June 2017 Forward looking statements 2 This presentation contains - - PowerPoint PPT Presentation

June 2017

Forward looking 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, 2016, 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

Market Facts

PRICE

TSX:VFF OTCBB:VFFIF CDN$1.90

MARKET CAPITALIZATION

~CDN$74M

SHARES OUTSTANDING

38.8M

(basic)

41.0M

(diluted)

52 WEEK HI/LOW

CDN$1.99 CDN$1.18

MANAGEMENT & BOARD OWNERSHIP

~30%

3 LISTING SYMBOL

(As of June 6, 2017)

Industry Leader in Large-Scale, High Tech, Low-Cost Greenhouse Growing

10.5 M

(240 ACRES) OF GREENHOUSE CAPACITY

TECHNOLOGICALLY ADVANCED

GREENHOUSE FACILITIES

IN PRODUCT QUALITY & SAFETY

750 YEARS

OF EXPERIENCE

• sq. ft.

30 YEARS

IN OPERATION 2016 REVENUE1 2016 EBITDA1

C$206M C$12.5M

4

• 1. Converted to Canadian dollars at $0.75.

MASTER GROWER TEAM WITH INDUSTRY LEADER

Vertically-integrated provider of premium produce to grocers across North America

Greenhouse growing produces a more consistent, higher quality product that customers demand and that commands a premium price Exclusive varieties address consumer demand in the specialty growth segment Strategically located greenhouses and logistics and distribution chain ensure the freshest, highest quality produce Marquee customers across the U.S. and Canada

Premium Produce Grown In the Most Sustainable, Resource-Efficient Manner

5

Strategically Located Operations and Distribution Network

3 facilities / 110 acres (4.8M sq. ft.)

British Columbia

VF Owned 4 facilities / 130 acres (5.7M sq. ft.)

Texas

VF Owned

Ontario

Our logistics and distribution chain ensures the freshest, highest-quality produce reaches consumers across Canada and the U.S.

6

Partner Greenhouses

Ontario: 65 acres British Columbia: 25 acres Mexico: 50 acres

Mexico

Financial Profile

7

(All figures in Canadian dollars unless otherwise stated)

At March 31, 2017

Cash: $5.2 M Long-Term Debt: $59 M

FY 2016

Revenue: $209 M (US$156 M) EBITDA: $12.6M (US$9.4) EBITDA Margin: 6%

EBITDA (C$ MILLIONS)

$13.8 $10.1 $14.1 $12.6 $11.6 $0 $5 $10 $15 2013 2014 2015 2016 LTM Q1/17

REVENUE (C$ MILLIONS)

$147.2 $158.9 $196.9 $209.1 $210.7 $0 $50 $100 $150 $200 $250 2013 2014 2015 2016 LTM Q1/17

CANNABIS JOINT VENTURE:

A TRANSFORMATIONAL OPPORTUNITY

Low Cost, Industry-Leading Scale with Speed To Market

Projected shortfall of supply based on current capacity and market demand Apply low-cost, high tech greenhouse growin ing expertis ise

4.8M sq. ft. of existing

greenhouse capacity (potential yield of 300,000 kg)

• 1. Medical and non-therapeutic adult use markets. Does not include export market Source:

Deloitte Report: “Recreational Marijuana – Insights and Opportunities. .

Market Need Transformational Opportunity

Canadian Cannabis demand estimated to grow to

~600,000 kg by 20211

Potential to address substantial portion of the market

9

Ability to Capitalize on Market Opportunity

Complementary Partners

Initial Contribution:

1.1 M sq. ft. (25 acre) greenhouse (leased to JV)

50% Ownership Initial Contribution:

$20M cash

High-tech, low-cost greenhouse growing & agricultural product safety expertise Cannabis industry compliance and licensing expertise

Joint Venture

for large-scale, high quality, low-cost cannabis production

50% Ownership

Options to lease additional 3.7 M sq. ft. (85 acres) of growing capacity

10

Cannabis IP, including portfolio

• f high-quality genetics

Emerald Health Therapeutics

Uniquely focused on application of cannabis to improve conventional pharmaceutical therapeutics Direct cannabis industry experience

• Licensed producer under ACMPR –

8th licensed issued Proven management team with extensive experience in pharma and agri-business Well capitalized: $40M in treasury

(TSXV:EMH) 11

Leaders in High-Tech, Low Cost Greenhouse Growing

Passionate about growing Combined 750 years of master grower experience from multiple growing regions around the world Have achieved record production yields for the industry Experts in agricultural product safety Leader in agricultural research and foremost in North America for developing improvements in greenhouse production technology Applied Research Division continually making advancements in Climate Engineering, Plant Biology & Pathology, Entomology, and Ecology

Deep Greenhouse Growing Experience Advanced Greenhouse Technology

• Biological control
• Pesticide registrations

Cannabis is an agricultural product like any other

12

Ingrained culture of high-quality, low-cost production built over decades Greenhouse growing provides significant capital and operating cost efficiencies

• Lower energy needs
• Greater economies of scale
• Allows for greater scale

GOAL: Be the Low-Cost Cannabis Producer in Canada

Existing state-of-the-art greenhouses with significant scale minimizes capital costs and provides faster time to market

conservative target of

<$1.00/gram

• vs. industry avg. of

$2.25/gram1

Village Farms is one of the lowest-cost greenhouse growers

• f tomatoes & cucumbers in Canada/U.S.

