Village Farms International, Inc. (VFF) reported its financial results for the three and nine months ended September 30, 2024, showing significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the third quarter of 2024, Village Farms achieved total sales of $83.4 million, a 20% increase from $69.5 million in Q3 2023. This growth was primarily driven by a $7.7 million increase in Canadian Cannabis sales and a $7.1 million rise in VF Fresh (Produce) sales, although U.S. Cannabis sales decreased by $1.0 million. Gross profit for the quarter rose to $15.7 million, up from $14.6 million in the prior year, reflecting a 7% increase. The net loss attributable to shareholders improved to $820,000 from $1.3 million in Q3 2023.

For the nine months ended September 30, 2024, total sales reached $253.6 million, also a 20% increase from $211.4 million in the same period of 2023. The increase was largely attributed to a $32.7 million rise in Canadian Cannabis sales and an $11.8 million increase in VF Fresh sales, partially offset by a $2.5 million decline in U.S. Cannabis sales. However, the net loss attributable to shareholders widened to $27.2 million from $9.3 million in the previous year, primarily due to an impairment charge of $11.9 million related to goodwill and intangible assets in the U.S. Cannabis segment.

Strategically, Village Farms made notable acquisitions, including the remaining 15% equity interest in Leli, increasing ownership to 100%, and acquiring an additional 10% interest in Rose LifeScience, raising its stake to 80%. These acquisitions were aimed at strengthening its position in the cannabis market. The company also reported a decrease in total current assets to $128.1 million from $151.8 million at the end of 2023, while total liabilities decreased to $132.9 million from $148.0 million.

The company’s cash and cash equivalents at the end of the reporting period were $28.7 million, down from $40.5 million a year earlier. Despite the challenges, Village Farms reported a net cash flow from operating activities of $9.9 million for the nine months ended September 30, 2024, compared to $6.8 million in the same period of 2023.

In terms of operational performance, the Canadian Cannabis segment continued to show strength, with net sales for Q3 2024 increasing by 27% year-over-year. However, the U.S. Cannabis segment faced challenges due to new CBD sales restrictions and increased competition, leading to a significant decline in sales and profitability.

Overall, Village Farms International, Inc. is navigating a complex market landscape, with strategic acquisitions and a focus on expanding its cannabis operations while managing financial losses and operational challenges.