Success with cannabis sales in Canada and abroad has prompted Village Farms International Inc (NASDAQ: VFF) (FRA: 02V) to push its fruit and veggies business to the side.
Village Farms just revealed that its previously announced private produce joint venture spinout was successfully established on May 30. Together with a group of investment firms, the public marijuana operator will maintain a minority stake of 37.9 per cent in the new tomato and cucumber company Vanguard Food LP.
“Today marks the beginning of an exciting new chapter for Village Farms,” chief executive, Michael DeGiglio, stated in a news release on Monday.
“For the past eight years we have carefully built our cannabis business based upon our learnings from over 35 years in controlled environment agriculture, and now we are ready to move forward independently from produce.”
The news follows Village Farms reporting significant success from cannabinoid merchandise in its Q1 results.
Global medical cannabis sales shot up by 285 per cent year-over-year to C$7.7 million. This spike was driven by increasing product volume shipped to the United Kingdom, Germany and Australia.
In another milestone, Village Farms started distributing goods to patients in New Zealand and commenced adult-use sales in Europe for the first time throughout the Netherlands. The public cannabis operator expects to triple international sales this year.
Furthermore, Canadian cannabis sales drove the highest amount of EBITDA that Village Farms had observed during a quarter in over three years. It shot up by 75 per cent year-over-year to C$9.6 million. Additionally, net income from domestic marijuana distribution rose by 258 per cent in comparison to the first quarter of 2024 at C$4.3 million.
Pure Sunfarms cannabis flower, produced at one of the world’s largest cultivation facilities in British Columbia, is currently the eighth most popular variety in BC, fifth in Alberta and fourth in Ontario — according to Headset data.
Read more: Burnaby will soon get its first pair of private dispensaries
ATB has bullish outlook for the cultivator
On Friday, ATB Capital Markets analyst Frederico Gomes said that Village Farms was a very promising investment prospect.
“We really like Village Farms,” Gomes said in an interview with BNN Bloomberg. “Large-scale, low-cost cultivation capabilities here in Canada but also seeing strong growth internationally.”
He described the produce privatization deal as “transformational” and said his bank liked the stock momentum it had been seeing with $VFF.
Read more: Village Farms scoops remaining 15% stake in Netherlands grower Leli Holland
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