Good morning, ladies and gentlemen. Welcome to Village Farms International's Q4 2020 financial results conference call. This morning, Village Farms issued a news release reporting its financial results for the Q4 and full year ended December 31st, 2020. That news release, along with the company's financial statements, are available on the company's website at villagefarms.com under the Investors 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 the 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 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 the company's various securities filings with the SEC and Canadian regulators, including its Form 10-K and AIF for the year ended December 31, 2020, which are available on EDGAR. These forward-looking statements are made as of today's date, except as required by applicable securities law. We undertake no obligation to publicly update or revise any such statement. I'd now like to turn the call over to Michael DeGiglio, Chief Executive Officer of Village Farms International. Please go ahead, Mr. DeGiglio. Thank you, Sharon. Hey, good morning, everyone. With me on today's call is Village Farms' Chief Financial Officer, Stephen Ruffini. This morning, I'm going to spend a few minutes highlighting the key takeaways for the quarter. Steve will then review financial results, and I'll return with some concluding thoughts before we open up the call to your questions. Before I begin, I want to note on the onset that Q4 was somewhat of a noisy quarter that, to a degree, masked the underlying strong performance of the Pure Sunfarms business. Under GAAP accounting, upon the acquisition of the balance of Pure Sunfarms, we were required to revalue Pure Sunfarms' inventory to its net realizable value. That meant writing up the portion of Pure Sunfarms' inventory we acquired from its exceptionally low cost of production to what we expected to sell it for. The end result was that from an accounting perspective, the inventory was sold through with a cost of goods sold equal to the selling price or for a zero margin. This resulted in a $3.3 million non-cash impact on Pure Sunfarms' reported gross margin and net income for the Q4. This is one of those accounting requirements that causes many of us non-accountants like myself, and I think even a lot of actual accountants to scratch our heads as the accounting moves clearly don't reflect the true underlying nature of actual transactions. There you go. For me, it actually underscores the significant value Pure Sunfarms is adding with its cultivation expertise, but I did want to call that out since it's unusual. On the positive side, however, we realized a $23.6 million gain from Pure Sunfarms acquisition that flow through Village Farms income statement separately, and also as a one-time item in the Q4. We believe this gain, to a very large extent, reflects the significant and sustainable value we have created in Pure Sunfarms since our original contribution in establishing the business. Stephen, who understands this much better than I, will walk through all of this in detail in a few minutes, but I did wanna highlight them for context before getting into the numbers. For the Q4, you know, what we feel was a very solid finish to a year of significant achievement for Village Farms. The highlight of the year was the acquisition of the remaining shares of Pure Sunfarms and welcoming that group into Village Farms family, fully into it. 2020 was a year in which Pure Sunfarms clearly established itself as Canada's premier cannabis company, and importantly, validates three core principles of the business model. The clear leader in cost of production in Canada, consistently the top-selling dry cannabis brand in Canada's largest provincial market, and consistently profitable. This is a model that has not changed since day one. With such a productive year, it's easy to forget that 2020 was very much a ramp-up year as we transitioned our focus to branded products for the retail market from the wholesale market. I couldn't be more pleased with our success. As 2021 and 2022 will also be ramp-up years for different reasons as we double our production to meet the growing demand for our retail branded products. As a reminder, we only began selling our branded retail products towards the very end of 2019 with the receipt of our distribution license. 97% of our sales in 2019 were to other cannabis producers during a period of very elevated pricing. The Q4 continued the momentum in retail branded sales to provincial distributors that we drove throughout the year, with those sales increasing 40% sequentially. That was on top of a 40% jump from just Q2 to Q3. The strong retail branded sales growth was driven by several factors. Even amidst the pandemic, the overall market continues its very healthy pace of growth, increasingly being driven by the transition from illicit sales to legal sales and a number of retail stores providing greater access for Canadians, particularly in Canada's largest provincial market, Ontario. The number of Ontario stores nearly doubled from Q3 to Q4 of last year for a total of 324 stores and appears to be on track for over 1,000 this year. Pure Sunfarms remains a top-selling dried cannabis brand within the Ontario Cannabis Store in Q4, as it was for the entire year and as it's been since the launch in October 2019. This is really an incredible achievement. This is an important data point since dried cannabis represents more than 57% of sales in Ontario, the largest provincial market. As a reminder, Ontario continues to be the only provincial market for which we receive definitive market share data, and this is why you hear us only discuss Ontario as opposed to the other provincial markets. I'll add here that recently, publicly available market research shows Pure Sunfarms leads all other brands in each of Ontario, Alberta, and British Columbia in dollar sales per individual SKU. We view this as yet another indication of success of our product strategy and another validation of our business model. Q4 was also the full quarter of sales from our Canadian 2.0 rollout, which has been very well-received by our customers. It was early days in a rollout, it still is, and only a limited number of products are still in the market. That should elevate going forward. Now turning to SG&A for a moment. During Q4, we pushed forward our planned investment in near-term growth initiatives at Pure Sunfarms and expansion, including the 2021, this year's start-up of the Delta 2 greenhouse, which Steve and I will come back to. Importantly, the spend on these initiatives is completely consistent with VFF's philosophy that we pay for growth and future growth through our current cash flow. Once again, the most important takeaway from the results for the quarter is the underlying strength of our model and its ability to consistently deliver profitability. You know, revenue is important, but it must come with profitability. That goes without saying. Pure Sunfarms delivered its 9th consecutive