Veteran vegetable grower Village Farms International, Inc. (TSX and NASDAQ: VFF) is taking aim at emerging cannabis markets in the Asia-Pacific.
On Tuesday, the company inked a deal to buy 6.6 per cent of Australia’s Altum International Pty, Ltd., with the option to increase its ownership.
The terms of the deal were not disclosed.
Altum focuses on large-scale importation, distribution and marketing of CBD in the Asia-Pacific, a region that generally includes East Asia, South Asia, Southeast Asia and Oceania.
It’s especially interested in Hong Kong’s progressive markets, where in June, Altum opened Asia’s first dedicated CBD store called Found. The company is also involved in supplying craft brewers with CBD beer, and is working on supply deals for infused products at market-wide coffee and juice bars.
In a Tuesday statement, Village Farms said Altum was keeping a close eye on Australia and New Zealand’s medical and potential recreational cannabis markets. New Zealand will hold a referendum on the legalization of recreational weed during its federal election Sept. 19, 2020.
“Our partnership with Altum represents another meaningful step to leverage our three decades of experience in vertically integrated, intensive agriculture, as well as our cannabis success in Canada, for international CBD and cannabis opportunities,” CEO Michael DeGiglio said in a statement.
Village Farms is part of a majority-owned Canadian joint venture with Emerald Health Therapeutics Inc. (TSX-V: EMH) called Pure Sunfarms. The LP is based in Delta, B.C. and says it ships to 70 per cent of Canada’s population.
But Canada is small fry compared to Asia-Pacific.
“With approximately 4.5 billion people — more than four times that of the U.S., Canada and Europe combined — the Asia-Pacific market represents one such sizeable but nascent opportunity, with the addressable market for cannabis alone forecast to reach US$10 billion by 2024,” DeGiglio said.
Altum CEO Ean Alexander said the partnership will give his company a competitive, long-term advantage.
“This is truly a win-win outcome for both parties and our respective shareholders, as together we will be able to scale Altum’s business in what we expect will be one of the world’s largest cannabinoid consumer markets – with significant additional potential in the over-the-counter and prescription cannabis markets,” Alexander said.
Top image of skyscrapers in Hong Kong in 2014 by Estial via Wikimedia Commons