Investor Presentation January 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 for the year ended December 31, 2017 and the most recent management's discussion and analysis for the quarter ended September 30, 2018, which is 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 3 (As of January 28, 2019) MANAGEMENT LISTING MARKET SHARES 52-WEEK & BOARD PRICE SYMBOL CAPITALIZATION OUTSTANDING HIGH/LOW OWNERSHIP TSX:VFF C$6.76 ~ C$322 M 47.6 M C$9.50 ~22% (basic) (basic) OTCQX: VFFIF ~ C$346 M 51.2 M C$3.98 Application (diluted) (diluted) Submitted to List on NASDAQ Listed on the TSX 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: $146B+ by 2025 3 3. Grand View Research 1. Deloitte 2. New Frontier Data 4. Brightfield Group 4 4
Unmatched Nort rth Ameri rica Greenhouse Ass ssets 5 Owned Ass ssets 10.5 M sq. ft. of technologically advanced facilities (240 acres) Canada: De Ca Delta, BC BC 3 Faci acilit itie ies ft. (110 (110 ac acres) s) 4.8 M M sq. q. ft 1 Cannabis (1.1 M sq. ft) 2 Vegetables (3.7 M sq. ft.) U.S .S.: West t Texas 4 Faci 4 acilities s - Veg egetables 5.7 M M sq. q. ft ft. (13 (130 ac acres) Growin Gr ing Par artners Me Mexic ico: o: 1.7+ + M M sq. q. ft ft. (40 (40+ + ac acres) On Ontario io: 3.0 M M sq. q. ft ft. (70 (70 acr acres) BC: BC: 3.0 M M sq. q. ft ft. (70 (70 acr acres) 5
Le Leaders in in Hig igh-Tech, Lo Low-Cost Vert rtic icall lly In Integrated Greenhouse Growin ing 6 750 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 is an agricultural product like any other 6
Fast t Mover Advantage: Abil ility ty to Rapidly Transiti tion to New Crops with ith Lower Ris isk 7 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 7
Canada On Track to be One of the Largest Vertically Integrated Producers Del Delta, , BC BC 8
Ca Canada: : On Track to be One of f th the La Largest Vert rtic icall lly In Integrated Producers 9 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 300,000 kg Pure Sunfarms has the potential to address nearly half of forecasted Canadian demand 9
Creating One of Canada’s Largest Vertically Integrated Cannabis Companies 10 Well ll pos ositioned for th the evolu lution of of th the Can anadia ian can annabis mar arket Next St Ne Step: Immedia Im iate Term: Capitalize on wholesale opportunity Vertically integrated supplier with a leading brand and reputation Wholesale distribution agreement with a Canadian LP for Appointed President and CEO: Mandesh Dosanjh ▪ ▪ 40% of remainder of 2019 production Joined from LCBO: SVP, Supply Chain & Wholesale ▪ Developed/managed LCBO’s supply chain/ wholesale strategy for ▪ legalization of adult-use cannabis Supply shortage: Realizing very favorable spot market ▪ In advanced discussions for supply agreements with ▪ pricing provincial government distributors Developing product and brand strategy ▪ Strong demand from other Licensed Producers ▪ Experienced management team contributed by Village Farms ▪ Extraction capabilities in place by mid-2019 ▪ Committed to building a reputation for quality, consistency, safety and reliability 10 10
Capit Ca ital l Effic ficie ient, Rapid id Co Conversio ion of f Exi xistin ing Produce Operatio ion 11 Fully automated, high-capacity nursery and 16 state-of-the-art flower rooms in two different sizes for greater versatility 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 11
GOAL: : Be Be th the Lo Low-Cost, Hig igh-Quali lity Ca Cannabis is Producer r in in Ca Canada 12 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 12
Rapid id Transit itio ion to Productio ion and Sa Sale le 13 Init nitiate Co Commence Co Complete Co Conversion Ob Obtain Expand Li Exp Lice censed Expand Li Exp Lice censed Ob Obtain Expand Li Exp Lice censed Cul Cultiv ivatio ion Conversio Co ion of of of of Quad uadrant 1 Sel Selli ling Prod’n Area to Prod’n Area to Packagin ing Prod’n Area to License Process Li 1.1 M M sq. ft ft. (27 (275,000 sq. q. ft ft.) Li License 550,000 sq. q. ft ft. 825,000 sq. q. ft ft. Li License >1 >1 M M sq. q. ft ft. April 2018 July 2018 Sept 2018 Jan 2019 Q1 2019 Q1 2019 June 2017 Oct 2017 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Sept 2017 March 2018 May 2018 Sept 2018 Jan 2019 Q1 2019 Q1 2019 Fi File Cult Cultiv ivatio ion Obtain Ob in Commence Co Commence Co Comple lete Ob Obtain in Commence Sal Co Sales License Li Cultiv Cul ivatio ion Commercia Co ial- Sales Sal Conversio Co ion Al All Processin ing to o Provin incia ial l Applic App ication License Li Scale Sc le Prod oductio ion (Ot (Other LP LPs) Growin Gr wing g Ar Area Li License Bo Boar ards/Retail ilers Pure Sunfarms has consistently achieved key milestones on or ahead of schedule 13 13
Rapid id Ramp to La Large-Sc Scale le Co Commercia ial l Productio ion 14 Tar argeted Prod oductio ion Ar Area Ra Ramp Up Tar argeted Ann Annual l Prod oductio ion Q1 2019 August 2018 2019 January 2019: 46,000 – 52,000 kg 1.1 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 1. Production in Quadrant 1 temporarily suspended from October to February for installation of supplemental lighting. 14
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