quarter of positive EBITDA. We've been positive EBITDA since the Q1 we started selling wholesale product, and this is also our 8th consecutive quarter of net income. After adjusting for GAAP requirements to write up the acquired inventory, according to the accountants that artificially erased more than $3 million of gross margins for the quarter. I will note that excluding the non-cash charge, Q4 gross margin was a healthy, very healthy, actually, 39%, up from 34% in Q3. On past calls, I've talked about the lumpiness of the non-branded or wholesale sales, which comprised of nearly half of Q3 total sales of $10.6 million in a somewhat active quarter for wholesale. Q4 was clearly less active, was a less active quarter at just over $7 million non-branded sales, as it appears despite the steady growth in the overall market, other producers were lightening up on purchases ahead of SKU rationalization of provincial distributors. We have heard of massive inventory levels at other LPs. I think once that's either digested through the system, written down or whatnot, we expect the wholesale market to realign sometime this year. As an aside, Pure Sunfarms, essentially unaffected by these rationalizations, again, a testament to our focus and well-thought of product strategy. We really lost nothing in the SKU rationalization at any provincial market, and that's a real credit to the team there. We are pleased to see the provincial governments taking action to streamline the breadth of their offerings as we think it ultimately benefits those with the best-selling products. As the Canadian market continues to develop, we will continue our pragmatic and disciplined approach to portfolio SKUs. To wrap up on Pure Sunfarms, from my viewpoint, when I look at the performance of the business in 2020, 2021, and expectations ahead, I clearly see a profitable business with strong fundamentals, a proven go-to-market strategy, and multiple growth drivers. I'll review those again in a few minutes. 2020 was also a year in which we took our first small but meaningful steps in our international cannabis strategy. Consistent with our prudent, capital-efficient approach to our growth opportunities, we are targeting select emerging cannabis markets with significant medium and long-term potential through investments with local early movers in their respective regions. Such was our investment with Australia-based Altum International, which targets access to the massive Asia-Pacific region. 2020 was a great year for Altum as it established itself as a leading supplier in CBD in Hong Kong and across three platforms: consumer brands, commercial products, and retail. We're excited about what 2021 has in store for Altum as it begins to build on the success in Hong Kong with expansion in other key Pacific Rim markets. On the heels of this success, we increased our stake once again in Altum in February. 2020 was also a very good year for our produce business as we benefit from favorable pricing environment due to the elevated demand resulting from the pandemic. Our significant progress over the last two years in transitioning capacity designated for cannabis to produce growing partners both in Canada and Mexico enabled us to take full advantage of the market dynamic. The pricing environment began to normalize in the back half of Q4, dampening the year-over-year growth we saw early in 2020. Profitability was impacted by production challenges at one of our U.S facilities, which Steve will discuss in a minute. For the year, produce delivered more than a $16 million improvement in adjusted EBITDA from 2019. Most importantly, I've spoken to many times, the organizational strength that underpins our produce business provides us with significant advantage as we pursue cannabis opportunities in the U.S as well as abroad. I'll turn it over to Steve now to talk about our finances in detail. Steve. Thanks, Mike. In the interest of time, I'm going to restrict my comments primarily to the Q4 results. Our full year financial results are available in our news release, in our regulatory filings, which will be available on EDGAR and SEDAR, et cetera, as well as on our website later today. As a reminder, our reported results from the Q4 reflect the consolidation of Pure Sunfarms following our acquisition of the remaining interest on November second. Beginning in Q1 2021 quarter, which we report on or before May tenth, as we are now an accelerated filer, Pure Sunfarms will be fully consolidated for the entire quarter. We will not have the noise of a one month of a JV and two months of consolidation. To assist the reader, in this quarter we have shown the Pure Sunfarms results in both Canadian dollars and U.S dollars as if it were a standalone company in our press release. For comparative purposes, I will speak to the produce results and Pure Sunfarms cannabis results independently, and then summarize some comments on the consolidated company. Starting with produce, sales for Q4 increased $1.5 million or about five percent, $34.6 million from $33.1 million in Q4 2019, driven mainly by an eight percent year-over-year increase in our average net selling price in the Q4 with a slight year-on-year decrease in pounds sold. As Mike mentioned, we saw market pricing of tomatoes, which has been elevated for much of the year right into the first part of Q4 as a result of pandemic related lockdowns. Recently, the price has retreated back to more normalized levels in Q1, partially driven by some recent weakness on a year-on-year basis in retail demand, we presume as people in the U.S. at least are starting to return to a more normal life from lockdown. The higher year-on-year selling price was offset by the acceleration of produce cost in Q4, caused by the impact of the brown rugose virus that is impacting the global tomato industry at one of our Texas greenhouses to the tune of roughly $2 million in the quarter. We increased our cost per pound of production in the quarter above our historical cost per pound at this facility, which resulted in the acceleration of production costs in the quarter. While the virus was not as detrimental to our 2020 results as the virus was to our 2019 results, it did cause a negative produce gross margin for the quarter. Gross margin for the year was $8.8 million, a significant improvement, as Mike mentioned, to the negative gross margin of $7.3 million in 2019. Turning now to cannabis. As Mike discussed, retail branded sales to provincial distributors for Q4 grew 30% sequentially, driven by our continued strong market share performance, as well as the first full quarter of sales for our Cannabis 2.0 products following the launch of our first oils and vapes partway through Q3. This was offset by non-branded sales, most of which are to other producers that were down 30% from Q3. As it appears, the overall wholesale market activity slowed during the quarter for the reasons Mike discussed earlier. While highly impacted by supply needs versus availability, especially as it pertains to potency, our