Good morning, ladies and gentlemen. Welcome to Village Farms International Second Quarter 2019 Financial Results Conference Call. Yesterday, after market close, Village Farms issued a news release reporting it's financial results for the second quarter ended June 30, 2019. That news release, along with the company's financial statements are available on SEDAR and 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 on 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 this 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 our various security filings, including Village Farms current annual information form for the year ending December 31, 2018 and MD&A for the quarter ending June 30, 2019, which are available on SEDAR. These forward-looking statements are made as of today's date, and except as required by applicable securities of law. And we undertake no obligation to publicly update or revise 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, Jeanette. Thanks, everyone for joining us both by telephone and internet today. Joining me for today's call is our chief financial officer, Stephen Ruffini and the attendee for the call. We'll start with a review of the excellent Q2 financial results for Pure Sunfarms, which contributed to one of the best quarters in recent memory for us here at Village Farms and provide an update of the steady progress of our U.S. hemp CBD initiatives. Steve will review our Q2 financial results in detail, return with some closing thoughts, and open it up to Q&A at the end.So, starting with Pure Sunfarms and our Q2 results, let me just say, as always for us, we will go straight to our results without deflection no matter what they are. We're not going to start out by some of our competitors who seem to talk about opening up a small dispensary in Timbuktu somewhere. And we're proud of our numbers.So, also, I want to dedicate this quarter, if there's such a thing, to our villagers, our core group of loyal shareholders who've been unwavering since we entered the space and have supported the company and believe in our ability to lead the cannabis industry in Canada long and strong to them.And now the results; and if you'll just humor me for a minute, when I received these results draft numbers about 10 day days ago, some of you -- I was in the navy for about 26 years with my active reserve time. And when we did off the candidate training with the baddest marine corps DIs you can ever imagine, everything you did was wrong. But toward the end, if you did something right before graduation, they used the term, "Looky looky here."And it's funny, I hadn't thought about that…

Thanks, Mike. Just to touch on each one of our business lines, produce, hemp, and cannabis relatively quickly, first, produce.Obviously, we are disappointed with our produce results;a gross loss on the quarter of $3 million is obviously disappointing. It is not the first time.Last time we had a gross loss in the quarter was in second quarter of 2012, as a result of a hailstorm, which ended the Texas crop rather quickly. In this particular instance, we've had -- as we've said, we've transitioned one of our greenhouse -- started transitioning one of our greenhouses. So, that crop has been pulled. Obviously, maintaining our labor force, etcetera is extremely important. So, those costs just hit our cost of sold directly. With respect to the other Texas greenhouses, they have had various pressures throughout this growing season, and the crop did not end well.As we've talked about in the past, most of our costs are fixed. We're trying to spread our crop over the full crop year with respect to the crop.When the crop doesn't end well, essentially, you accelerate those costs down to zero on June 30th. So, new crop in Texas going forward, we are looking to get back to a gross profit for the rest of the year with respect to our produce. With respect to SG&A, those are corporate SG&A costs. Historically, we've put those into the produce column because we've had those historical costs. Year on year, our SG&A increased 6%, excluding stock comp. Obviously, a year ago, we weren't on NASDAQ. A year ago, we were a foreign private issuer. We're no longer a foreign private issuer. So, we are spending dollars now getting ready to be fully SEC compliant on January 1st, which includes store-bought. Obviously, when we went on NASDAQ, needless to say…

Thanks, Steve. Just to review and conclude, our Q2 results are clear evidence of common mounds of transformation of the earnings potential of Village Farms. Pure Sunfarms already making meaningful contribution to our financial results. And that business is really just getting started. We expect Pure Sunfarms will deliver consistent quarter-on-quarter growth throughout this year and next driven by Delta 3 at full production capacity, the anticipated start of sales to the Ontario Cannabis Store, the provincial territory on private retails expansion of product sales into pre-rolled and oils and other fitting products, Delta 2 facility coming online next year doubling the capacity there.We continue to be optimistic about the potential for Pure Sunfarms to exercise the option on the Village Farms 2.6 million massive square foot Delta 1 facility and return and further expand production to as much as 300,000 kilograms or more;similarly, our hemp and CBD business well-positioned to contribute near-term growth revenue and earnings going into next year. First, sales that have biomass later this year. Sale of crude, as I said earlier, followed by our own CBD products next year. Expand our outdoor cultivation next year. Begin cultivation of Permian Basin greenhouses will start in Texas as soon as we're licensed to do so and positioned very well for the move for this massive opportunity USA.So, with that, we'll open up the session to Q&A, Operator.