13

• 1. Source: Public company filings and Office of the Parliamentary Budget Office - Legalized Cannabis: Fiscal Considerations.

Phase 1: Delta 3 Greenhouse

>50%

1.1 M sq. ft. of greenhouse capacity

75,000 kg

annually

projected EBITDA margins of

• vs. mid-single digits for produce in Canada

potential to generate revenue of

10-15x that of produce

Significantly more profitable use of existing greenhouse assets

14 (25 acres)

conservative projected yield of

Step-Function Future Growth Opportunity

4.8M sq. ft.

(110 acres) of total growing capacity conservative projected yield of

300,000 kg

annually

Delta 2 Delta 3 Delta 1

1.1 M sq. ft. (25 acres) 1.1 M sq. ft. (25 acres) 2.6 M sq. ft. (60 acres)

JV has options to lease Delta 1 and Delta 2 greenhouses

15

Critical Path and Key Milestones

June 6, 2017 June 2017

Completion

• f Tomato

Crop First Cannabis Revenue Commence Conversion of Delta 3 Greenhouse Obtain Cultivation License Completion

• f

Conversion to Licensing Standards

Summer 2017 Target: March 2018

JV Created Initiate Cultivation License Process

November 2017

Expect to begin growing by late 20181

Obtain Selling License

• 1. Subject to receipt of cultivation and sales licenses.

Use of existing greenhouse facilities provides JV with speed to market

16

Canadian Cannabis Market Fundamentals

Medical Market

Canadian industry for legalized medical cannabis was born in the early 2000s

+

Currently 45 registered LPs (owned by 37 companies)

• Registered patient base has grown

10% month-over-month and 200%+ annually since June 2014

• Average price across public LPs

is ~$8.00/gram Currently regulated by the Access to Cannabis for Medical Purposes Regulation

Poised to grow 10-fold to $1.3 B by 20241

Non-therapeutic Market

Legislation tabled for the legalization of non-therapeutic cannabis

$5to $9B market opportunity2

17 Estimated that >30% of Canadians would use cannabis if it was legalized1

• 1. Health Canada.
• 2. Deloitte Report: “Recreational Marijuana – Insights and Opportunities.

Projected Near-Term Shortfall of Supply in Canada

JV Has the Potential to address ~1/2 of the overall market

18

Estimated Existing Industry Production Capacity:

~80,000 kg

Estimated Demand by 2021:

600,000 kg

Industry Capacity

19

JV will be a large-scale producer of cannabis

Capacity and Announced Future Capacity of Public LPs with Market Capitalization Greater than $200 million

As at June 5, 2017. In C$ millions. Source: Research analyst estimates and company filings based on last reported capacity and disclosed growth strategy (1) Fully diluted market capitalization calculated using treasury method

Market Cap (C$MM)(1) n/a $769 $732 $1,202 $392 $858 ~$256 avg. Capacity Growth 19x 9x 2x 42x 5x 6x

300,000 100,000 75,000 57,000 50,000 35,000 78,000 Joint Venture Other Current Capacity (kg) Future Capacity (kg)

JV can quickly become the largest scale producer of cannabis Existing LPs will attempt to meet demand through greenfield development requiring hundreds of millions of dollars

v

Significantly De-Risked Opportunity

30-year operating history as high-quality, low-cost greenhouse grower Cannabis is an agricultural product like any other Greenhouse growing has significant quality, scale, and cost benefits High barriers to entry to greenhouse growing due to capital costs and requisite expertise Partner with direct cannabis industry/licensing experience and portfolio of high-quality genetics Growth opportunity through lease options on additional existing greenhouses

20

Use of existing, state-of-the-art greenhouses Agricultural product expertise

v

Speed to market to address non-therapeutic opportunity

JV Provides Strengthened Ability to Execute on Produce Growth Strategy

Organic ic in initia itiatives to

• exp

xpand capacit ity at t U.S .S. op

• perati

tions Well ell pos

• sit

itioned to

• lea

lead con

• nsolid

idation of

• f a fr

fragmen ented in industry

• Only

ly gr gree eenhouse gr grower in in North America to

• have completed a majo

jor acq cquisition

Village Farms will continue to be one of the largest, highest-quality, lowest-cost greenhouse growers of produce serving national grocers in the U.S. and Canada

21

Investment Proposition

Solid produce business as one of the largest, most experienced, high quality, low-cost greenhouse growers Diversification into cannabis is a transformational opportunity JV creates large-scale, greenhouse-grown cannabis entity with the goal and capability of being the low-cost producer in Canada

22

Use of existing greenhouse facilities for cannabis production provides advantage of speed to market to address near-term supply shortfall Growth opportunities in both existing produce and cannabis JV

June 2017