Village Farms International VFF continued to expand its cannabis operations in the third quarter of 2025, driven by stronger performance in Canada and a sharp increase in international medical cannabis exports. During the quarter, the cannabis segment remained a key contributor to consolidated operating results.
Canadian cannabis net sales increased 29% year over year to $46.6 million. The growth reflected improved execution across targeted sales channels and a continued shift toward higher-margin product offerings. Management stated that portfolio rationalization efforts are progressing, with reduced exposure to lower-value products and greater emphasis on differentiated formats and brands. These actions, along with operational improvements, contributed to a cannabis gross margin of 56% in the quarter compared with 26% in the prior-year period.
International medical cannabis exports also increased significantly. Export sales rose 758% year over year, led primarily by shipments to Germany, with additional sales to other international markets. Management highlighted that international medical cannabis carries a higher-margin profile compared with domestic sales.
The Netherlands cannabis business added further scale during the quarter. The Phase I cultivation facility in Drachten operated at full capacity, generating $3.6 million in net sales and $1.3 million in adjusted EBITDA. Products from the facility were available in 91% of participating coffeeshops under the regulated program.
Village Farms is continuing to invest in capacity to support further growth. In Canada, the company has a 40-metric-ton expansion underway. In the Netherlands, construction of the Phase II facility remains on track, with the site expected to be operational in the first quarter of 2026 and increase the total annual production capacity to approximately 10,000 kilograms.
Village Farms, which competes with The Scotts Miracle-Gro Company SMG and Mission Produce, Inc. AVO, has seen its shares soar 338.8% in the past year against the industry’s decline of 13.8%. Shares of Scotts Miracle-Gro have declined 9.2%, while Mission Produce tumbled 6.6% in the aforementioned period.
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From a valuation standpoint, Village Farms’ forward 12-month price-to-sales ratio stands at 1.62, lower than the industry’s 2.03. VFF carries a Value Score of C. Village Farms is trading at a premium to Scotts Miracle-Gro (with a forward 12-month P/S ratio of 1.03) as well as Mission Produce (0.66).