[Operator Instructions] Your first question comes from the line of Doug Cooper with Beacon Securities.

Good morning, guys and congratulations on a great quarter. And Mike, it was a great update. I just want to focus in on the cost per gram and $0.65 in the quarter. How low do you think that can go as you get more economy to scale through the ramp-up? And I see that a number of Canadian LPs are moving to or bringing on outdoor grow. Can you just talk about maybe how that can compare and what your thoughts are around that?

Well, it's kind of funny, Doug. Every time I see a large LP announcing they're doing an outdoor grow, I shake my head because I just don't get it. It makes me think that you're having a difficult time executing on the technology side because to me, in Canada, it just doesn't make sense. Regarding the cost, I think we can drive our costs down. We're not saying we're going to -- we've always stuck to under a dollar a gram. And we're sticking to that. But clearly, I think our cost can be driven down. And this is on flower more and more.And of course, that cost will be significantly lower as we move into oil. But we've seen some really unbelievable things based on our years of growing multiple crops. I've seen it. And the team has seen it that it's pretty unbelievable where we think we can go with the right technology. Nothing we talk about now. But I think the possibility is really great in the future to drive costs to phenomenal low going forward. And it's all centered around plant health and processes and growing. So, I actually believe we can compete worldwide even if importation has opened up but that's not tomorrow. But I can't give you specific numbers, but I think we can still hammer it down.

Right. And then maybe just on the strategy side, presumably, the realized prices if you were able to sell directly right now would be a couple dollars higher per gram, at least. But from a strategic perspective, once you got the ability to do so, the cost per gram that other companies have reported thus far are certainly significantly, significantly higher. You mentioned the word disruptor. How much market share would your assets enable you to have? And what would be the strategy to do so? And to that end, you mentioned D1 there, briefly. What is the plan to bring that in? And how quickly can that be done? And if other companies start to have financial concerns -- obviously, we have one out there right now -- would there be assets out there that you would -- if you could buy them at pennies and a dollar, would that be of interest to you?

Well, yes. We always look at an asset if it's distressed. I think there's going to be a lot of assets that get repriced a couple times over the next couple years. I said a year ago that at some point, we may start the commoditization process because if we feel so confident in our costs -- look, at the end of the day, in Canada, the Canadian government wants to displace the illicit trade. And they're not going to do that by arresting anybody who's breaking the law. They're going to do it by pricing the product to be competitive or more competitive than the black market. So, that's going to set the bar on price.And then of course, they have to make their profit. And of course, taxes come out. So, at the end of the day, the growers are all going to have to compete at this price to take out the illicit trade. That's the bar. But if our cost of production continues down, then we could start to come down and push the commoditization. And the first guys I think at or $3.00-plus a gram. And then on the cost of production in the tubes. And take that additional market share. I would get down to $1.00 tomorrow if I could because I know with the cost of that facility now, we have the confidence to be. And I think it'd be hard for anybody to compete with that, especially as we move into more oils going forward because that production cost of flower is much higher than oil. So, I'm very confident where we can go for the future.

And maybe just my last question being you don't have -- because it's a wholesale business right now, you're not supporting brands at retail or on the SG&A cost and so forth. Once you get into your own brands -- and presumably, spending has to go up a little bit to do that -- what do you think the long-term EBITDA -- assuming where your costs are and pricing is today. But certainly, the 78% EBITDA margin is eye-popping. And what should the market be thinking about in terms of long-term sustainable EBITDA margins in your view?

Well, I would say this sets the bar for the EBITDA margin. So, plus or minus a couple of percent because SG&A -- marketing in Canada is not going to be like marketing in the USA. It's going to be a whole different venue. It's very controlled. And companies are spending all this money -- the Hollywood crowd, so to speak. You just don't get it in Canada. You're very restricted in what you can do. And Pure Sunfarms is going to roll out a great branding strategy that's based on the Pure Sunfarms brand.And it's going to be really based on the quality of the product we put in the marketplace. But I don't think that cost is going to really move our SG&A line up because as we double production, the cost -- our overall cost for SG&A is just going to be driven down even with that initial marketing post. We have a team in place; there's a great team fully in place today.So, I think the EBITDA margin is sustainable. And even if as it commoditizes out, those efficiencies, cost efficiencies that I can see are very real going forward. And I think we could sustain these kind of numbers for the foreseeable future.