quarter-on-quarter wholesale price actually increased in Q4 versus Q3. All flower is not created equal. As we have discussed, we expect quarter-to-quarter variability in wholesale sales volume and prices as the overall Canadian cannabis market and produce-producer landscape continues to evolve and mature. These are profitable sales that in the short term, drive additional cash flows as we continue to ramp up our retail branded sales, which of course is our primary focus. The sequential increase in retail branded sales and decrease in non-branded sales essentially netted out to a flat quarter for total sales at $22.5 million. On a proportionate basis, branded retail sales represented 69% of total sales, up from 49% in Q3. In the early stages of the rollout of our first 2.0 product contributed about 12% to the Q4 total dollar sales, up from 4.5% in Q3. Wholesale made up the remaining 31%. Drilling down a little further on the retail branded sales, sequential growth was driven by a 52% increase in large format dried flower, a 30% increase in pre-rolls, and a 179% increase in oil and Cannabis 2.0 products. Small format sales were flat quarter-on-quarter. Our average flower selling price per gram in Q4 was down two percent from Q3, which is solely due to the higher percentage of large format flower sales in Q4 versus Q3. Our Cannabis 2.0 SKUs saw a slight increase on a quarter-on-quarter basis. Reported gross margin in Q4 was 20%. That's our statutory percentage, which includes the impact of the non-cash write-up of flower inventory sold during the Q4 that was on hand on the acquisition date, November second. Just to be clear, US GAAP acquisition accounting requires us to implement what's called purchase price accounting. Essentially, a buyer adjusts the acquired company's assets and liabilities on the acquisition date to the fair value. This resulted in a write-up in the value of our flower inventory on hand on November second to its fair value, which should not come as a big surprise. An easy way of trying to explain it is essentially a greenhouse full of cannabis is worth more than a greenhouse that is empty. The accounting rules require us to recognize that the greenhouse had cannabis in it. As such, we had to value the cannabis that was in the greenhouse on the acquisition date. From a pure accounting perspective, the flower inventory that existed on November 2nd that was sold during the quarter result in a zero statutory gross margin. This is an accounting impact and not reflective of the true cash flows from operations. The offsetting loss on our statutory gross margin on the flower inventory that was written up due to the acquisition is essentially part of the gain on acquisition that we recognized of $23.6 million on the consolidated Village Farms books. Essentially, that $23.6 represents the difference between the fair market value that we paid and the book basis of our investment in Pure Sunfarms on November 1st. Excluding the impact of the flower inventory write-up, the gross margin was a very healthy 39% and compares to our gross margin of 40% in Q3 as pricing was close to flat quarter-on-quarter. This indicates that cost per gram were relatively flat as well. On a go-forward note, there is still some flower inventory that was written up on our books on December 31st that existed on November 2nd, which we expect to sell in Q1, and potentially there may be some trickling into Q2. Our statutory gross margin will be impacted, but we will write that out as we have done for Q4. The 83% gross margin in Q4 of 2019 benefited from the CAD 8.1 million revenue that we recognized in the settlement of the 2019 supply agreement between Emerald and Pure Sunfarms, which had no corresponding cost of sales in 2019. If one removes the settlement revenue and corresponding 100% margin on that revenue from the Pure Sunfarms 2019 Q4 results, the actual gross margin would have been 48% versus the 39% in 2020, which is primarily driven by the lower year-on-year pricing. Turning to SG&A expenses, as Mike noted, it was a somewhat outsized quarter for SG&A, which was up CAD 2.6 million or 79% from the tQ3. Most of the increase was related to strategic growth and expansion initiatives, including fees associated with the EU GMP certification process, which is well underway, the implementation of an ERP system, as other IT consulting with respect to security, and some sales plans which were all necessary as we continue to expand our sales and reach in Pure Sunfarms. We also had planned investment in headcount ahead of the start of the Delta Two later this year, which will be effectively double our cannabis production by late 2021. We also experienced the first and only, which represented roughly 30% of the SG&A, a single bad debt expense from an LP that had filed for bankruptcy. Most of our sales to this LP were paid for, as a result of their financial condition, the final installment was not made. Since inception, this has been our only bad debt we've experienced. We continue to assess the creditworthiness of all our wholesale customers and factor that into our sales terms. Turning to the balance sheet, both Village Farms and Pure Sunfarms continue to be on solid position to support our ongoing business with integral internal growth objectives, as well as positive cash flow from operations of CAD 5.7 million for the year, a nice CAD 20 million improvement from 2019. Our cash balance at year-end was CAD 25.6 million, and both Village Farms and Pure Sunfarms had borrowing capacity on their existing bank loans available to them at year-end. As noted in our news release today, Pure Sunfarms has extended its existing credit agreement with its bank syndicate, which was set to expire in February 2022 to February 2024, and Village Farms is in the process of renewing its ABL facility with BMO, which should be completed by month-end. Subsequent to year-end in January, we completed a registered direct offering with certain institutional investors under which we raised US $135 million through the issuance of approximately 10.9 million common shares at the price of US $12.40. On the financing front last week on March 10, the first day our September 2019 warrants could be exercised, we had three warrant holders, all part of one family fund, exercise their warrants, resulting in the receipt of an additional $10.3 million and the issuance of approximately 1.8 million additional common shares. We have approximately 2.9 million September warrants outstanding with an exercise price of $5.80. We cannot force the exercise of these warrants until March 2022, but expect more will be exercised in the coming weeks and months based on our current share price. The warrants are paper warrants, and they do not trade. In February, we announced we repaid the full CAD 19.9 million or $15.6 million promissory note plus accrued interest. That Village Farms issued to our former JV partner, and that is the final portion of the consideration paid for the acquisition of the remainder of Pure Sunfarms. Moving