	Three months ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Pure Sunfarms	$	1,443		$	3,748		$	5,437		$	14,493
VF Hemp		(137	)		(211	)		(552	)		(343	)
AVGG Hemp		—			(18	)		—			(35	)
Total	$	1,306		$	3,519		$	4,885		$	14,115

On June 6, 2017, the Company entered into an agreement to form Pure Sunfarms, a B.C. corporation, with Emerald Health Therapeutics Inc. (“Emerald”). The purpose of Pure Sunfarms is to produce, market and distribute cannabis in Canada and internationally.

The Company accounts for its investment in Pure Sunfarms, in accordance with ASC 323, Equity Method and Joint Ventures (“ASC 323”), using the equity method. The Company has determined that Pure Sunfarms is a variable interest entity (“VIE”), however the Company does not consolidate Pure Sunfarms because the Company is not the primary beneficiary. Although the Company is able to exercise significant influence over the operating and financial policies of Pure Sunfarms through its 58.7% majority interest, the Company shares joint control of the Board of Directors and therefore is not the primary beneficiary. The Company’s maximum exposure to loss as a result of its involvement with Pure Sunfarms as of September 30, 2020 relates primarily to the Company’s investment of $63,164 and the recovery of the outstanding loan to Pure Sunfarms of $10,954.

The Company is required to apply the hypothetical liquidation at book value (“HLBV”) method to determine its allocation of the profits and losses in Pure Sunfarms. When determining its allocation of profits and losses, the HLBV method only considers shares that have been fully paid for. Therefore, due to the monthly escrow payments made by Emerald in 2019 in accordance with the Delta 2 Option and Escrow Agreements, the ownership changed each month in 2019 as escrow payment(s) were made.

Under the hypothetical liquidation method, the Company received 58.7% and 56.1% of Pure Sunfarms’ earnings for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 and 2019, the Company received 57.8% and 60.1% of Pure Sunfarms’ earnings, respectively.

On March 31, 2019, Pure Sunfarms exercised its option to utilize the Delta 2 assets and operations. The contribution of the assets has been accounted for as a disposal of the land, greenhouse facility and other assets in exchange for 25,000,000 common shares of Pure Sunfarms. This was a non-cash transaction, and it was estimated that the fair value of the land, building and other assets was $18.7 million (CA$25.0 million) at the date of contribution. The Company recognized a gain of $13.6 million on the contribution of the fixed assets.

On March 2, 2020, pursuant to the settlement agreement with Emerald (the “Settlement Agreement”), Emerald transferred to the Company 2.5% of additional equity in Pure Sunfarms. The Company determined the fair value of the equity received from Emerald to be $4.7 million (CA$6.5 million). The Company recorded this amount as a gain on settlement agreement in the Condensed Consolidated Interim Statement of Income (Loss) and Comprehensive Income (Loss) for the nine months ended September 30, 2020.

As of September 30, 2020, and December 31, 2019, the total investment in Pure Sunfarms of $63.2 million and $41.3 million, respectively, was recorded in the consolidated statements of financial position.

	September 30, 2020			December 31, 2019
Current assets
Cash and cash equivalents	$	6,751		$	7,356
Trade receivables		13,543			8,687
Inventory		33,676			21,745
Other current assets		5,759			6,964
Non-current assets		115,720			108,652
Current liabilities
Trade payables		(3,422	)		(4,938	)
Borrowings due to joint ventures		(11,022	)		(26,413	)
Income taxes payable		—			(8,489	)
Borrowings – current		(2,291	)		(1,423	)
Other current liabilities		(10,156	)		(5,021	)
Non-current liabilities
Borrowings – long term		(23,709	)		(13,089	)
Deferred tax liabilities		(13,742	)		(2,473	)
Net assets	$	111,107		$	91,558
Reconciliation of net assets:
Accumulated retained earnings	$	36,091		$	26,679
Contributions from joint venture partners		75,738			63,481
Currency translation adjustment		(722	)		1,398
Net assets	$	111,107			91,558

	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Sales	$	17,048		$	18,084		$	39,571		$	53,128
Cost of sales*		(11,154	)		(5,689	)		(23,678	)		(13,463	)
Gross Margin		5,894			12,395			15,893			39,665
Selling, general and administrative expenses		(2,447	)		(2,830	)		(6,731	)		(5,616	)
Income from operations		3,447			9,565			9,162			34,049
Interest expense		(386	)		(302	)		(734	)		(596	)
Foreign exchange (loss) gain		(56	)		14			(207	)		28
Other income, net**		(131	)		8			4,202			22
Income before taxes		2,874			9,285			12,423			33,503
Provision for income taxes		(417	)		(2,600	)		(3,012	)		(9,397	)
Net Income	$	2,457		$	6,685		$	9,411		$	24,106

Included in cost of sales for the three months ended September 30, 2020 and 2019 is $961 and $503, and nine months ended September 30, 2020 and 2019 is $1,973 and $1,347 respectively, of depreciation expense.

Nine months ended September 30, 2020, includes a gain recognized on the settlement of net liabilities of $4,348.

On February 27, 2019, the Company entered into a joint venture with Nature Crisp, LLC (“Nature Crisp”) to form VF Hemp for the objective of outdoor cultivation of high percentage cannabidiol (“CBD”) hemp and CBD extraction in multiple states throughout the United States. VF Hemp is 65% owned by the Company and 35% owned by Nature Crisp. Under the terms of the VF Hemp Joint Venture Agreement, the Company will lend up to approximately $15 million to VF Hemp for start-up costs and working capital.

The Company accounts for its investment in VF Hemp, in accordance with ASC 323, using the equity method because the Company is able to exercise significant influence over the operating and financial policies of VF Hemp through its 65% ownership interest and joint power arrangement with Nature Crisp. The Company’s maximum exposure to loss as a result of its involvement with VF Hemp is directly related to the recovery of the $10,713 loan outstanding to VF Hemp.

	September 30, 2020			December 31, 2019
Current assets
Inventory	$	9,268		$	9,308
Other current assets		242			546
Non-current assets		989			1,476
Current liabilities		(1,433	)		(1,788	)
Non-current liabilities		(13,697	)		(13,323	)
Net assets	$	(4,631	)	$	(3,781	)
Reconciliation of net assets:
Accumulated retained earnings	$	(3,791	)	$	(3,791	)
Net loss for the nine months ended September 30, 2020		(850	)		—
Contributions from joint venture partners		10			10
Net assets	$	(4,631	)	$	(3,781	)

In July 2020, the Company invested $226, for an approximately 16% minority interest ownership in DutchCanGrow Inc. (“DCG”), a Netherlands-based cannabis enterprise. DCG is pursuing the opportunity to become one of a limited number of licensed cannabis growers (up to a maximum of 10) when the Dutch government permits the first legal recreational cannabis market in Europe under its 10-city Experiment to Investigate Closed Cannabis Supply Chains.

In August 2020, the Company invested $1,000 for a 6.6% minority interest ownership in Australia-based Altum International Pty Ltd (“Altum”), with an option to increase its ownership in Altum on similar terms. Altum is a cannabinoid platform with a focus on the distribution and marketing of CBD products in the Asia-Pacific region.