Good morning, ladies and gentlemen. Welcome to Village Farms International’s First Quarter 2020 Financial Results Conference Call. Yesterday, Village Farms issued a news release reporting its financial results for the first quarter ended March 31st, 2020. That news release along with the company's financial statements are available on the company's website at villagefarms.com under the Investor's heading. Please note that today's call is being broadcast live over the Internet and will be archived for replay, both by telephone and via the Internet, beginning approximately one hour following completion of the call. Details of how to access the replays are available in yesterday's news release. Before we begin, let me remind you that forward-looking statements may be made today during or after the formal part of the conference call. Certain material assumptions were applied in providing these statements, many of which are beyond our control. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in forward-looking statements. A summary of these underlying assumptions, risks, and uncertainties is contained in a company's various securities filings with the SEC and the Canadian regulators, including its Form 10-K for the year ended December 31st, 2019 and the Form 10-Q for the quarter ended March 31st, 2020, which is available on Edgar and SEDAR. These forward-looking statements are made as of today's date and except as required by applicable securities law, we company undertake no obligation to publicly update or revise any such statements. I would now like to turn the call over to Michael DeGiglio, Chief Executive Officer of Village Farms International. Please go ahead, Mr. DeGiglio.

Thanks, Michelle, and thank you all for joining us today. Joining me for the call is Village Farms’ Chief Financial Officer, Steve Ruffini. I will begin by reviewing the highlights of the quarter, particularly noting the fifth consecutive quarter of profitability for Pure Sunfarms, which experienced a significant increase in retail branded sales from the previous quarter. After that, Steve will cover our financial results, and I will discuss our confidence in the company's future before answering any questions. I first want to provide an update on our operations during the COVID-19 pandemic. We are pleased to share that all Village Farms and Pure Sunfarms facilities in Canada, the U.S., and Mexico remain fully operational as they have been throughout the pandemic. The health and safety of our employees, customers, vendors, partners, and their families is our top priority. We continue to follow all recommended health and safety practices alongside our already high hygiene standards as a food producer. We take our responsibility as a major supplier of year-round fresh produce in North America seriously and have dedicated that same commitment to Pure Sunfarms. I want to express gratitude to our employees who have worked tirelessly to ensure safe produce reaches our retail partners, especially those who helped provide over 200 tons of produce to feed more than 10,000 families in Texas through donations to local food banks. Despite the difficulties posed by the pandemic, we are fortunate that our essential businesses have largely remained unaffected. Now, regarding Pure Sunfarms, which we own just under 59% of as of April 2nd. Pure Sunfarms continues to set the standard in the Canadian cannabis industry with its growing capabilities, best-in-class facilities, cultivation costs, managerial expertise, and brand performance. It remains one of the few profitable Canadian cannabis suppliers, achieving profitability for five consecutive quarters. This performance is unmatched in Canada. As anticipated, Pure Sunfarms saw a significant increase in sales volume in the first quarter, following its planned transition to primarily retail branded sales from the fourth quarter. Total net sales rose by 25% year-on-year to just over $18 million, with $8.5 million generated from retail branded sales. This represents an 118% increase in dollar sales from the fourth quarter, alongside a 179% increase in kilograms from the previous quarter. It's worth noting that Q1 was only the second quarter of retail branded sales for Pure Sunfarms, and the sequential growth also resulted from wholesale market activity. While this is positive, we do expect wholesale sales to be irregular for the foreseeable future. The notable growth in retail branded sales in Q1 was driven by various favorable factors. Pure Sunfarms' dried cannabis products are well-received by consumers across the three provinces where we sell. In Ontario, Pure Sunfarms outsold all other brands in dried cannabis during the first quarter, based on both volume and dollar sales. This marks the second consecutive quarter as a top-selling brand since its retail launch. Additionally, Pure Sunfarms had the best-selling product with the Ontario Cannabis Store, again based on both volume and dollar sales. In the first four months of the year, Pure Sunfarms held a 14.3% share of the Ontario dried cannabis market, with market share exceeding 20% in April. While it's early to draw conclusions from a single month of data in Ontario, we believe it indicates strong potential to achieve our goal of capturing at least 20% of the national dried cannabis market in Canada over the long term. Retail sales growth was also boosted by shipments to the newly expanded province of Alberta, where our products are receiving positive feedback from retailers and consumers alike. Alberta leads the five largest provinces with $60 per capita annual cannabis consumption, highlighting the importance of brick-and-mortar retail stores in driving sales. It's notable that robust sales growth in Ontario occurs in a market where brick-and-mortar stores are still