VFF 10-K & 10-Q changes, risk factors and insider trading
Village Farms International, Inc. · Nasdaq · Agricultural Production-Crops · CIK 1584549 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Retail consolidation in the markets in which we participate and reliance on third-party distributors may negatively affect our operations and profitability.”
New heading “Our Canadian, Dutch and U.S. Cannabis businesses are subject to cannabis-related security breaches, which could result in significant losses.”
New heading “The November 2025 Appropriations Act, will make most hemp-derived products illegal beginning in November, 2026, and will materially and adversely affect our U.S. cannabis business unless further legislative action is taken”
New heading “We may be exposed to transfer pricing risks”
Removed heading “We have identified material weaknesses in our internal controls over financial reporting. If we fail to remediate the deficiencies in a timely manner, or at all, our shareholders could lose confidence in our financial reporting, which would harm our business and could negatively impact the price of our Common Shares.”
Removed heading “Our Canadian and U.S. Cannabis businesses are subject to cannabis-related security breaches, which could result in significant losses.”
Removed heading “Retail consolidation in the markets in which we participate may negatively affect our operations and profitability.”
Removed heading “We rely on third-party distributors.”
Removed heading “We may be exposed to transfer pricing risks.”
Removed heading “Our Common Shares may be delisted from the Nasdaq Capital Market if we do not regain compliance with the minimum bid price requirements by April 16, 2025.”
Removed heading “We expect that the cost of our debt could increase as a result of higher interest rates.”
Largest changes
The activities of our Canadian Cannabis business is subject to various laws, regulations and guidelines by governmental authorities, particularly under the Cannabis Act, relating to the cultivation, processing, manufacture, management, marketing, packaging/labelling, advertising, pricing, sale, distribution, transportation, storage, and disposal of cannabis, but also including laws and regulations relating to drugs, controlled substances, health and safety, insurance coverage, the conduct of operations and the protection of the environment, among other areas. Laws and regulations, applied generally, grant government agencies and self-regulatory bodies broad administrative discretion over our Canadian cannabis activities, including the power to limit or restrict business activities as well as impose additional disclosure requirements on its products and services. We endeavor to comply with all relevant laws, regulations, and guidelines. Health Canada inspectors routinely assess the facilities of our Canadian Cannabis business for compliance with applicable regulatory requirements.see in full comparisonFurthermore,From time to time, we may have different views from Health Canada regarding theimportinterpretation of the Cannabis Act andexportits regulations as applied to specific aspects ofitsourproductsoperations.fromFor example, we are currently engaged in correspondence with Health Canada regarding the regulatory treatment of certain packaging features used by Pure Sunfarms. We believe our packaging features used in our Canadian cannabis business are compliant with the Cannabis Act andintothe Cannabis Regulations, and we have communicated that position to Health Canada in detail and we expect to continue this dialogue and, if necessary, to seek clarification through available regulatory or judicial review channels; however, if we are unable to resolve this matter or anyjurisdictionotherisregulatory interpretation matter through dialogue and Health Canada pursues enforcement action against us, we could be subject totheproductregulatoryrecalls,requirementslicenseofsuspension,eachadministrative monetary penalties or other sanctions, and any challenges to suchjurisdiction. To the best of our knowledge, we are in material compliance with all such laws, regulations and guidelines; however, any failure by Pure Sunfarms or Rose LifeScience to comply with the applicable regulatory requirementsaction couldlead to possible sanctions, including the revocation or imposition of additional conditions on licenses to operate its business; the suspension or expulsion from a particular market or jurisdiction or of its key personnel; and/or the imposition of additional or more stringent inspection, testing and reporting requirements. Any of the foregoing could require extensive changes to the operations of Pure Sunfarms or Rose LifeScience;result inregulatorylegalorcostsagencyandproceedingsdiversionorofinvestigations,managementincreasedattention.complianceWhilecosts,wedamagedoawards,notcivilanticipateoracriminalmaterialfines or penalties or restrictionsimpact onits operations; harmourreputationoperations,or give rise to material liabilities or a revocation of the licenses and other permits of Pure Sunfarms or Rose LifeScience. Therethere can be no assurance thatanyHealthfuture regulatory or agency proceedings, investigations or auditsCanada willnotagreeresultwithinoursubstantialinterpretation, and any required modifications to our existing packaging may impose on us significant costs,awhichdiversioncouldofmateriallymanagement’s attention and resources or other adverse consequences to us andaffect ourbusiness and may have material adverse effect on ourfuture results ofoperations and financial condition.operations.