to the consolidated results for the quarter, net income was $7 million compared to a net loss of $7.2 million in Q4 of last year, primarily driven by the year-on-year improvement in our produce results. As Mike noted earlier, we recognized a $23.6 million gain on acquisition from Pure Sunfarms acquisition under GAAP purchase price accounting, which is partially offset by a $3.89 write-off of a portion of the loan to the hemp, resulting for the write-down of hemp inventory. As mentioned earlier, our net income was impacted by the inflated cost of goods sold due to the write-up of the Pure Sunfarms flower inventory under the purchase price accounting. Adjusted EBITDA Q4 improved to a small loss of $500,000 from a loss of $7.4 million in Q4 of 2019. We are in the strongest financial position we have been in my tenure with the company, and continue to execute and build our market share in adult use cannabis while maintaining our produce business and greenhouse assets as we await developments in the U.S. legalization of cannabis. With that, I'll turn it over to Mike. Well, thank you, Steve. I actually thought being catapulted off an aircraft carrier was exciting, but I never understood purchase accounting under GAAP is right up there. That's awesome. Thank you. All right, moving on. 2020 set a new baseline for Village Farms to build and grow from as we leverage our 30-years-plus experience in the vertically integrated, controlled environment, agriculture business for cannabis opportunities internationally. Our strategy is formed on multiple opportunities for sustainable value creation over the near term, medium term, and long term. In Canada, we have proven out the Pure Sunfarms model. Excellence in cultivation, highly efficient, low-cost operations, a proven product strategy based on high-quality products that customers want at an attractive price, and the ability to deliver consistent profitability. All of which positions Pure Sunfarms for continued growth based on steady overall market growth. Canada's now at an annualized run rate of $3.6 billion. That's more than double where it was at the end of 2019. That's very favorable. Increased access to our products through growth in a number of retail outlets, especially in Ontario. Expansion and enhancement of product offerings and continuous improvement is a fundamental tenet of our product strategy. Our team is heads down continuing to elevate quality and innovate with a particular focus on those attributes most valued by customers. Finally, expansion of our market to capture more of the industry's profitability pool going forward through 2022 and 2023. With this very favorable outlook, as Stephen Ruffini noted, we plan to start growing in half of our second 1.1 million sq ft greenhouse, Delta 3, in the back half of this year to meet our forecasted demand for our products. Our goal is to start up the balance of the second half of Delta Two in early to mid 2022, such that mid, by mid next year, we will have doubled our current production levels. Each successive quarter of achievement of profitability for our Canadian cannabis business gives us great confidence in our ability to capitalize on the U.S. cannabis opportunity. We are very encouraged by the evolution of the regulatory environment in the U.S. We have developed and are refining and adjusting in real time multiple strategies which anticipate legal participation for us in the high-THC market and leverage our deep experience there, our organizational strength, and our large greenhouse existing footprint. As Steve discussed, we have significant strength in our balance sheet to execute. There is little doubt that in the coming years, we will see significant progressive change in the regulatory and the regulations of low and high THC for both medicinal and recreational use in various countries around the world. We continue to be very active in pursuing additional targeted large market opportunities. I can say, looking at the future Village Farms, just personally, not just as the CEO, but the company's founder and still largest shareholder, our people, our capabilities, our opportunities continue to give me great confidence in the ability of our company to deliver growth and a return on invested capital that is second to none in our industry, and that will drive sustainable value creation for our shareholders. Before I open the call to questions, I just wanna highlight for those that may have missed our news release yesterday or Monday that Village Farms will be added to the S&P/TSX Composite Index before the market opened on March 22nd. It's a proud moment for us, and we believe validation of not just how far the cannabis industry has come in a very short period of time, but especially the significant value we at Village Farms have been able to create for our shareholders. I wanna take a moment to thank all members of Village Farms and Pure Sunfarms leadership and team who have contributed to the many accomplishments and successes in 2020. It is unprecedented situation. You all rose to the challenge to ensure our two essential businesses during this pandemic were continuing to deliver to customers and consumers throughout the year, but also continue to move forward the strategies for each business to position them for future growth and success. You each deserve this recognition, and I thank you. With that, Sharon, we'll open up to questions. If you'd like to ask a question at this time, please press star then the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Please note questions will only be taken from analysts. First question comes from Rahul Sarugaser with Raymond James. Morning, Mike and Steve. Thanks so much for taking my call. Morning, Rahul. You know, congratulations on a terrific year, really. Like you said, this quarter's numbers were a little bit muddy, but of course, you know, that's our job to try and sort that out. You know, I'd really like, kinda like to look forward, you know, given that there was a rapid growth in Pure Sunfarms market share, through, you know, through 2020. Now, looking forward into 2021, you know, we've seen that the Q1 more broadly has been, you know, somewhat weak in general. You know, in our channel checks show that, you know, Pure Sunfarms didn't perform that well, you know, relative to its rapid acceleration and so on in 2020. How should we be thinking about Pure Sunfarms market share, growth in 2021, particularly given your goal of 20% market share over time? Good morning, Rahul. I think the 20% market share, you know, we, you know, that is our longer term goal, and I think You know, achieving that market share is just a combination of what we can execute with our products. It's also dependent upon what happens with the competitive landscape. As I said, you know, it seems like profitability is just not that important in a marketplace, especially when many other LPs and companies can continue to access capital regardless of their cost of production and so on. I think, you know, you have to take that