Village Farms International, Inc. (NASDAQ:VFF) (TSX:VFF) has been one of the hottest stocks on the markets this year, rising more than 300 per cent since January, and the Canadian licensed producer has been expanding its production capacity for cannabis and hemp in a big way.
The B.C.-based company previously only grew tomatoes and other produce, but has made its mark in the cannabis space with expanding cultivation operations this year. Back in April, investors learned that the company’s joint venture, Pure Sunfarms, was going to be adding 1.1 million square feet of growing space after exercising an option with its Delta 2 greenhouse facility. The move would double the production at Sunfarms up to as much as 150,000 kg of cannabis annually.
However, Village Farms recently announced it was entering another joint venture, this time for outdoor cultivation of hemp in Colorado. The company is going to be working with Arkansas Valley Hemp, LLC and the joint venture will be known as Arkansas Valley Green and Gold. Initial production is expected to be on 120 acres in 2019, with a possibility of that reaching 500 acres by next year.
This new joint venture is an outstanding opportunity to expand Village Farms’ outdoor hemp cultivation and CBD extraction program in partnership with an experienced, large-scale outdoor grower in one of the best growing regions for hemp in one of the most advanced hemp industries of any state in the country.
– Michael DeGiglio, CEO of Village Farms
Village Farms expands existing capacity, footprint in hemp market
On top of the Colorado expansion, Village Farms has secured more than 800 acres of space in Virginia and North and South Carolina. It has already begun planting in those states and expects to begin harvesting by July this year. By mid-June, the company expects to have started planting on all of its acreage.
Village Farms is aggressively pursuing the hemp market as its CEO sees a lot of potential there:
“Village Farms is uniquely positioned for the significant opportunity in hemp-derived CBD. We are moving quickly to scale outdoor cultivation to complement our existing, state-of-the-art greenhouse operations in Texas and further strengthen the foundation for our national, vertically integrated, consumer packaged strategy for hemp-derived CBD.”
Why Village Farms may be a cannabis standout
With 30 years of growing experience and being vertically integrated, Village Farms has a big advantage over cannabis companies in their infancy. It has plenty of expertise under its belt and its existing business could help fund growth in the cannabis industry. Although Village Farms has generated relatively consistent results over the years, by entering cannabis its potential enters new possibilities.
Despite all the growth the Delta, B.C.-based company’s share price has seen this year, it still has a market cap of less than $900 million, well shy of the bigger players in the industry. However, once Village Farms starts harvesting and generating hemp sales, it could get be due for a large increase. It wouldn’t be surprising if one of the larger cannabis producers started looking at Village Farms as a possible acquisition target.