Pure Sunfarms, the cannabis unit of U.S. and Canadian produce company Village Farms International, reported a net income of 2.5 million dollars ($1.8 million) for its second quarter.
British Columbia-based Pure Sunfarms, citing Hifyre data, said it held on to the No. 1 market share spot for dried cannabis flower in Canada during the quarter ended June 30.
“We are more confident than ever that our Canadian cannabis business is positioned to be one of what we continue to believe will be just a handful of winners,” Village Farms CEO Michael DeGiglio said during a Tuesday morning earnings call.
“And as we get it right and win in Canada, we have great confidence that we can get it right and win in other international markets.”
Total gross Canadian cannabis sales were CA$53.8 million, with total net sales of CA$38 million.
The Canadian cannabis segment’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a financial performance measure commonly used in the cannabis industry, was CA$3.3 million, down 63% from the same quarter last year.
Village Farms Chief Financial Officer Stephen Ruffini attributed the adjusted EBITDA decline to spending on Pure Sunfarms’ new value brand and on international cannabis exports plus the acquisition of Quebec cannabis producer and distributor Rose LifeScience.
Ruffini said he expects the figure to improve.
Net sales of U.S. marijuana, including Balanced Health Botanicals, were $5.8 million.
Pure Sunfarms launched its second Canadian cannabis product – a value brand called The Original Fraser Valley Weed Co. – in July, after the quarter ended.
“While the team naturally expects some cannibalization of our Pure Sunfarms brand, we also anticipate profitable market share gains as Fraser Valley targets a real need articulated by both the provincial (wholesale) boards, retailers and consumers,” CEO DeGiglio said.
Pure Sunfarms is prioritizing the new brand in British Columbia and Alberta, he added.
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In a separate announcement Tuesday, Village Farms said it now owns 85% of Dutch cannabis operator Leli Holland after that company received its final license for marijuana cultivation.
Village Farms first announced its option to acquire a stake in Leli Holland in 2021.
Shares of Village Farms trade as VFF on the Nasdaq exchange.
Solomon Israel can be reached at email@example.com.