Pure Sunfarms sees steady growth in Canadian cannabis sales, profit

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Licensed cannabis producer Pure Sunfarms reported a growing profit for its July-September quarter on the back of organic sales growth in its key markets of Ontario, Alberta and British Columbia.

British Columbia-based Pure Sunfarms, a subsidiary of Village Farms International, booked net sales of 34.5 million Canadian dollars ($27.4 million) for the third quarter ended Sept. 30, up 12% over its second-quarter sales of CA$30.4 million.

Adjusted EBITDA, a measure of profitability, rose to CA$10.9 million, while net income was CA$6.7 million, 40% higher than the April-June quarter, the company announced Tuesday in a news release.

It was the 12th consecutive quarter of positive-adjusted EBITDA.

The quarterly results were in line with analyst expectations.

Pure Sunfarms has not experienced a loss of market share so far this year, unlike large-scale competitors Aurora Cannabis, Canopy Growth and Tilray.

Pure Sunfarms started the year with about 7% of Canada’s adult-use cannabis market outside Quebec, per digital retail platform Hifyre. As of the end of October, that stood at approximately 9%.

Pure Sunfarms is expanding cultivation while competitors are cutting back.

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In the quarter, Pure Sunfarms initiated cultivation in the completed half of a second 1.1 million-square-foot greenhouse in Delta, British Columbia.

The net revenue increase from the second quarter to the third consisted of a 1% increase in Pure Sunfarms-branded sales and a 48% rise in nonbranded sales.

For the quarter ended Sept. 30, almost 60% of revenue came from Pure Sunfarms-branded flower and pre-rolls, and 7% was from branded oils, edibles and vapes, according to the release.

In the United States, Village Farms International’s cannabis segment consists of Balanced Health, which it acquired in August for $75 million.

U.S. hemp sales were roughly $7,000.

From Aug. 16 through Sept. 30, U.S. cannabis net sales were $3.8 million.

U.S. cannabis adjusted EBITDA was $672,000, while net income was $300,000.

Including its vegetable division, Village Farms reported sales of $72.4 million in the quarter, up from the previous quarter’s $70.4 million.

Adjusted EBITDA was $6.7 million in July-September, up from $1.6 million in April-June.

Shares of Village Farms International are traded as VFF on the Nasdaq and Toronto Stock Exchange, respectively.