significantly underserved, with per capita sales under $25. In comparison, per capita consumption in U.S. states with two or more years of legalization is much higher than Ontario, with Colorado at $99, Oregon at $97, and Washington at $89. Recently, Pure Sunfarms received approval from the Saskatchewan Liquor and Gaming Authority to sell to private retailers in Saskatchewan, taking a significant step toward launching in the province. Like Alberta, Saskatchewan has a notable market presence, accounting for 6% of cannabis sales with only 3% of the population. The first quarter also confirmed Pure Sunfarms' advantages concerning cultivation costs. The all-in cultivation cost for Q1 stood at $0.88 per gram, averaging under $0.74 for the past four quarters. Cultivation costs are naturally higher in winter due to lower yields and the need for supplemental lighting, compared to summer. We are confident that our leading greenhouse cultivation costs will not only facilitate further growth in the legal market but will also help capture market share from the illicit sector. Competing directly with the illicit market is crucial for driving sales, which is a key strategy for Pure Sunfarms, and we have the necessary tactics in place. At the same time, maintaining product quality, strain diversity, and potency remains essential. Our team constantly seeks to elevate product standards while working to further lower cultivation costs. The handling and use of pesticides will become increasingly significant to consumers. The tax revenue from the legal market will also be vital for governments, which is beneficial for the industry as a whole. Regarding pricing, it's clear that the number of Canadian suppliers needs to decrease for the industry's health, and we believe current pricing trends we are leading will eventually lead to consolidation. In late March, Pure Sunfarms launched its first large format value offering, a 28-gram package that maintains the high quality associated with the Pure Sunfarms brand. This product has the lowest price per gram of any dried cannabis product currently available in the three provinces where it's sold. I want to share some consumer feedback from social media that highlights our strategy to take market share from the illicit trade. One comment noted that after trying the 28-gram bag, they chose to switch back to the legal market due to its reasonable cost. Another said this offering is what the illegal market should fear, and yet another emphasized that this is how to combat the black market. It is rapidly becoming the top-selling product in Ontario, achieving significant sales volume within its first month on the market. Value is particularly important in these challenging economic times when consumers are more price-sensitive. This product broke an OCS record for sales volume in a one-week period in the dried flower category. The success of the 28-gram offering is not unexpected, as we're seeing a clear demand for high-quality products at competitive prices, and our provincial distributors are recognizing this. For instance, the Chief Commercial Officer of the Ontario Cannabis Store highlighted the significance of price and quality in capturing market share from the legacy market during an April interview, noting a 25% reduction in OCS prices since the year's start while giving a nod to Pure Sunfarms. We believe we are the ideal partner for the OCS in achieving its goals and we look forward to continuing our leading role. Pure Sunfarms plans to maintain aggressive pricing strategies with new product launches, including cannabis 2.0 products, always prioritizing quality and safety. Preparations for the introduction of wild products and 2.0 offerings are accelerating, and we expect to launch our first such products this summer. While I know you're eager for details, we will hold off until the launch for competitive reasons. Now turning to our U.S. CBD program, I previously mentioned how significant this appointment is, particularly following the federal decriminalization of hemp and CBD at the end of 2018. However, the lack of regulatory clarity from the FDA has stalled industry participation. Many companies in this space are struggling, leading major retail players to hesitate in their CBD strategies. The economic effects of the lack of direction from the FDA are particularly concerning, especially when the economy needs all potential growth drivers. We need clear leadership and guidance from the FDA immediately. That said, we are proactively seeking alternative paths forward that we can take wisely in the near term. We are engaged in market research and product development aimed at navigating the current regulatory environment. In our produce business, the first quarter saw higher pricing due to increased demand as consumers rushed to stock up amid pandemic concerns. However, we could only partially benefit, as we had to adhere to preexisting contracts with major retailers at prices below the spot market. Production volumes from our Texas facility remain below normal levels, but with the recent online addition of our newest growing plant, we have restored all capacity lost to cannabis in Canada and more. The strength and experience of our produce business provide a solid foundation for us to pursue new high-value, high-growth opportunities like CBD. While there are notable separations among the leading companies in the U.S., we believe we are uniquely positioned for a federally legalized cannabis market, especially in light of the anticipated need for stimulus and tax revenue in this election year. Our U.S. greenhouse assets have a replacement value exceeding $300 million, which none of our publicly traded Canadian peers can claim. I will now turn the call over to Steve to discuss the financial results.

