Village Farms cannabis sales increase in Q1 2024, even as exports decline

| Sarah Clark

Village Farms Inc, the parent company of Pure Sunfarms, sold more than $50 million worth of cannabis in the first three months of 2024, with an adjusted EBITDA of nearly $5.6 million after expenses.

This represents a 49% year-over-year increase compared to the $34.5 million in sales in the first three months of 2023, which the company says was primarily due to higher sales of its large format flower, pre-rolls, and milled products (77% of net sales). All figures are in Canadian dollars.

These sales figures come from Village Farm’s 100% controlling interest in Pure Sunfarms and a 70% interest in Rose LifeScience, which Village Farms says has a “substantial presence in the Province of Quebec as a cannabis supplier, producer and commercialization expert.”

Village Farms also has an 85% interest in Leli Holland B.V., which has received approval to build a cannabis greenhouse in the Netherlands. Village Farms says it expects production to begin later this year. 

“The Canadian excise duty is our single largest cost of participating in the adult-use (branded) market in Canada.”

Village Farms quarterly report

The net income from its Canadian cannabis operations for the three months ending March 31, 2024, was $1.15 million, compared with a net loss of $144,000 for the three months ending March 31, 2023. 

Village Farms’ sales of cannabis into the international market shrank by 11%, primarily due to a decrease in shipments to Australia. International sales were just 4% of net cannabis sales in this most recent quarterly report. 

Village Farms holds EU GMP certification from the District Government of Dusseldorf and began shipping its Canadian cannabis cultivars to Germany in the second quarter of 2023.

“The Canadian excise duty is our single largest cost of participating in the adult-use (branded) market in Canada,” says the newest quarterly report. 

For the three months ended March 31, 2024, the Company incurred excise duties of $20.5 million compared to $18.6 million for the same reporting period in 2023. The company attributes this to an increase in kilograms sold in the provincial (branded) channel in the first quarter of 2024 compared to the first quarter of 2023. 

“The first quarter was an especially strong start to 2024,” said Michael DeGiglio, President and Chief Executive Officer of Village Farms International. “Canadian cannabis retail branded sales grew 28% year-over-year, all organically, as we led the top five LPs in market share growth, further narrowing the gap to number one, and achieving a new record in April. Our success in quality, innovation and brand building, together with the support of our provincial boards and retail partners, are driving these results as we delight our consumers.”

Village Farms also operates in the US cannabis market through its wholly owned subsidiary, Balanced Health, which develops and sells CBD-based products, including ingestible, edible, and topical applications.

Village Farms also operates several non-cannabis endeavours, including the marketing and distribution of tomatoes, peppers, and cucumbers in the US and Canada, as well as renewable energy. 

According to the cannabis industry data platform HiFyre, Pure Sunfarms is the fastest-growing producer among the top five cannabis producers in Canada.