Great. And just my last one; on the packaging license -- you mentioned it in your speech at the beginning. I know it's Health Canada, and you have no ability to push them. But what is your thought now on when this might be delivered?

I'm not going to say because I had talked to when we thought we would receive it. And that was predicated on knowing that we're compliant. And we are. To the best of my knowledge, we've met all the criteria. And it was also based on the time it was taking for other competitors. I can't say what the reason is. It's out of our control. I don't know if it has to do with some of the bad actors out there. CannTrust, these guys should be in jail as far as I'm concerned. And when that kind of stuff happens, I would think if I was working for Health Canada, it would affect my trust in other companies.And I'm going to kick up my processors across the board. So, that could be part of what's driving it recently. There's a lot of companies out there that have odor issues because they're located in the middle of a residential area. That's not the case with us. But that's getting traction. So, I think there's a lot of different forces at work. But it's going to come. And we have everything set up to go. So, whether it's a month or three months, I don't think it's going to affect our ability to execute very well this year. So, I'm not that worried about it. But I can't say when. I'll leave that up to the government to decide.

Great. Okay, that's it for me. Thanks, guys.

Your next question comes from the line of Andrew Partheniou with GMP Securities.

Hi, and thanks for taking my call and congrats on the outstanding quarter. I wanted to ask for the Pearson Farms utilization capacity in Q2, can you give us a little bit of color on where that was? And given that in Q3, it's going to be at full production, could be interesting to see what kind of increase in results that could mean.

Well, let's just say it was about half utilization. I know what the number is. I'd have to look it up. But based on the licensing, we picked up a lot of our licenses in a very short amount of time between December and February. And then of course, you have to propagate the plants before you get them to the growing room. So, I think we were about 50%. So, I would probably say that's a decent number to look at between the first half of the year and the second half of this year.

Okay. That's great. Thank you. And you mentioned that Emerald is not taking advantage of its 40% on its contract. Can you give a little bit of color on what kind of quantity they are buying if that's above or below what it's going to turn into at the beginning of next year?

This is Steve. It's roughly in line with their 25% for next year. It does vary. You got to remember Pearson Farms is producing fresh batches every single week. That's what it's designed to do. So, depending on the batch, depending on Emerald's product line, some instances, they're taking the full amount. And some instances, they're taking a lesser amount. But net-net, it's roughly in line with what their new supply room will be starting January 1.

Fantastic. Thanks for that.

Again, it's all being sold -- anything they passed on is all being sold at a higher price to other licensed producers.

Right. And you guys are still planning on unveiling the brand at the same time as receiving the packaging license?

Yes.

Yes, that's the plan.

Okay, great. Transitioning a little bit to the U.S. market, you spoke previously about market segmentation. Maybe you can discuss a little bit on the smokable hemp flower trend that we're seeing now. And given that the Texas greenhouse is probably better positioned for that than potentially an outdoor cultivation, like many people are doing, maybe you can give a little bit of color on how that fits into your strategy.

Well, we're certainly looking at that. That's a trend that's coming up. And as we said in early stages of talking about differentiating the market -- just say it's a 90%-10%, 90% CBD growing from hemp in the field versus 10% or 15% from a controlled environment -- that that validation for those percentages will come. And this is an example of a product line that's getting traction that would work very well in a controlled environment just because we're producing four to five crops per year per section for control to keep a quality flower as far as controlled environment versus outdoors. So, yes, we had touched on that before. And I think that's an area that we're definitely going to look at going forward.

I find it very interesting given -- I'm not sure how accurate the prices that we're seeing are, but it seems like it's ten times or above smokable flower versus biomass. So, it seems like an interesting opportunity. Given that and also the progress that you guys are making in the U.S. overall, can you give a little bit of color on maybe interest of potential buyers or the prices or volumes that you might be seeing on a preliminary basis for U.S. CBD products?

I don't think we're prepared to say that at this point in time. So, I think that's a big part of our strategic focus starting here in September through the rest of the year on exactly where we want to initiate and play in what part of that space. So, I think it's just too early on, Andrew to comment.

Okay, no worries. And just the last one for me, if I can put it in there is the USDA should be coming out with regulations sometime soon. Do you have any little bit of color that you can provide on that as well in terms of timeline?

