Village Farms International, Inc. brought in USD$40.7 million in cannabis sales in Canada in the second quarter of 2024, $10.7 million in gross profit, and $1.4 million in net income (reported in US dollars).
While cannabis sales in Canada increased by $12.7 million compared to the same quarter in 2023 ($28.1 million), gross profits on those sales actually declined slightly from $10,716,000 to $10,705,000. Branded sales in the Canadian cannabis market were $50.4 million, while non-branded sales were $8.3 million.
The company attributes the increase in cannabis sales in the Canadian market primarily to a 32% increase in net branded sales and an 182% increase in non-branded sales. The latter increase is attributed to “improved supply conditions and pricing created by the shift of many producers to asset-light models, including sales of non-brand-spec inventory.”
The company reports incurring excise duties on its Canadian cannabis sales of $20 million (CAN$27 million) for the three months ended June 30, 2024, or 39% of gross branded sales. Village Farms says the Canadian excise duty is the single largest cost of participating in the branded adult-use market in Canada.
Pure Sunfarms was one of three Canadian cannabis companies named by the Israeli Commissioner for Trade Levies at the Ministry of Economy and Industry in an investigation into “product dumping” of Canadian cannabis into the Israeli market. The preliminary report proposes a 74% levy on imports from Pure Sunfarms.
Village Farms International operates two cannabis facilities for the Canadian legal adult use (recreational) market and for export to international markets like Israel, Germany, Australia, and the United Kingdom. The company’s Canadian Cannabis segment is made up of Pure Sunfarms in BC and an 80% ownership in Rose LifeScience in Quebec.
International sales increased by 9% in Q2 2023, primarily due to higher sales to Germany and the UK. These were partially offset by lower sales to the Australian cannabis market.
The company also holds 85% ownership of LeliHolland, which has one of ten licenses to cultivate cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program. Located in Drachten, the facility is targeted to begin production in the fourth quarter of 2024.
In the US, Village Farms owns Balanced Health, which focuses on consumer CBD products. It had $4.3 million in sales and $12.3 million in losses.
The company also sells produce and energy through its renewable natural gas project.
Village Farms posted sales of $92.2 million in the three months ended June 30, 2024, and a loss, including non-controlling interests, of $23.6 million.
Featured image via Twitter
