Investment in Joint Ventures (Tables)

6 Months Ended

Jun. 30, 2020

Summarized Equity Earnings (Losses) from Unconsolidated Entities

The Company’s share of the joint venture consists of the following:


Balance, January 1, 2019	$	6,341
Investments in joint venture		18,717
Share of net income for the year		16,276

Balance, December 31, 2019	$	41,334


Balance, January 1, 2020	$	41,334
Investments in joint venture		16,393
Share of net income for the period		3,994

Balance, June 30, 2020	$	61,721

Summarized financial information of Pure Sunfarms:


	June 30, 2020			December 31, 2019
Current assets
Cash and cash equivalents	$	6,472		$	7,356
Trade receivables		10,934			8,687
Inventory		36,000			21,745
Other current assets		5,950			6,964
Non-current assets		112,167			108,652
Current liabilities
Trade payables		(10,291	)		(4,938	)
Borrowings due to joint ventures		(10,703	)		(26,413	)
Income taxes payable		—			(8,489	)
Borrowings – current		(1,798	)		(1,423	)
Other current liabilities		(8,765	)		(5,021	)
Non-current liabilities
Borrowings – long term		(20,431	)		(13,089	)
Deferred tax liabilities		(13,068	)		(2,473	)

Net assets	$	106,467		$	91,558


Reconciliation of net assets:
Accumulated retained earnings	$	33,635		$	26,679
Contributions from joint venture partners		75,738			63,481
Currency translation adjustment		(2,906	)		1,398

Net assets	$	106,467			91,558


	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Revenue	$	9,386		$	24,244		$	22,523		$	35,045
Cost of sales*		(6,266	)		(3,956	)		(12,524	)		(7,774	)

Gross Margin		3,120			20,288			9,999			27,271
Selling, general and administrative expenses		(1,850	)		(1,786	)		(4,284	)		(2,785	)

Income from operations		1,270			18,502			5,715			24,486
Interest expense		(131	)		(293	)		(348	)		(293	)
Foreign exchange (loss) gain		28			(25	)		(151	)		14
Other income, net**		1			4			4,333			13

Income before taxes		1,168			18,188			9,549			24,220
Provision for income taxes		(379	)		(5,169	)		(2,595	)		(6,798	)

Net Income	$	789		$	13,019		$	6,954		$	17,422

*	Included in cost of sales for the three months ended June 30, 2020 and 2019 is $563 and $387, and six months ended June 30, 2020 and 2019 is $1,012 and $845 respectively, of depreciation expense.

**	Includes gain recognized on settlement of net liabilities of $4,348.

The Company’s share of the joint venture consists of the following:


Balance, beginning of the period	$	—
Investments in joint venture		7
Share of net loss		(2,464	)
Losses applied against joint venture note receivable		2,457

Balance, December 31, 2019	$	—


Balance, beginning of the period	$	—
Investments in joint venture		—
Share of net loss		(415	)
Losses applied against joint venture note receivable		415

Balance, June 30, 2020	$	—

Summarized financial information of VF Hemp:


	June 30, 2020			December 31, 2019
Current assets
Inventory	$	9,268		$	9,308
Other current assets		314			546
Non-current assets		1,336			1,476
Current liabilities		(1,642	)		(1,788	)
Non-current liabilities		(13,697	)		(13,323	)

Net assets	$	(4,421	)	$	(3,781	)


Reconciliation of net assets:
Accumulated retained earnings	$	(3,791	)	$	(3,791	)
Net loss for the six months ended June 30, 2020		(640	)		—
Contributions from joint venture partners		10			10

Net assets	$	(4,421	)	$	(3,781	)