Yes. Well, I'm really happy about the FDA and their possibility. If they take longer, it's fine with me because that's a lot of Village Farms' -- again, we want brand -- brand rules at the end of the day. There's no doubt about it. And as we look at a CBG pivot here, at least in the US without assets and what we're doing in the field, that branding side is very, very important. But our concept is you got to get the foundation right on a cultural side.And it's great to be a CBG company that has no tie to manufacturing or growing in this instant. But we don't see it that way mainly because the genetics have not been developed yet. And that will come. And at some point, it's OK to be purely a CBG company. So, with that said, even when it comes to regulatory processes, that gives us -- if the FDA takes another six-eight months, a year to get it right, that's helping us build this foundation over existing players in the space and are coming out of the existing players in the space that have been producing before it was decriminalized in December.So, we're happy about that,and I think the FDA plays an integral role in regulating the industry. So, we're glad to see that happening. And that they take their time just gives us more time to get our ducks in order.

Thanks, Andrew. We got to move on to the next question.

Thanks for your time.

Your next question comes from the line of Scott Fortune with ROTH Capital Partners.

Congrats, guys on a good quarter. Real quick follow-up on Pure Sunfarms. I know you're expecting the licensing. Can you step us through on the timing as far as the rollout of the brand and then how far along are you in discussions with the different providences outside of Ontario to begin selling it at those providences? How should we look at that?

We're a way along with the other providences. Just that most of them are waiting until we have the license to commit to a contract. But that dialogue is taking place. And I think it'll happen very quickly after the license. We talk about Ontario because we do, in fact, have a contract with Ontario while they're waiting to see us get our license. So, that's well under way. As far as the brand, the brand strategy is in place and ready to go; Pure Sunfarms has been working all out on that for about nine months. They're ready to go. But I think that'll coincide more or less with the license coming on board. And as I said earlier, I just don't know when that's going to happen. So, like everyone else, it's out of our control. And every Friday we wonder if it's this Friday.

And expanding upon that and the contraction strategy side of things, is there a percentage that you're targeting toward the cannabis 2.0? Step us through near-term extraction and until that slowly gets built out, what's the strategy from that standpoint?

Well, we're going to stay internal because we like to control the vertical all the way through. And I think we can do it at a fairly good cost. We're really shooting for GMP certification on our extraction side so that that market opens up even for exports. Europe, at some point, will be ready to go there. We have everything in place to be able to start extracting by year-end, this December pending on licensing. So, I think next year we'll be rolling forward. And as the market moves, and we bring on Delta 2, I wouldn't be surprised that next year, we could be looking at -- this is somewhere in the 30% range. I think in the future, it could be 50%. But I think 30% is probably a number I'm throwing out there. The Pure Sunfarms team would probably know better. But in some of the conversations we had, that seems to be a number going forward.

And then just real quick, on the US hemp side, obviously, the biomech is seeds and genetics for planting next year. Have you guys gone out for purchase seeds? And in a sense, what type of size from a harvest are you guys potentially planning for the following year?

Yes. We're not putting too many of those numbers out. I could tell you we purchased when there was no seed available back the end of last year. We purchased well over $2 million. So, clearly, it's always on our radar screen to be ahead of the curve. And we do have a number of initiatives that we haven't talked about tied to seed and genetics. Probably don't want to go there here because of competitive reasons. And I think a lot of folks are clearly working on the genetics. But until such times that the large, multibillion dollar seed companies get in the space -- and I don't think that's going to be too long -- I think a lot of the companies have to take that burden on. We are too, we're working with some great folks at some great universities pushing that forward. And the genetics even on the field side have to be tied to critical day length. And if you look at Texas alone as a state, it's like a country. There are so many different latitudes and climates. So, you have to gear those genetics to that.And the same in the greenhouse and looking at percentages of CBD and so on;so it's an exciting place to be. And of course, it creates IP if you're fortunate enough to hit on something that's the holy grail. And that's a big focus for us. But we are looking at next year. And I think we'll be in pretty good shape.

Your next question comes from the line of Eric Des Lauriers with Craig-Hallum Capital.

Thanks for taking my questions, guys and congratulations. I'm really impressed with Q2. I was wondering if I could just start with margins. Obviously, a great strong point for Pure Sunfarms. A little bit weaker as it relates to produce. So, if I could dig in there a little bit. So, on the produce side, margins impacted by a decrease in production, which with the fixed cost, obviously increases the cost per pound there. So, the conversion of the half the greenhouse in Texas obviously having an impact, Delta 2 as well, could you give us a sense of how much this interim period, especially as it relates to Texas -- we have no produce sales and no hemp sales. Can you give us a sense of how much that impacted your produce gross margins this quarter?