“Furthermore, the import and export of its products from and into any jurisdiction is subject to the regulatory requirements of each such jurisdiction. …”see in full comparison
“Our current operations are subject to various laws, regulations and guidelines administered by governmental authorities in the U.S. and Canada relating to the marketing, acquisition, manufacture, packaging, labeling, management, transportation, storage, sale and disposal of cannabis, CBD and U.S. hemp as well as laws and regulations relating to health and safety, conduct of operations and the protection of the environment. Additionally, our growth strategy continues to evolve as regulations governing the cannabis, CBD and U.S. …”see in full comparison
“Even absent the November 2025 Appropriations Act, CBD remains subject to further study by the FDA in order to receive FDA approval to include CBD based products in food and beverages. Until the FDA receives either more scientifically-based health and wellness studies, or further Congressional direction, the FDA will not allow CBD to be put into food or beverages. For more information, see “—Our U.S. Cannabis business is subject to FDA and USDA regulation.” below. …”see in full comparison
“Generally, non-compliance with our covenants may increase the risk of default on our debt (including by a cross-default to other credit agreements). If we are unable to comply with our debt covenants in the future, we may seek a waiver and/or an amendment(s) from the applicable lenders in respect of any such covenant in order to avoid any breach or default that might otherwise result therefrom. …”see in full comparison
“Generally, non-compliance with our covenants may increase the risk of default on our debt (including by a cross-default to other credit agreements). If we are unable to comply with our debt covenants in the future, we may seek a waiver and/or an amendment(s) from the applicable lenders in respect of any such covenant in order to avoid any breach or default that might otherwise result therefrom. …”see in full comparison
Full comparison: every changed paragraph (145)
We may be unable to regainmaintain profitability or achievecontinue future growth.
We may need additional financing to maintain and further develop our business.
We will need additional financing to maintain and further develop our business.
We have identified material weaknesses in our internal controls over financial reporting. If we fail to remediate the deficiencies in a timely manner, or at all, our shareholders could lose confidence in our financial reporting, which would harm our business and could negatively impact the price of our Common Shares.
A rise in interest rates would increase our debt service costs and negatively impact our cash flows, as well as add additional burden on our ability to meet our bank covenants.
We may be negatively affected by the use of third-party transportation services for our products.
The legal cannabis and hemp-derived CBD industries are relatively new, and wemay cannotbe predictmaterially whetheradversely theyaffected willby continuepotential tolegal growand asregulatory anticipated.changes.
Retail consolidation in the Canadian cannabis market may negatively affect our operations and profitability.
Third parties with whom we contract may be concerned about their reputational risks in respect of cannabis.
Our Canadian and U.S.Dutch Cannabiscannabis businesses are subject to cannabis-related security breaches, which could result in significant losses.
We face risks associated with cross-border trade and the potential for tariffs and other trade restrictions Retail consolidation in the markets in which we participate may negatively affect our operations and profitability.restrictions.
The November 2025 Appropriations Act will make most CBD products illegal beginning in November 2026, and will materially and adversely affect our U.S. cannabis business if further legal action is not taken.
Our greenhouse produce business is subject to extensive regulations.
Our operations are dependent on labor availability which includes accessing government sponsored foreign labor programs in both the United States and Canada.