Thanks, Mike. For those new to the Village Farms story, our cannabis joint venture with Pure Sunfarms cannot be consolidated for accounting purposes even though we own the majority of it, as the Pure Sunfarms board is jointly controlled. That said, we continue to provide full results for Pure Sunfarms to the investment public, so you can do comparisons with the other public Canadian licensed producers. The Pure Sunfarms March 31 balance sheet and Q1 income statement is contained in footnote number 6 in our financial statements. It is in U.S. dollars rather than Canadian dollars, as Village Farms is required to report factorial results in U.S. dollars. In an attempt to help the readers, we included the financial summary in our press release in both Canadian dollars and U.S. dollars. Unfortunately, we did not translate two figures correctly. While the Pure Sunfarms net sales figure for Q1 is correct at US$13.1 million, the breakout between retail and wholesale was not; the retail or branded sales figure should be in US$6.2 million and the wholesale in U.S. dollars should be US$6.9 million. The Canadian figures as shown in the press release are correct. As stated in our April earnings call, Pure Sunfarms experienced significant quarter-on-quarter growth in terms of sales and volume to provincial governments, with provincial sales of US$8.5 million in the quarter against Q4 2019 sales of approximately US$3.9 million, resulting in a 118% increase that was primarily driven by the increase in volume of 179%, going from roughly 1,100 grams in Q4 2019 to over 3,000 kilograms in the first quarter of 2020. This revenue represents selling into, in Q1 2020 versus selling in Q4 of 2019. As Mike said, Q1 of 2020 benefited from the initial sell into Alberta and the selling of the large format to Ontario cannabis store. When we're stating our market share figures that Mike provided, these represent sell-through; those figures are provided by the OCS retail channel and provided in point of sale data to the Pure Sunfarms brand team. The sell-through or POS data has been very strong for the large format product, particularly in April as it hit store shelves. You will note that this now comes at a lower price per gram obviously, with a lower gross margin to Pure Sunfarms than the retail sales of our house skews. The Q1 2020 wholesale business, which was non-existent in Q4 of 2019, as Mike said was lumpy, was finally driven by transactions with two Canadian extraction LPs for seeking dried cannabis flour in exchange for various forms of distillate. Pure Sunfarms entered into these transactions due to both the availability of high-grade extraction, flower, and trim, as well as the delay in its extraction license from Health Canada. So, in order for Pure Sunfarms to enter the Cannabis 2.0 market in December of 2020, it needed distillate, and as Mike mentioned, we'll be launching with Cannabis 2.0 skews this summer. As reported last May, so in May of 2019 Pure Sunfarms anticipated experiencing a very strong improvement year-on-year in our cost per gram as the Delta 3 facility, while it was fully licensed in Q1 of 2019, was not fully operational because it wasn't fully planted. Now the market can see the benefit of economies of scale, with a full winter of full-scale production, as well as an additional year of experience. We've brought down our cost per gram by 36% on a year-on-year basis from $1.38 a year ago to $0.88 this quarter for a $0.50 per gram difference. I also want to quickly review the Q1 financial impact of the March settlement agreement between Pure Sunfarms, Village Farms, and Emeralds. Both Village Farms and Pure Sunfarms recognized income in Q1 as a result of the transactions contained in the settlement. Pure Sunfarms recognized US$4.3 million of income in exchange with the cancellation of the outstanding liabilities that remained under the 2019 supply agreements, as well as the future supply agreement that Emerald wanted to get out of for 2020, 2021, and 2022. The amount of US$4.3 million represents the remaining shareholder loan that was outstanding between Emerald and Pure Sunfarms at CAD5.9 million, so one can look at this figure essentially as either debt burden income or as products revenue, but it could not be recognized as product revenue since product was delivered. In any event, it represents from an accounting perspective, an income recognition of US$4.3 million and is a one-time benefit. So, it has not been included in the EBITDA of either Pure Sunfarms or Village Farms represented in our financials. Additionally, as part of the settlement, Emerald transferred a 2.5% equity stake of Pure Sunfarms to Village Farms, which resulted in Village Farms recognizing other income of CAD4.7 million or CAD6.25 million as the value of the Pure Sunfarms stock received to avoid any guesswork on the various stock blogs. If you do the math that's an agreed value between the parties of Pure Sunfarms of CAD250 million. Our produce business, like cannabis, is an essential business. And as Mike said, it's not experienced any production issues related to COVID-19, for which we are very fortunate. That said, retail demand has been volatile. We saw very strong pricing as Mike mentioned in March. During the blackout, the holding period in early April, we saw fallouts in demand, even the retailer couldn't really explain that, because people were buying other things and other fresh produce, but recently we've seen very strong pricing in early May, compared to historical levels for early May. And fortunately for us, we dropped one of our large retail contracts effective March 31, so we are benefiting from that improved pricing in our own results in Q2. Just one thing to note, while not much happened with our U.S. tech business in Q1, we are having continued interest with respect to our existing biomass. I do want to note we received our license to grow hemp in Texas in March, but at this stage, we are not embarking on that until these regulatory hurdles are out of our way. And with that, I'll turn it over to Mike.