into account. When will the music stop, start to slow down? There is a lot of competition out there, and I think that was also, you know, we saw that with the provincial governments trying to get SKU rationalization. I mean, some of the provincial governments had, you know, 6,000, 800 SKUs and 60 different LPs that they were buying from. That's something we don't control. You know, at the end of the day, there's just a limited amount of customers. There's a lot of dynamics playing, and I think overall, you know, we have achieved close to a 20% market share on flower for a given month in Ontario, and that validation, even though it was just one month in the past, says that we can get there. If today, of all product categories in Canada, we're in a three-four percent range, I think looking long term, 20% is possible. As I said earlier, we feel confident on that. You know, as we ramp up Delta three, I don't know of many other LPs ramping up production, but we are. It's really not a question of wholesale sales. I mean, I've heard numbers where 1.2, north of 1.2 billion grams are in inventory at other LPs. If that is low potency, you know, that product's not gonna be sold. As we continue to deliver new SKUs with higher potency, I think that'll drive greater market share. Overall, you know, quarter-on-quarter, it's hard to, like, achieve, you know, continuing to achieve high percentage of quarter, sequential quarterly growth. You know, we just can't be measured that way, and I think, we're excited about starting to look at our results measured by year-on-year, by quarter and by year, as opposed to every single quarter, where there could be a lot of lumpiness in the market and so on. I hope that helps answer the question. Great. Yeah. You are absolutely preaching to the choir when you're talking about appreciating sort of bottom-line EBITDA over revenue. That said, you know, the market continues to really value companies in the space on an EB to revenue basis. Given that Pure Sunfarms, you know, essentially Pure Sunfarms will be consolidating Pure Sunfarms revenue completely starting Q1, you know, how do you anticipate that playing out more broadly for the company, you know, given that you will have sort of fully consolidated revenues? If I can cheaply add one additional question, which is, now that you have $150, you know, a nice, healthy cash balance sheet, you know, what are some of your plans in terms of deploying that cash, given essentially your historical record of being really good, efficient allocators of capital? Yeah. Well, for the first question, I mean, Pure Sunfarms today, you know, we are so pleased with the results of the company. I mean, to us, positive capital and profitability, that's what it's all about. I mean, I just don't understand a company that can operate year on year for years going through $billions of shareholder wealth and never gets to a point of profitability or not even see a path to profitability, let's just say in a Canadian market, based on the fact that the real driver is taking market share from the illicit trade to the legal trade and being competitive in that pricing. Pure Sunfarms, man, they are uncuffed, unleashed, and they are going at it themselves. They have a fantastic management team, great organization. We have enough assets under one footprint if we converted the final greenhouse to do north of 35% of the entire Canadian requirement from a capacity perspective. They're gonna just keep building that market share. Also, they now are going through GMP certification. That was a big cost for us in the fourth quarter, SG&A, north of half a million dollars. They're gearing up for export of products coming out of Canada. From our perspective, they're ready to go. They're fully solo and unleashed, and let them do their thing. For us here, everything we do is a process. It's systematic. Get them positive, help them where we can, let them free. They are, now we've come back to corporate, and we're focused on not just our entry point to the U.S., which is priority, is one of our top priorities. As we're watching everything unfold, and it changes week to week and month to month, and we look at Texas, the way we view Texas, by the way, talking about the balance sheet we have, how we deploy that, you know, we are ready to go in Texas. We have our plan to duplicate exactly and leverage up what we did in Canada by converting the 1st or 2nd of massive greenhouses in Texas. We view Texas as a country. We don't consider it part of the 49 other states because it is the Republic of Texas, population equal to Canada, 2nd-largest populated state. No one has an advantage in Texas today. When, you know, when the race starts, we plan to be very aggressive within that marketplace. That doesn't mean that's the only way we're gonna enter the U.S. market. We have other plans. Equally, we're very focused on EU. We've been working there for a year and a half. Everything we do has to come with very deep research, a process, understanding how we get a return on capital, understanding how we invest our dollars in companies who acquire them will get us cash flow positive. It may not seem like we're moving as aggressive as others, but I can assure you, once we get into it, and that's right on the horizon, that we'll do well. Next question comes from Doug Cooper with Beacon Securities. Hi, good morning, guys. Couple things, Steve, just couple nuts and bolts things I just wanted to confirm. G&A was $5.9. I'm just talking G&A for Pure Sunfarms, $5.9 million in the quarter. You said bad debts was 30% of that, $1.7 million. Is that right? A little bit, a little bit less than that. About a million and a half kind of thing? Yeah. Okay. Mike, I think you just said CGMP certification cost you half a million dollars in the quarter. I guess I'm just trying to get at, what is the sort of baseline G&A going forward in the quarter based on the current headcount? Well, we've approved that they will ramp up their SG&A to get ahead of Delta Two. Remember, Delta Two is doubling our capacity, and they're gonna be doing that through their positive cash flow, by the way. It's gonna be like a reverse bell curve that SG&A is gonna ramp up for the next Q2-Q4 or at least till we start generating revenue from that asset. We need to continue to build our team, our innovation, our product, our products, and ramp the facility up. You know we've been ramping up greenhouses for north of three decades. It's not an easy feat, and we wanna get ahead of it. Once we start delivering revenue from Delta two, I think you'll see that you will see the SG&A as a percent of sales come back down to what we consider normal for us, which is still, you know, within a normal percent of what a CPG company should be operating at. So the- You know, you see that higher over the next Q4. Okay. I'm just trying to Out of that 5.9, call it one time, you got bad debts of a million and a half, C, GMP certification. Well, A half a million bucks, ERP was something in there too, right? Doug, It's 30% of