VF Canada GP and VF Canada LP may be deemed to maintain a U.S. permanent establishment for tax purposes.
The IRS may assert that the Advances by VF Opco to U.S. Holdings was equity in the U.S. borrower for income tax purposes.
Our Common Shares may be delisted from the Nasdaq Capital Market if we do not regain compliance with the minimum bid price requirements by April 16, 2025.
We may be unable to regainmaintain profitability or achievecontinue future growth.
Our ability to generate net earnings and return tomaintain profitability is based, in part, on our ability to manage our cannabis profit margins and earnings before interest, tax, depreciation and amortization (“EBITDA”), as well as maintaining tomato production at a low-cost structure to increase our produce margins.. These margins are dependent upon our ability to sell our products profitably and to be the supplier of choice to our customers. The failure to execute on our low-cost structure in our producecannabis business at favorable margins or an increase in cost of goods or operating costs will have a material adverse effect on the financial condition, results of operations, and cash available.
Additionally, there is no assurance that the cannabis and hemp-derived CBD industries and markets will continue to exist and grow as currently estimated or anticipated or function and evolve in the manner consistent with management’s expectations and assumptions.assumptions (see “—Industry Risk Factors” below). Furthermore, we can provide no assurance that high-THC cannabis will ever become federally legal in the United States, and the legal and regulatory treatment of CBD in the United States remains uncertain (see “—Legal and Regulatory Risk Factors” below). As a result, we may be unable to achieve future growth or even maintain our existing businesses in these segments.
Our Canadian Cannabis business has a limited operating history. Our Canadian Cannabis business is therefore subject to many of the risks common to early-stage enterprises, including limitations with respect to personnel, financial, and other resources. In addition, we have incurred and anticipate that we will continue to incur substantial expenses relating to the development and ongoing operations of our Canadian Cannabis business. The payment and amount of any future dividend and shareholder loan repaymentsdividends to the Company from Canadian Cannabis business will depend upon, among other things, its available cash flows, after taking into account its operating and capital requirements. There is no assurance that we will be successful in achieving a return on our Canadian Cannabis business and the likelihood of success must be considered in light of the early stage of its operations and heavy tax burden on all Canadian cannabis companies.
Any expansion by us into jurisdictions outside of Canada and the United States is subject to additional risks, including political, economic, legal, and other risks and uncertainties associated with operating in or exporting to these jurisdictions. These risks and uncertainties include, but are not limited to, changes in the laws, regulations and policies governing the production, sale and use of cannabis, cannabis-derived products, hemp, or CBD, political instability, currency controls, fluctuations in currency exchange rates and rates of inflation, labor unrest, changes in taxation laws, regulations and policies, restrictions on foreign exchange and repatriation and changing political conditions and governmental regulations relating to foreign investment and the cannabis, hemp and CBD businesses more generally. Leli and its cultivation license are subject to the continued support by the government of the Netherlands under the Experiment, which is currently scheduled to end in April 2029 (see “Business—Our Cannabis Netherlands Segment” above). In 2024, the Partij voor de Vrijheid introduced a proposal to put the Experiment on hold, but it did not pass. If the Experiment was ended prematurely prior to its expiration in April 2029, the Company would suffer a material loss on its investment.
We have made, and may in the future make, acquisitions, joint ventures and investments with third parties that we believe will complement or augment our existing business. Our ability to identify and complete these acquisitions is dependent upon, and may be limited by, the availability of suitable candidates and capital. In addition, acquisitions, joint ventures and third-party investments could present unforeseen integration obstacles or costs, may not enhance our business, and/or may involve risks that could adversely affect us, including significant amounts of management time that may be diverted from operations in order to pursue and complete such transactions. Acquisitions, joint ventures, investments or expansion of scope of existing relationships could result in the incurrence of additional debt, costs and contingent liabilities, and there can be no assurance that these transactions will achieve the expected benefits to our business.