Okay. Thank you, Steve. So in conclusion, here we are a little over a year and a half into the legalized market for recreational cannabis in Canada. Amidst a market that has been slower to develop than expected and smaller economies than originally expected, but with just as much long-term potential, the industry is now really segmenting into leaders, survivors, and everyone else. From day one, we can see that in building Pure Sunfarms, we not only can be a leader in the cannabis industry but to be the leader. We focused first on getting the cultivation underpinnings right, providing the lowest cost of cultivation in the industry. We've done that with what we believe is the best management team in the business, and that team launched and immediately became and has consistently been the top-selling dried cannabis brand in Canada’s largest market. So I'm going to come back to something you've heard me say before, it's Ferrari's famous motto that we are the competition. And yes, it's a bold statement, but one that I'm proud to simply make about Pure Sunfarms, not with arrogance, but with confidence. It's the confidence that I've had since day one about 30 years ago in large scale, low-cost cultivation, knowledge experience, and DNA operational know-how on best-in-class facilities and operations, and it's the confidence I have today based on consistently being the top-selling dried cannabis in Ontario having the lowest costs of greenhouse cultivation in the country, and quarter-after-quarter generating profitability. No one knows exactly what the next 6 to 12 months look like; the unprecedented withdrawals of financial guidance by public companies, even the largest and most mature, are evidence of that. That said, I am comfortable with where our businesses are today and I remain very confident in what lies ahead. While the Canadian cannabis industry will likely see some choppiness in the near term due to the effects of the pandemic, Pure Sunfarms has a number of catalysts that directly leverage leading brand performance. The build-out of the retail store network in Ontario, further expansion across Canada, and the introduction of new products, including Cannabis 2.0 that make for a very exciting 2020 and beyond. So, thank you for listening. And we'd be happy to take some questions, if anyone has. Operator?