the increase, so it's 30% of $2.69 of bad debt. 30% of 2.6. Okay. Okay. Yeah. You know, just you talk about ERP and all, I mean, to a degree, you know, we didn't start out by putting a multi-million dollar ERP system. We waited till we can be profitable. They've been utilizing the Village Farms ERP system, which didn't handle Health Canada requirements as batch controls and. Right -et cetera, et cetera. We're really excited about it. Now it's time when they can use their cash flow to start upgrading their systems for future growth. I think that's the way You know, they're doing exactly the way we would do it. Just on the Getting back to Rahul's question, market share, you target 20%. By my calculations, you were give or take, you obviously increased market share. I think the Canadian market grew 12% sequentially, and you guys were up 29% sequentially on the retail sales, so obviously gained some share there in the large format, as you indicated. Can you give us a breakdown of your $15.5 million in sales? How much was Ontario, how much was B.C., and how much was Alberta? We don't have that data. I mean, Ontario, we will say Ontario is our biggest customer. BC and Alberta kind of go neck and neck in between depending on months. As Mike said, it's hard to measure this quarter-on-quarter. The ordering patterns for the provincial buyers is, at worst, sporadic. It's not what I would call a normal course buying by what we see in the produce business on replenishment. In some instances, we've run out of SKUs that are good sellers in these province, which is frustrating as obviously, when we're out of stock, it's a lost sale. As Mike said, we're not in control of the buying patterns of the provincial governments. Ontario is by far and away our biggest customer. Okay. Is there an update on the, I guess, entry into other provinces, in particular, I'm thinking Quebec, you know, the next biggest province between Ontario, Quebec, B.C., and Alberta is pretty much the, you know, places you wanna be. Is there an update on Quebec? Well, I mean, honestly, you know, Quebec remains a challenge for us. It's, you know, it's a priority, but it remains a challenge. That's all I can say. At this point, we're looking at many different trying to understand it, and I won't go any deeper than that. It's a large market, and we haven't been able to penetrate that. The good news is we're looking at the Yukon as an expansion this year. No, seriously, yeah, I think, you know, I mean, B.C. is starting to roll out more stores, and God knows that's, you know, per capita, that's the highest consumption. The illicit trade is still pretty big on the West Coast, and I think that's a growth opportunity for us as well. Next question comes from Aaron Grey with Alliance Global Partners. Hey, good morning and thanks for the questions, and nice trends on the adult use side. Quick question from me is gonna be on, you know, some of the habits that you're seeing from the provincial buyers and kind of, you know, how they're looking to kind of maintain their own inventory levels. You know, what you've kind of seen as they kind of, you know, refine the inventory that keeps on shelf and the replenishment? Secondly, you know, given how you're expecting to see, you know, more and more stores open up in Ontario, just was curious as to how you look to align yourself with potentially the new retail stores and kind of making sure you're in the right place in terms of shelf space as these new stores are opening up so that you can kind of maintain, if not gain your market share, you know, throughout the year. Thanks. Well, you know, first of all, let me just say that I really have an incredible amount of respect for the provincial operations and the management teams there. I mean, this is a whole new, brand new industry, and you have to give them so much credit, along with Health Canada, to be able to gear up an industry in such a short amount of time with a product that is very personal in its usage as a CPG product. You know, the fact that there's lumpiness and shortage of supply, I mean, you know, no one should comment on what they're doing and how they're doing it. I think you have to give them the breadth and the year or two, three to get it going because it's a whole new industry. That said, you know, that is the case, and our team is working directly with the buyers there. You know, in today's world up in Canada, all of it is over the phone and Zoom. You don't have that interaction, but I think that will come. One of the reasons without getting too deep into it is we feel very confident ramping up, doubling our capacity with Delta 3. We wouldn't be doing that if we didn't feel that the input from the provincial governments wasn't solid, giving us the confidence to go forward. That's why we're gearing up for production in anticipation that, as I said on the phone, Ontario is gonna triple the amount of stores virtually this year. If you have, you know, you know, a SKU that's been going well, you know, our pricing is tied to the illicit market, and we believe that's, you know, a winning formula. Actually, you know, I think it's proven out to be, so Okay, great. Thanks for that. Then just a quick second question from me. You guys now have a couple quarters with 2.0 sales. You guys are now selling gummies as well. Flower store remains dominant for the market as well with you guys. I'd love to get your take in terms of what are your expectations in terms of, you know, product format mix over the next 12-18 months, you know, for the Canadian market and how you continue to position yourselves. Thanks. Well, you know, there's a lot of competition in the 2.0 market. Like, flower, we weren't first in. It's just been really gearing up at the end of this year. I think the team has done a great job of rolling out a number of derivative products, including gummies. I think they're unmatchable, the product we have. There is competition, and others have been there, and it may not have the swiftness of our flower penetration. We keep refining and honing that, you know, is coming in almost all in-house on being able to make those products all in-house, which will increase our margins going into mid-2021. I mean, to comment what percentage that would be, I think it's too early on. I don't have that data at this point. Next question comes from Andrew Partheniou with Stifel GMP. Hi, thanks for taking my questions. Congrats on the great success in your cannabis business. Maybe just, you know, tying back to a continuation of questions on production and your Delta two expansion. You know, could you give an indication of where you guys are at right now in terms of, you know, your production with Delta three and your sales? You guys mentioned that you are running out of some SKUs at certain points. I mean, are you guys capacity constrained, and this is, you know, one of the reasons why you guys are thinking about expanding or doubling your production with Delta two? Is it really more driven by, you know, guidance from provincial