, business prospects, opportunities or industry performance and trends. These forward looking statements reflect the Company's current internal projections, expectations or beliefs and are based on information currently available to the Company. In some cases, forward looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict" , "potential", "continue" or the negative of these terms or other comparable terminology. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. In evaluating these statements, you should specifically consider various factors, including, but not limited to, such risks and uncertainties as availability of resource, competitive pressures and changes in market activity, risks associated with U.S. and Canadian sales and foreign exchange, regulatory requirements and all of the other "Risk Factors" set out in the Company's current Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2018, which are available electronically at www.sedar.com. Actual results may differ materially from any forward looking statement. Although the Company believes that the forward looking statements contained in this presentation are based upon reasonable assumptions, you cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this presentation, and other than as specifically required by applicable law, the Company assumes no obligation to update or revise them to reflect new events or circumstances. 2
Mark rket Facts (As of March 13, 2019) MANAGEMENT LISTING MARKET SHARES 52-WEEK & BOARD PRICE SYMBOL CAPITALIZATION OUTSTANDING HIGH/LOW OWNERSHIP NASDAQ: US$12.75 ~ US$608 M 47.7 M US$13.97 ~22% (basic) (basic) VFF ~ US$653 M 51.2 M US$2.93 TSX:VFF (diluted) (diluted) Publicly traded company since 2006 Very strong alignment of management and shareholders 3
Canadian Legal Cannabis: $4B+ in 2019 1 US Legal Cannabis: Global Hemp CBD: $25B by 2025 2 $22B by 2022 4 Global Legal Cannabis: U.S. CBD Market:: $146B+ by 2025 3 $16B by 2025 5 3. Grand View Research 5. Cowen 1. Deloitte 2. New Frontier Data 4. Brightfield Group 4 4
Unmatched Nort rth Ameri rica Greenhouse Ass ssets 9.4 M sq. ft. (215 acres) Owned Ass ssets Ca Canada: De Delta, BC BC 2 Faci acilit itie ies ft. (85 (85 ac acres) s) 3.7 M M sq. q. ft U.S .S.: Wes est t Texas 4 4 Faci acilities s - Veg egetables 5.7 .7 M M sq. q. ft. ft. (13 (130 ac acres) Can annabis is JV JV 1.1 M sq. ft (25 acres) Ca Canada: De Delta, BC BC 50% % Own Ownership ip of of JV JV Gr Growin ing Mexico: 1.7 1.7+ M sq. sq. ft ft. (40 (40+ ac acres) Ontario: 3.0 3.0 M sq. sq. ft. ft. (70 (70 ac acres) Par artners BC: BC: 3.0 3.0 M sq. sq. ft. ft. (70 (70 ac acres) 5
Leaders in Le in Hig igh-Tech, Lo Low-Cost Vert rtic icall lly In Integrated Greenhouse Growin ing 750 years Exp xperts in n agric agricult ltural l pr prod oduct safety of combined master grower experience from around the world Decades of experience as a Leaders vertically integrated grower/distributor in n crop op ma management regi egistratio ions in n Nort North Am Americ ica 30-year 30 Proven history developing and operating mega-scale greenhouses track record as a low-cost operator Cannabis and hemp are agricultural products like any other 6
Fast t Mover Advantage: Abil ility ty to Rapidly Transiti tion to New Crops with ith Lower Ris isk Existing facilities require lower cap ex and allow faster time to market compared to new builds Existing operations with experienced management and skilled labor force enable faster ramp to profitability Proven operating systems and decades of site- specific experience allow for more effective climate management, providing higher yields Extensive in-house facilities development and conversion expertise 7
Canada On Track to be One of the Largest Vertically Integrated Producers Del Delta, , BC BC 8
Canada: Ca : On Track to be One of f th the La Largest Vert rtic icall lly In Integrated Producers PSF: Village Farms’ 50% -Owned JV 1.1 M sq. ft. conservative projected yield of 75,000 kg PSF has options on D1 & D2 (Owned by Village Farms) 3.7 M sq. ft. conservative projected yield of 255,000 kg Pure Sunfarms has the potential to address a substantial portion of forecasted Canadian demand 9