Hi, guys. Thanks for the questions and congrats on the quarter and the strong market share momentum heading into April. Just a first one from me, just in terms of the commentary on the price per gram for adult-use, just as you know, we look to have these large formats that's kind of become a higher portion of the mix going forward. How should we think about that, $2.8 per gram, kind of trending? And how much does that come down as we look to model going forward? Thank you.

I'm probably not going to answer that directly. But I think in general, that's our philosophy; as I clearly said, we have to be competitive, but the legacy business and pricing will just come down as we see that penetration. To the point where we believe the penetration rate will increase. We're going to remain with that strategy as we launch these other products this summer. And I think it'll be much clearer, maybe when we report the third quarter how that's going to look.

All right. Great. Thanks for that. And then the second question is just on 2.0 and the plans for launch this summer. While I can certainly appreciate for competitive reasons, I don't want to disclose too much. Could you maybe instead just talk about what you're seeing right now in the marketplace and maybe the opportunities you see specifically in oils or vapes edibles for Pure Sunfarms, given you know, how well you executed on the second mover advantage in Cannabis 1.0. So any commentary on your view of the competitive landscape and 2.0 products would be helpful? Thanks.

Well, I think the management team at Pure Sunfarms sat back and watched as they've done before, what was working from others and what was not working. So that's proven to be a positive for them. And in terms of not just the performance of the product but where the pricing needs to be, as they launch their first product, and I'm not going to say what it is, I think you'll see the same aggressive pricing strategy that they launched when they started retail sales in the fourth quarter. So again, that will show clearly when we report the second quarter. Thank you.

Hey, thanks. And congrats on a good quarter. So I'd like to talk a little bit about the supply chain dynamics. At the beginning of this year, we were hearing about the launch of 2.0 products. We were hearing that overall prevented distributors were changing their ordering dynamics and ordering more frequently, but less volume in order to be closer to just-in-time type of ordering dynamic? And just wondering now with COVID, have you seen any changes in that sense, perhaps volumes increasing or higher frequency in ordering?

No, I think there are so many moving parts; it's really hard to get a handle on it. But I would probably say that, like many other consumer products, there was a higher purchase toward the end of the first quarter. But I think that's going to thin out. My view is that it's going to probably contract somewhat in the second quarter, and then probably get back on track in the third and fourth quarters. I think, if you look at Ontario, sales aren't quite even back to the level they were in January. So I think we still need to get through the second quarter because it's kind of giving the provincial governments time to move through the inventory to assess what they have before they start replenishing.

Okay. Thanks. And maybe if I can dive a little deeper towards your comment on Ontario. Are you able to maybe give a little bit more color on how click and collect and delivery are doing? I know you just said that they're not back towards the level in January, but could you give it a little bit of color in terms of the types of magnitude or potentially, are they suffering from lack of inventory or is it just not being able to fulfill demand as quickly as before?

In response to that, Steve, we were a bit removed from those levels of details. Actually, from a delivery perspective, I was quite excited about it. One of the advantages the legacy business has is that the dealer is no longer a rep, he delivers it to the house, which is what's happening. So actually, the development of them closing, freaking us all out by closing the stores, and then changing their minds and having store pickup and home delivery. Hopefully, home delivery continues when things go back to normal. So, we don't have specifics for that, but I think it's also benefited the large format as well. People want to make less trips to go out. So hopefully, it turns out to be a long-term benefit for the legal industry.

Hi, good morning, guys, and congratulations on a great quarter. Just want to follow up your comments of 20% market share of the OCS in April. Can you talk a little bit about the breadth of redistribution beyond the OCS in Ontario?

Unfortunately, other provincial governments do not provide that information to Pure Sunfarms. So, I made an assumption. While some claim to know what percentage of the total market they represent, when we asked Pure Sunfarms about their market share in these other provincial sales, they stated that they didn't have that information. Therefore, we aren't going to report on data that we cannot substantiate.