governments and, you know, the expansion on stores that you touched on earlier? Just a little bit more color there would be helpful in light of the. I mean- -overproduction of the market. It's all of the above, Andrew, because, you know, we curtailed going back to summer of 2020, I mean, we took a very conservative approach in 2020 and cut back on our production, and that's the beauty of how we designed our assets. We can go from, you know, 16 major grow rooms down to eight, down to four, down to zero. Ramp it back up very quickly. We're doing 5.5 cycles per year. As you know, you know, ramping up a facility, as I said on the call, is a huge undertaking. I think it's fair to say that many have come to realize just how hard that is. You really have to get ahead of it. We have to project the capacity we're gonna need in 2022 and into 2023. That is a combination of looking at the market dynamics, looking at how historicals, our penetration rate, our market share, looking at the movement from the illicit trade, as I mentioned, to $3.6 billion. That is way up from the end of 2019, so we anticipate there'll be more cannibalization of the illicit trade. The input from the provincial governments, plus our innovation and SKUs we have coming on. You know, we're very focused on some incredible new SKUs coming up. Potency rules at the end of the day. That's what we're shooting for. If you look at our inventories versus our competition, I would venture to say we're at the very low end of inventory levels compared to everybody else, which means it's working. Yeah. We believe coming into the second half of this year, we're gonna need more capacity. Even though we've allocated half the greenhouse now, half in 2022, we can move that forward a month, back a month, once we get the cultivation license out or the expanded cultivation license. That's what we need. Then we have a lot of flexibility how we prepare. At the end of the day, we do not want to not deliver to our customers when they want our products. We have to be ready in taking that approach. Thanks for that additional color. Just touching on, you know, your recent financings, could you give maybe an order of priority on what you're looking at in order for, you know, use of proceeds? You know, you mentioned, you know, the U.S. is a huge focus. Are, are you looking at the CBD or maybe the THC market? You know, any more color there on international expansion or use of proceeds would be useful. Yeah. I'm not gonna give too much color on the U.S. The regulatory climate changes daily. It's very political, you know, state side, federal side. Again, being on Nasdaq, TSX gives us the greatest restrictions of all. Steve has worked very close with the exchanges to what they can, what they're expecting tied to any federal legislation, be it a modification of the STATES Act, the MORE Act and whatnot. Obviously under the cannabis umbrella, there is CBD, there is normal THC, as we say, we just wanna be very clear on the move we make. That again, outside of Texas. Texas goes, we go. Keeping that in mind, we're looking at, you know, probably deploying some capital to international markets where we think we can leverage up all we've accomplished in Canada and our 30 years' experience and be ready for those markets to open up. I think more to come on that. Next question comes from Scott Fortune with Roth Capital Partners. Good morning. Thanks for the questions. Real quick, just kinda wanna get a sense for the wholesale opportunity kinda longer term as you look at it. And then was wholesale affected a little bit by the outdoor grows that came on board in Q4? Just kind of frame this as you look at the wholesale opportunity. Are you in discussions with other LPs looking to offset some of their high cost production to you guys longer term? Just kinda step us through. I know it's gonna be very variable from that standpoint, kind of the strategy. It's hard to comment on that, Scott. Don't really wanna talk about that per se with respect to our customers. Because, you know, if we're selling somebody under a non-branded or wholesale side, they're a customer, and we wanna respect the fact that they are a customer, whether a competitor or not. You know, our decisions go deeper in how we do things. One example I can tell you is, you know, we're focused on the operational side. Gearing up, I think it gets underplayed in the industry as a vertically integrated company. The cultivation side gets sort of underplayed of just how hard that is to ramp up. To the extent that we don't wanna be growing anything we can't sell, that's a mutual benefit for us. You know, we don't control the wholesale market per se. We have some companies that are doing very innovative things that we consider part of our non-branded strategy, and we wanna support those companies as a light asset model, and then you have other LPs. If another LP wants to work with us, we're not opposed to doing that. Scott, it's Stephen. We've seen no competition from outdoor grow. Zero. Haven't had any issues. Okay. I appreciate the color. Can you call out a little bit more on the provinces and the strength? You know, obviously Ontario's come on board with more stores. You see BC a little bit, but as you look in 2021, kind of the provinces that can come on and add to growth for you from that standpoint? Not really. I think, you know, as soon as the lockdown, I think we probably wanna reserve that for when things ease up as far as the pandemic lockdown. I mean Ontario, I've been told, is probably gonna have another tightening up. Although we said in our comments that we're pretty happy with the flow in 2020, it has to be affecting people purchases in store and going out. We don't control that and of course if, approaching the summer, if things open up across Canada, I think that's only gonna improve things. I think you'll see some concern and bumpiness in the first, Q2 for companies in Canada. That certainly attributes to it in our opinion. Next question comes from Eric Des Lauriers with Craig-Hallum Capital. Great. Thanks for taking my questions and congrats on the strong year and strong quarter. Thanks, Eric. At this point, I think your leadership in the Canadian market is undisputed, you know, whether it's cost, brand, market share, profitability. You guys have clear optionality in the U.S. with nearly six million square feet of greenhouses in Texas. Yet, this is probably obvious to everyone on this call, you somewhat inexplicably trade at a steep discount to peers. I'd imagine that at this point, any of your competitors would love to acquire or merge with you, but I also definitely respect that you guys don't want or need to take on anyone else's issues. Can you talk a little bit about the M&A environment in Canada, and your appetite for M&A, whether as an acquirer or a target? Well, I think, you know, that's pretty clear. Thank you for the opening remarks, Eric. That's certainly really appreciated, acknowledging that. Really, if it's you know, in Canada and working with the