This is Steve. It's not insignificant, but it's not that insignificant. We're talking hundreds of thousands of dollars. It's not that significant. The bigger issue is the end of the Texas crop. This year, we had higher expectations. And essentially, you have to accelerate your -- we undercharged ourself on a per pound basis. So, we have to, at the end of the crop -- end of June 30th, that crop's all gone. So, you have to bring all those crops off out of inventory and run them through your income statement. So, it's really a catch-up for costs incurred in prior periods because the crop is gone. So, on a go-forward basis, as Mike said, the Delta 2 grow team will transition December 1. They're continuing to grow tomatoes as we talked about in the MG&A. Half that facility will begin conversion at the end of September.So, there will be some incremental overhead cost of goods incurred in the fourth quarter relating to Delta 2 that hit our books that have no revenue to generate against them as, again, we're planning on transitioning the growing team on December 1, as Mike said earlier.

But we can't underestimate the cost. The whole company is pivoting. So, a huge part of our costs is going into a different direction. And the cost of doing that over the last two years has all been -- it's being picked up because we report to them still as a produce company. But these costs are well within a normal SG&A percentage. But at the same time, we would not incur these costs if we weren't investing in a whole new area. We haven't taken a penny of profit or cash flow that's paying for the whole Village Farms team. And a lot of us are supporting that effort within the Village Farms team across every discipline from accounting and finance to R&D to asset development and the whole IT team and so on and then supporting our joint venture partners. That's a significant part of that cost. And to enter your question with -- as soon as we get the license, we're ready to roll. But if that half -- we can't control the USDA,the USDA has communicated.And they're going to get the regulatory process right. And if it takes three-four months longer, it is. And Texas can't move to that but in the long term, it's a great move for us.And the amount of hands -- that is one of the most high-tech facilities anywhere in the world. And we're going to take it to another bar. This is the time to make some technological advancements that we think will hugely pay off on the cannabis side. And I'm not at liberty to talk about them. But we'll take that time to do it. So, unlike other our competitors that have 110% SG&A costs and have burn rates of losing $300 million a quarter, in a way, that partly outburned the cost. But we're doing it with an underlying business that's supporting it. So, we feel good about that even though it's showing some negative loss to the business.

Got it, that makes sense. And then just one on the retail side of things;as we look at 2020, assuming you have the packaging license and amended sales agreement by then -- so, as we look at 2020 and maybe into '21, how should we think about your target breakdown between wholesale and retail?

We kind of touched on that on the previous call. But I think prudently would be around 20% deferential on the pricing because I think we want to remain -- we're carving out a sweet spot where we want to be on pricing where we would like to see our products sold. And I think even when you hear about some -- you hear some stories that there's an oversupply. Well, I don't believe that. If you're trying to sell your product at $14.00-$15.00 a gram, there's probably an oversupply. But if it's priced right, it's that every day. And as the team -- the Pure Sunfarms team will launch their concepts and brand, and I'm totally on board with it. But I think that positioning is where it's at. So, I don't think it'd be prudent to say we're going to see a huge 30%-40% deferential. I think it's probably be more in that 20% range.

Your next question comes from the line of Aaron Grey with Alliance Global Partners.

On the quarter, the first question's just going to be on -- you mentioned the spot market remains strong. Just wanted to get some color on where you see that going forward. And then what are you seeing in terms of the overall market supply and demand and when that might reach equilibrium?

Well, I think it'll happen. I think looking at the competitive landscape, as we already said, this, at the end of the day, is farming, be it high-tech farming. And farming is not for sissies or the weary, so to speak. It's hard business. And you need to be on your game 24 hours a day, 365, on the edge, pushing it. And you need to keep that plan in balance. And I look at the competitors, and I think sometimes they've taken it -- it's not like any other business. Every business is tough, but farming's real tough.So, I think that's where experience makes the difference in the know-how and being able to steer that crop and keep it healthy and performing well. It's like a finely tuned athlete. You need to be in your game, healthy every single day. And when you lose that, it affects you. So, I can't answer when the other folks will start wrapping up, they've been doing it a while.So, I would expect soon they're going to get the numbers going.And so, I really can't say. But our concept is based that everything commoditized in farming, and this will too. So, we're focused on our costs and being able to get a chair at the table when the music stops here.

