The Securities Commission has granted Village Farms International, Inc. (the Filer) an exemption from certain Canadian proxy delivery requirements, allowing the Filer to distribute proxy-related materials to both registered and beneficial securityholders using methods permitted under U.S. federal securities law, specifically Rule 14a-16 of the Securities Exchange Act of 1934.
The Filer, a corporation operating agricultural greenhouse facilities and producing cannabis and CBD products, is listed on the Nasdaq and is subject to U.S. securities laws. Although the Filer is a reporting issuer in Canada, it does not qualify as a foreign private issuer under U.S. law and thus must comply with U.S. domestic proxy rules.
Canadian regulations, namely National Instrument 51-102 (Continuous Disclosure Obligations) and National Instrument 54-101 (Communication with Beneficial Owners of Securities of a Reporting Issuer), typically require delivery of proxy materials directly to securityholders. However, the Filer could not rely on automatic exemptions due to more than 50% of its consolidated assets being located in Canada and its business being principally administered in Canada.
Despite this, the Filer demonstrated that a significant portion of its voting securities are held by non-Canadian residents, the majority of its executive officers are U.S. residents, and its shares are traded exclusively on the Nasdaq.
The granted relief allows the Filer to notify securityholders of the availability of proxy materials online at least 40 days before shareholder meetings and provide instructions for requesting paper or email copies at no charge. This decision is contingent on the Filer meeting all other requirements of the automatic exemptions, except for the location of assets and principal administration.
The British Columbia Securities Commission is the principal regulator for this application, and the decision also applies to Ontario and is intended to be relied upon in other Canadian jurisdictions under Multilateral Instrument 11-102 Passport System.