Canadian cannabis unit of Village Farms reports another profit

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The Canadian cannabis arm of produce grower Village Farms International reported revenue and profit ahead of expectations for the three months ended Dec. 31, 2021, according to the company’s latest financial results.

Adjusted EBITDA, a measure of profitability, was 6.1 million Canadian dollars ($5 million), marking the 13th straight quarter of positive adjusted EBITDA, the company reported.

Net income was CA$4.4 million.

Net cannabis sales in Canada were CA$33.8 million in the October-December period, down slightly compared with the previous quarter’s CA$34.5 million but substantially higher than last year’s CA$22.6 million.

In 2021, Canadian cannabis net sales were CA$120.8 million, up from CA$76.1 million in 2020.

Village Farms said its cannabis subsidiary, Pure Sunfarms, was the top-selling dried flower brand in Alberta, British Columbia and Ontario – three of the four largest markets in Canada.

Village Farms recently bought a 70% stake in Quebec-based Rose LifeScience.

Rose LifeScience contributed roughly CA$1.9 million in net sales for the first partial quarter, from Nov. 15, 2021 to Dec. 31, 2021.

In the United States, Village Farms’ cannabis net sales for the three months were $7.5 million via its cannabis-related subsidiaries Balanced Health Botanicals and VF Hemp.

Village Farms’ adjusted EBITDA for the fourth quarter was $1.9 million.

The company’s overall net sales, including cannabis, vegetables and other units, was $72.8 million in Q4, exceeding analysts’ expectations.

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In a note to investors, Bank of Montreal analyst Tamy Chen described the results as “positive.”

“We gained more confidence on the key drivers of topline growth in 2022,” Chen wrote.

Companywide net income was $2.1 million and adjusted EBITDA was $5.3 million.

For Canadian cannabis sales in the latest quarter:

  • 65% of revenue was from Village’s own branded flower and pre-rolls.
  • 11% from cannabis derivative products.

The remainder, 24%, represented nonbranded sales.

Village said the increase in nonbranded sales “was largely attributable to the certain opportunistic transactions” available to the company in the quarter.

Shares of Village Farms International are traded as VFF on the Nasdaq.