leadership of Pure Sunfarms, I mean, our appetite would be tied to innovation, IP, things that can really resonate and enhance our brand and our company going forward. To the degree that we get calls every day for production assets, we're not interested. You know, we have built many mega projects in 30 years, we've learned a lot from that. We don't really need to be in multiple provincial areas to produce a large quantity, you know, in one footprint, we have a scale, as I mentioned, that could do 30%, north of 30% of the Canadian capacity for the whole country. Managing one footprint of a high scale is where you wanna be. In fact, you know, probably we'll see that model in other countries in the future without going further. If some production asset comes in a different jurisdiction, different climate, different labor philosophies, proximity to the market, you know, it doesn't necessarily. It's not something we want. To look at any M&A activity on the production side, it's not just resonating for us. As far as brand goes, you know, one could question, is there really a brand yet? I mean, we are branded guys, we believe in brand. I think the Canadian market is really still about market share and cannibalization of the illicit trade. Brands will come. I don't see anyone out there leading that far on a brand that would be attractive to us. I think we'll let Pure Sunfarms loose and they are loose, keep going the way they're going and reserve our capital for M&A activities probably in other countries. Okay, that makes sense. That's great color. I appreciate that. I'm gonna try one more on the U.S. cannabis opportunity. I know that you guys are, you know, don't want to tip your hand here much. As you look beyond Texas, what are your thoughts on M&A versus sort of organic license applications within the U.S.? Are you guys more focused on like as you look at markets beyond Texas, are you focused more on regulatory structure, i.e., sort of limited license versus unlimited? Are you more focused on, you know, geographic locations, sort of building out a regional footprint? Just any additional color there would be helpful. Well, I could tell you this, that our U.S. philosophy is more where it's gonna be, where's the puck gonna be, so to speak, the Wayne Gretzky philosophy of where's it gonna be, and that's where we wanna be. We don't necessarily believe that the current model of whether it's limited state limited license, single state, multi-state, in the end, we don't believe that having, you know, 42 production facilities among 40 states is the way to do it. We believe that upon full federal legalization, that there will be interstate commerce and the model of large scale, low cost will prevail, and you can't stop interstate commerce in the United States regardless of what some governors believe. Yes, it'll be, it'll take time. It'll be a fight. There'll always be pockets like there was alcohol, but ultimately, that's the model. You know, we have to be careful when we look at an entry point on the valuations of these companies because a lot of their investment, we believe, will be sunk costs with no return. That's what we're evaluating, and the valuations are pretty sky high right now, not on CBD, but on normal THC. How's that for color? Last question comes from Adam Buckham with Scotiabank. Morning, Mike and Steve. Thanks for taking my question. There've been some comments in the market about Mexico's progression towards rec cannabis and how that might benefit VFF given its network and partnerships in the country. Are you able to provide any color on that market along with the company's interest in it? I mean Mexico was sort of on our front burner, went to our back burner, and sort of back on the second burner. We have very solid contacts. We've been operating there in almost 30 years, and in working with our contacts, we wanted to sit back and take a back seat. You know, we're never gonna get emotionally caught up that we have to be first in, as opposed to having the right model. We need to see the separation of medicinal versus recreational. I'm not sure we wanna be opening up a store in Acapulco, the medicinal side is interesting. There are some companies that are interesting to us that may make their way in there that can utilize support and help. It's sort of back on a secondary burner, but we're taking our time. Okay, great. That's great color. My second question is just more for modeling purposes. I just wanted to touch on the produce business. I think Steve alluded to a few issues that impacted margins in the quarter. We're now almost at the end of Q1. Are there headwinds still there from a margin perspective? Maybe at a high level, can you walk us through how some of your partner growers are providing a benefit to margins for the business? Yeah, I mean, look, you know, we In my tenure, which is pretty long, I Up till this brown rugose virus that has become a global pandemic and is so Well, it's not funny, but when we had the coronavirus, we shook our heads in here and said, "You know, every day we're battling a tomato virus that really started out in Jordan and Israel some 5 years ago," and it's all over the world today, and everybody's suffering from it within the tomato industry. You know, we're battling that, but there's no cure for it, and the seed companies are working, you know, aggressively to build in resistance, and they will get there. In the meantime, that's been an impact, and probably the greatest impact for us and the most uncontrollable is dealing with that specific virus, more so than the market conditions. Our pricing will get affected if one of our facilities is growing high-value specialty products and they have a hit, and more of our commodity products are surviving, then, you know, it drags down our average pricing. It's something we're battling. In our partners in Mexico and Canada, God, the virus is everywhere as well. We have issues with the border, as far as importation. There's a lot going on, a lot of noise there, but it'll work it out. I've seen it before. Yeah, our partners provide us with consistent margins, because for the most part, the cost of production for high-value produce crops in Mexico and in Canada are lower than the United States. The way things are going in the United States, it's only gonna get more costlier, and that is a concern. I think our model of shifting certain U.S. assets to cannabis in the future, you know, is a good opportunity for us and work closer with our partners in other countries. At this time, we will turn the call over to the presenters. Thank you again. It's the end of a great year, 2020. We think it's a great year. We've made a lot of progress. We're excited that we've proven out our original model in Canada and hope to leverage that up in other places. We certainly thank all of our shareholders, our institutional shareholders, all of our villagers. Thank you all, and look forward to reporting first quarter in May. Thank you. This concludes today's conference call. You may now disconnect.