Village Farms shifts focus to cannabis with fresh produce divestiture

VANCOUVER, British Columbia - Village Farms International, Inc. (NASDAQ: VFF), currently trading at $1.19 per share with a market capitalization of $134 million, has completed the sale of the majority of its fresh produce business as of Monday, May 30, 2025. This strategic move pivots the company towards becoming a global cannabis company, leveraging its 160 acres of advanced greenhouse facilities and international market presence. According to InvestingPro analysis, the stock has shown strong momentum with a 51% return over the past six months.

Michael A. DeGiglio, CEO of Village Farms, expressed enthusiasm about the transition, stating that the company is building on its 35 years of experience in controlled environment agriculture to focus on cannabis. He highlighted the team’s capabilities and the company’s readiness to grow as a leading cannabis operator. The company maintains a healthy financial position with a current ratio of 1.92, indicating sufficient liquidity to meet short-term obligations.

The company plans to release unaudited pro forma condensed consolidated financial statements within four business days to illustrate the transaction’s impact on its financials for the three-month period ending March 31, 2025, as well as for the fiscal years 2024 and 2023. InvestingPro data reveals the company generated revenue of $335.18 million in the last twelve months, though operating with a modest gross profit margin of 12.9%.

Village Farms’ history as a major fresh produce supplier has set the stage for its venture into the high-growth cannabinoid market. Its Canadian subsidiary, Pure Sunfarms, is noted as one of the world’s largest cannabis operations, with significant greenhouse production and a reputation as a low-cost producer. The company also holds a substantial equity stake in Vanguard Food LP and has a partnership with Terreva Renewables for renewable natural gas production, contributing to significant CO2 emission reductions in Vancouver.

Internationally, Village Farms exports medical cannabis from its Canadian facility to several countries and has plans to expand its customer base and invest in international production assets. In Europe, its subsidiary Leli Holland is one of the few licensed to grow and distribute recreational cannabis in the Dutch market. The company is also positioning itself to enter the U.S. THC market, subject to regulatory compliance.

This strategic shift is based on a press release statement, which outlines Village Farms’ transition from its legacy produce business to focusing on the burgeoning cannabis industry, both domestically and internationally. The company’s future financial disclosures will provide further details on the impact of this transition. For comprehensive analysis of Village Farms’ strategic positioning and detailed financial metrics, investors can access the full InvestingPro Research Report, which includes expert insights and advanced valuation models.

In other recent news, Village Farms International reported its fourth-quarter earnings for 2024, revealing an 11% increase in total revenues to $83 million compared to the previous year. Despite this growth, the company posted a net loss of $0.08 per share, which missed the forecasted EPS of -$0.02. Additionally, Village Farms has entered a new strategic partnership by signing a Framework Agreement with Vanguard Food GP LLC and other entities, involving a $55 million investment from Kennedy Lewis Capital Partners and Sweat Equities. This agreement will provide Village Farms with $40 million and a 37.9% equity ownership in Vanguard Food LP.

In financial restructuring efforts, Village Farms successfully refinanced its Canadian Cannabis Term Loans, consolidating three loans into a single credit facility with a lower interest rate and extended maturity date. The company also renegotiated its credit agreement with Farm Credit Canada, introducing improved financial covenants to enhance flexibility in pursuing strategic goals. Moreover, Village Farms has been granted a 180-day extension by Nasdaq to meet the minimum bid price requirement, giving the company until October 13, 2025, to comply.

These developments come amid challenges in the cannabis industry, with Village Farms focusing on expanding its international medicinal export sales and leveraging its existing market position. The company aims to triple its international medicinal export sales in 2025 and anticipates approximately $2 million in net income from its Clean Energy segment.

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