How many retail stores in Ontario carry your product, and what percentage does that represent?

I don't know. I haven't asked the Pure Sunfarms team. I think they might know that. I can get back to you, maybe, but I don't know.

Okay. Do you just in terms of the large format, can you just remind us what the THC level is in that; is it sort of 18% to 22%? Is that the sort of range?

Yeah. I think we don't want to be looking very somewhat, but I mean that 28 packs in Indica and that's the sweet spot there is probably in 15 to 16 range and we're always striving to get that balance better and improve on that. But for the most part, that's the current range and it's been well accepted there.

Okay. Can you talk about there's some other kind of value packs being offered in the marketplace? What is there with the price advantage or that you have over those other value packs? In terms of where the retail is pricing them?

Well, I think what we've heard from Ontario set the lowest price. We have the lowest price. They are selling at the lowest price. They've come off 25%, as I said, and our product is being sold at the lowest price. But I think the key difference with anyone else is we're profitable doing it.

Right. Is it retail and just remind us, is it around $99 before HST, is that where we are at?

Yes.

Good morning. Thank you and congrats on the quarter. My lot of the questions have been answered, but I don't know if you break it down business coming from Ontario and the different provinces, can you provide just a little bit of color from Alberta NPC as far as the ramp or reorders are going there compared to what you experienced in Ontario at all, just kind of the throughput and reorders velocity from that standpoint?

Yeah, I mean, the reorders are coming in and that's something actually Scott that we're looking at. What's unique about at least from my experience, unlike dealing with large retailers here in Canada, U.S. where we're rolling out our forecasts and what we're going to be doing a year ahead of time, it's really not that way currently in the cannabis sector in Canada. So, it's hard to get a better handle on these projections going forward. But we are sitting in a good position in British Columbia and we just started with Alberta recently, so I think it's too early to say. That was something that finally we got going actually in the first quarter. So probably just feel better to answer that question when we get some traction towards reporting the second quarter.

Okay. And then I know you guys are continuing to explore the other provinces. Congrats on Saskatchewan, Quebec and Manitoba two other large provinces, even Yukon?

Well, obviously, the apple of their eye is Quebec, but hopefully that will happen sometime soon, but I don't know. We're not, Mike and I are not involved in the day-to-day, but I know there is ongoing discussion there.

All right. Thanks for taking my questions, guys. First thing for me, a bit of a follow-up on the previous question, I'm just wondering if you guys have noticed any change in regulators' appetite to either sign additional supply agreements or to license additional retail stores in light of COVID just any kind of impact that COVID may have on regulators signing new supply agreements or opening retail stores from you guys' point of view?

No, not tied to regulation that we're aware of. It's just kind of compressed and slow things down. But we haven't seen anything unusual, just a slowdown because of the essential business issues in general. So we have and just like in the U.S., we have but I will want to say with the U.S., I know that for your question, but we're starting to see some political flavor towards looking at the criminalization of cannabis. I think due to the pandemic's probably not the way we want them to get there. But again, that's a big possibility for Village Farms in the future, should that happen in the next year or so. And so that's a regulatory issue that we're looking at very clearly in the U.S. that would be beneficial to us going forward.

Okay. That makes sense. And then last one for me, great to see the impact that your low-cost bulk product has had in the market right now. Great demand, obviously seeing increased market share. You guys mentioned that you have new bulk products coming out, this Sativa blend as well as some 14-gram products. Anything you can share on sort of when you expect that to maybe hit your retail sales?

It's launched. I mean, it launched. We haven't seen POS data, but I think the initial shipments have shipped into whichever provincial governments are taking it. So we'll have more to report on that. But hopefully that does garner Pure Sunfarms additional market share in the market; those SKUs are in. Thank you, everyone. That concludes the call and thank you for participating today. It's much appreciated and wishing everybody be safe. Thank you.