All right, great. Thanks. And just touching again on gross margin, more on a long-term basis. As we look at the puts and takes there in terms of long-term pricing pressure, which seems to be inevitable as you mentioned commoditization earlier, but also upside and novel form factors, and also direct to providence sales makes sure you guys -- how best to look at the long-term gross margin opportunity for the company, at least for Pearson Farms?

Yes. Again, we're excited about getting the packaging license. We expect to be able to maintain and improve our gross margin dollars. Our gross margin percentage, because of the $1.00 tax will decrease a little bit. But the gross margin dollars will improve. And as we get into oils and extraction, again, we'll be -- that facility will be up and ready, operational by the end of this year. Obviously, we've got to get it licensed from Health Canada. So, we should see improved margin from extraction and oils beginning hopefully early 2020. And we'll see how the other various cannabis 2.0 develops in the marketplace. Ultimately, we're vertically integrated. We're in control. And actually, extraction-grade is actually cheaper to harvest because we're not dealing with all the post-harvest cost of the bud. So, I think we'll certainly be able to maintain a significant market-leading gross margin in all aspects of all products in Canada.

And your final question comes from the line of Hugh Cooper with RBC Financial.

Congratulations on the great quarter. I think most of my -- I had a few questions, which have been answered. Just wanted to say that you guys have been the one firm in the industry to under-promise and overdeliver. So, it's been very, very impressive. On Delta 3, you've got -- I managed a tour there. And I noticed that you had a fair amount of office space and a vault and so on. Delta 2 is only going to have that small extraction processing center. So, you're saying 75,000 kilograms out of each greenhouse. Some of the other LPs have said they're going to get a lot more out of their greenhouses. Is that a number that is flexible? Or is that a base number? Or are you guys just -- I don't want to cramp your style, but is that just a base number? Or can you increase that?

That's the number we're sticking to, Hugh. Look, I think you just got to look at the bio asset, which, by the way, we won't be reporting when we switch to US here in another quarter. But it's a great indication. And the possibilities are there. We've seen what can happen. And it's pretty mind-blowing where we think we can take it. But prudently, based on our experience, at some point, things happen. They always happen. It's not a question of if. It's a question of when.And we wanted to take the prudent approach with the new conversion to this crop and get four seasons under our belt. And it's going very well. So, Delta 2 is going to have a larger production footprint than Delta 3 as you pointed out. So, right there, there's a pickup gain.So, I think the answer is; sure,we can get there. And when others say they can get it, they haven't gotten it. So, everybody's saying what they can produce. But who's doing it so far? We're meeting our criteria because we had realistic goals to set. And I think at some point, we'll update that. So, I hope that answers your question.

It does. And just lastly, you've got -- I know you guys have a lot on your plate. But are you contemplating or looking at or have you been to any talks, discussions about joint venturing anything outside of Canada or the U.S.?

We can't comment on that. But Pure Sunfarms, we structured the company with the total ability to do whatever it wants anywhere in the world. So, I think Pure Sunfarms with Delta 2 well on its way, it's all planned out. The construction's going to start. I think the leadership at Pure Sunfarms is clearly looking at opportunities of expansion in the space in a number of areas. They should be doing it. And they are within Canada. And I think it's a very focused group. They're focused on expanding operations in Canada. And I don't mean just production operations but product innovation many different ways. And I think if they get that going and right, then they could probably look at international opportunities separate from Village Farms. And we're totally looking at that as well. So, I think there's more to come there for sure. And as we've always said, let's get the fundamentals right. We wanted to prove that we could make consistent profit, build a sustainable, durable company, profit first, and then go from there.Honestly, I see companies every day launching IPOs and all based on the CPG pedigree within the company. And these guys are very impressive. But there are a lot of great, talented executives in the CPG industry out there. And any company can bring those into the space because the space is new and growing. But it's not the same to get the fundamentals down on the farming side and the production side. You got to have the right product to have a good CPG company. So, we see it that way. And proving the profitability is where we wanted to start. And now I think it opens up a lot of opportunity for us both for Village Farms and Pure Sunfarms.

Okay. Thanks very much, guys.

Thank you. All right, thank you, everybody. That concludes it. No more questions. And we look forward to reporting in November. And thank you so much for your interest in Village Farms. Talk to you soon, bye.Thank you, Operator.

This concludes today's teleconference. You're welcome.