October 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 October 11, 2019) MANAGEMENT LISTING MARKET 52-WEEK SHARES & BOARD PRICE SYMBOL CAPITALIZATION HIGH/LOW OUTSTANDING OWNERSHIP 49.2 M ~21.5% CDN$475 M CDN$24.25 TSX:VFF $9.65 CDN$3.98 (basic) (basic) 53.0 M US$355 M NASDAQ: $7.21 US$18.10 (diluted) US$8.50 1 (basic) VFF 1. Commenced trading on Nasdaq on February 21, 2019. Publicly traded company on TSX since 2006 Very strong alignment of management and shareholders 3
Leveraging decades of experience as a large-scale, low-cost, vertically integrated grower for nascent large market opportunities Canadian cannabis JV already one of the Canadian Legal Cannabis: largest producers in Canada and profitable $4B+ in 2019 1 Aggressively pursuing CPG strategy to capitalize on U.S. hemp/CBD opportunity Global Hemp-Derived CBD: (outdoor and greenhouse cultivation) $22B by 2022 2 Proven ability to quickly transition existing large-scale operations to new agricultural US Legal Cannabis: opportunities $25B by 2025 3 Focused on cash flow generation and profitability 4 4 1. Deloitte 2. Brightfield Group 3. New Frontier Data
Unmatched Nort rth Ameri rican Greenhouse Asse ssets 8.3 M sq. ft. (190 acres) Owned Ass ssets Ca Canada: De Delta, BC BC 1 Faci 1 acilit ity - Veg egetable les ft. (60 (60 ac acres) s) 2.6 M M sq. q. ft U.S .S.: Wes est t Texas 4 Faci acilit itie ies - Veg egetable les 5.7 .7 M sq. q. ft. ft. (13 (130 ac acres) Can annabis is JV JV 2.2 M sq. ft. (50 acres) (50% ownership) Canada: De Ca Delta, BC BC 2 Faci acilit itie ies: : De Delt lta 2 & & De Delt lta 3 (form (f ormerly ly owne wned by y Vi Villa lage Far arms) 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: 3.0 BC: 3.0 M sq. sq. ft. ft. (70 (70 ac acres) Vegetables 5 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 30 30-year Leaders history developing and operating in n crop op ma management regi egistratio ions in n Nort North Am Americ ica mega-scale greenhouses Decades of experience as a Proven vertically integrated grower/distributor, meeting the stringent specifications of tr track recor ord as as a a North America’s top grocers low-cos ost op oper erator or Cannabis and hemp are agricultural products like any other 6
Canada Pure Sunfarms: One of the Largest Vertically Integrated Cannabis Producers Del Delta, , BC BC 7
Pure Sunfarms: One of Canada’s Largest Vertically Integrated Producers 50%-Owned Joint Venture 2.2 M sq. ft. conservative projected annual yield of 150,000 kg PSF has an option on Delta 1 (owned by Village Farms) – expires Sept 2021 +2.6 M sq. ft. conservative projected annual yield of +180,000 kg Pure Sunfarms has the potential to address a substantial portion of forecasted Canadian demand 8
Dif ifferentiated Cannabis Str trategy Driv iving In Industry-Leading Performance Con onversion of of exis istin ing lar large sc scale, lo low-cost precis ision ag agricult ltural l op operations Extensive in-house facilities development and conversion expertise Proven operating systems and 20 years of site-specific experience Experienced growing/operational teams Decades of climatological data Established, trained labour force Supported by Village Farms’ three decades of experience growing many different crops 9
Pure Sunfarms is is Setting th the Standard in in Canada Ramp to full production of 75,000 kg annually at Delta 3 facility in <15 months 4th largest Canadian LP by cannabis sales 1 at CAD$32.3 M (Q2/19) Ability to be low-cost producer in Canada – lowest “all in” cost of production reported by a Canadian LP to date: $0.65/gm 2 Industry leading EBITDA margin: 78% (Q2/19) 1. Based on most recent quarter reported by publicly-traded Canadian LPs. 2. COGS per gram for Q2/19. COGS per gram (all in) is impacted by seasonal costs, primarily utilities and co-gen rentals that occur in winter months but not in summer months. Three consecutive quarters of profitability (all while still ramping to full production) 10 10
Delt lta 3: : Ra Rapid id Transit itio ion to Productio ion and Sa Sale les Ini nitia iate Commence Co Co Comple lete Ob Obtain in Exp Expand Expand Exp Al All Gr Growi wing Ob Obtain in Sale Sales Cultiv Cul ivatio ion Co Conversio ion Conversio Co ion of of Selli Sel ling Licensed Li Licensed Ar Li Area Ar Area in n “Packaging” Li License of of 1.1 M M ft ft 2 Qua uadrant 1 License Li Gr Growin wing g Ar Area to o 825,000 ft 2 Prod oductio ion Li License (275,000 ft 2 ) o 550,000 ft 2 Process (27 to June 2017 Oct 2017 April 2018 July 2018 Sept 2018 Jan 2019 Apr 2019 Sept 2019 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Sept 2019 Sept 2017 March 2018 May 2018 Sept 2018 Jan 2019 Mar 2019 May 2019 Co Commence Fi File Obtain Ob in Co Commence Commence Co Comple lete Co Comple lete Ob Obtain in Sales to Sal o Cul Cultiv ivatio ion Cultiv Cul ivatio ion Co Commercia ial- Sales to Sal o Conversio Co ion Al All Li Licensin ing for or al all Processing Provin incia ial l Li License License Li Scale Sc le Other LP Oth LPs Growin Gr wing g Ar Area Growin Gr wing g Ar Area: Licenses Li Who holesalers App Applic ication Prod oductio ion M ft 2 >1 M >1 Shipping of branded product to provincial wholesalers commenced mid-September 11 11
Transitioning to a Vertically In Integrated Branded Supplier Recent Lic License Amendment Allo llows Pure Su Sunfarms s to o Begin Se Selli lling Bran anded Pac ackaged Product Di Directly to o Provin incial/ l/Territoria ial Whole lesalers an and Authorized Retail ilers Cap apitali lizing on on th the cu current whole lesale Build ildin ing a a premier vertic icall lly in integrated opportunity to op o oth other Lic Licensed Producers su supplie lier with ith a a le lead adin ing bran and an and reputation ▪ President and CEO: Mandesh Dosanjh ▪ Wholesale distribution agreements with a Canadian LP ▪ Joined from LCBO: SVP, Supply Chain & Wholesale ▪ 2019: 40% of production @ fixed price ▪ Developed/managed LCBO’s supply chain/wholesale ▪ 2020-22: 25% of production @ prevailing market strategy for adult-use cannabis price ▪ Supply agreements for Ontario and B.C. (comprise more ▪ Realizing very favorable spot market pricing than 50% of Canadian population) – in discussions with ▪ Strong demand from other Licensed Producers other provincial/territorial wholesalers ▪ Strategic supply arrangement with one of Canada’s largest online medical cannabis platform Extraction capabilities targeted to be in place by end of 2019 12 12
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