Creating One of Canada’s Largest Vertically Integrated Cannabis Companies Well ll pos ositioned for th the evolu lution of of th the Can anadia ian can annabis mar arket Capitalizing on the current wholesale Building a premier vertically integrated opportunity to other Licensed Producers supplier with a leading brand and reputation Appointed President and CEO: Mandesh Dosanjh ▪ Wholesale distribution agreement with a Canadian LP for ▪ Joined from LCBO: SVP, Supply Chain & Wholesale ▪ 40% of remainder of 2019 production Developed/managed LCBO’s supply chain/wholesale strategy for adult -use ▪ Supply shortage: Realizing very favorable spot market ▪ cannabis pricing Selected to supply Ontario Cannabis Store – in discussions for ▪ Strong demand from other Licensed Producers supply agreements with other gov’t distributors/private retailers ▪ Strategic supply arrangement with one of Canada’s largest ▪ online medical cannabis platforms Developing product and brand strategy ▪ Extraction capabilities in place by mid-2019 ▪ Pure Sunfarms is building a reputation for quality, consistency, safety and reliability 10
Ca Capit ital l Effic ficie ient, Rapid id Co Conversio ion of f Exi xistin ing Produce Operatio ion Fully automated, high-capacity nursery and 16 state-of-the-art flower rooms Meticulous attention to the growing environment and systems, processing areas and production ramp up Growing system with automation proven in different crops to provide optimal efficiencies Industry-leading HVAC systems based on extensive climate management experience, with technically advanced data systems High-tech light deprivation/supplementation systems Configured for continuous weekly harvesting year round 11
GOAL: : Be Be th the Lo Low-Cost, Hig igh-Quali lity Ca Cannabis is Producer r in in Ca Canada Ingrained culture of high-quality, low-cost production built over decades conservative target of Greenhouse growing provides significant capital <$1.00/gram and operating cost efficiencies ▪ Lower energy needs ▪ Greater economies of scale ▪ Allows for greater scale Continuous year-round harvesting and processing allows for a consistent, experienced, skilled agricultural labor force Ability to be sustainably profitable in a commoditized market 12
Rapid id Transit itio ion to Productio ion and Sa Sale le Ob Obtain Commence Sal Co Sales Ini nitia iate Co Commence Comple Co lete Co Conversion Ob Obtain in Exp Expand Li Licensed Exp Expand Li Licensed Processin ing Cul Cultiv ivatio ion Conversio Co ion of of of of Quad uadrant 1 Sel Selli ling Gr Growin wing g Ar Area to o Area to Ar o 825,000 to o Provin incia ial l License Process Li 1.1 M M sq. ft ft. (27 (275,000 sq. q. ft ft.) License Li 550,000 sq. q. ft ft. sq. q. ft ft. License Li Boar Bo ards/Retail ilers Q2 2019 Q2 2019 Oct 2017 April 2018 July 2018 Sept 2018 Jan 2019 June 2017 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Sept 2017 March 2018 May 2018 Sept 2018 Jan 2019 March 2019 Q2 2019 File Cult Fi Cultiv ivatio ion Obtain Ob in Co Commence Commence Comple Co lete Co Comple lete Li Licensin ing g Ob Obtain in License Li Cul Cultiv ivatio ion Commercia Co ial- Sales Sal Co Conversio ion Al All for or ALL ALL GR GROWING Packagin ing App Applic ication Li License Scale Sc le Prod oductio ion (Ot (Other LP LPs) Gr Growin wing g Ar Area AREAS: ARE : License Li >1 M >1 M sq. q. ft ft. Pure Sunfarms has consistently achieved key milestones on or ahead of schedule 13
Entir ire Growin ing Area Wil ill l Be Be in in Productio ion in in Apri ril l 2019 Growin Gr ing Area Ra Ramp Up Tar argeted Annual Production April 2019 August 2018 2019 January 2019: 46,000 – 52,000 kg 1.03 M sq. ft. 825,000 sq. ft. 1 in production ✓ 2020 75,000 kg 825,000 sq. ft. ✓ Expect to reach run-rate annual 550,000 sq. ft. production of ✓ 75,000 kg 275,000 sq. ft. Mid-2019 14
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