For example, in May 2025 we entered into a joint venture with Vanguard for the operation of our produce assets that we contributed to the joint venture as part of the Produce Transaction. As such, our produce business is now operated through a partnership in which the Company has a minority interest. We cannot control the actions of our joint venture partners, including any non-performance, default, or bankruptcy of the partners. As a result, we may have limited control over such arrangements and experience returns that are not proportional to the risks and resources contributed. To the extent that the anticipated benefits of the Produce Transaction are not achieved, or take longer than expected to achieve, the results of operations and the financial condition of the Company may suffer, which may materially adversely affect our business, operations and financial performance and cash flows.
In addition, in 2024 we commenced the Delta RNG Project through our partnership with Terreva Renewables, and we completed construction of one of our operations of the Dutch cannabis facilities owned by Leli. For the above-mentioned reasons, we can provide no assurance that we will achieve the anticipated benefits from these ventures in the near term or at all. The inability of our acquired business, joint ventures and third-party investments to perform as expected could have a material adverse effect on our business, financial condition and results of operations.
Historically, our senior management and board have been engaged in discussions surrounding the strategic direction of the Company in light of, among other things, the rapid growth and substantial changes in the cannabis industry and the other businesses in which we operate. As part of these discussions, our senior management and board from time to time have considered, and may consider in the future, various transactions in the context of our long-term business plan, including mergers, acquisitions, divestitures, alliances, joint ventures, investments or other strategic transactions. We have also been approached from time to time by parties wishing to discuss potential commercial or acquisition opportunities. In certain cases, we have entered into confidentiality agreements with third parties under which we have provided certain non-public information to those parties.
We can provide no assurance that any such discussions will result in a transaction or that any such transaction ultimately will have a positive impact on our business, prospects, financial condition, or results of operations.
For our Canadian and U.S. Cannabis businesses, the successful implementation of a customer acquisition plan and the continued growth in the aggregate number of potential customers are critical to the ability to attract and retain customers. Even if the products of our Canadian and U.S. Cannabis businesses achieve initial retail success, our long-term success is significantly dependent upon the ability to develop new and improved product lines. In addition, we can provide no assurance that campaigns to promote the products of our Canadian and U.S. Cannabis businesses will be successful in attracting customers, and any such campaigns are heavily regulated and can entail significant expense. Our failure to acquire and retain customers and the imposition of further restrictions on sales and marketing or further restrictions on sales in certain areas and markets, could have a material adverse effect on our business, operating results and financial condition.
Under the terms of our Credit Facilities (as defined in Item 7, “Liquidity and Capital Resources” below), we are subject to a number of covenants, including debt service covenants. These covenants could reduce our flexibility in conducting our operations by limiting our ability to borrow money and expanding into new business lines. On December 31, 2024, we were not in compliance with our financial covenants related to the fixed charge coverage ratio under our Term Loans and accordingly we obtained waivers from FCC for the quarterly and annual tests for the one financial covenants. We were also not in compliance with one of the financial covenants of our FCC Term Loan on December 31, 2023 (the annual testing date) but likewise had obtained a waiver from FCC for our annual 2023 financial covenants. There can be no assurance that we will be in compliance with the future financial covenants and that we will be able to obtain a future waiver from our creditors for any non-compliance in connection with the next testing date.
Generally, non-compliance with our covenants may increase the risk of default on our debt (including by a cross-default to other credit agreements). If we are unable to comply with our debt covenants in the future, we may seek a waiver and/or an amendment(s) from the applicable lenders in respect of any such covenant in order to avoid any breach or default that might otherwise result therefrom. If we default under any of the Credit Facilities and the default is not waived by the applicable lenders, the debt extended pursuant to all of our debt instruments could become due and payable prior to their stated due dates. In addition, a default on all or some portion of the Credit Facilities may result in foreclosure on our collateral, which includes promissory notes, a first mortgage on the owned controlled environment agriculture (high tech greenhouse) properties, and general security agreements over our assets. We cannot give any assurance that (i) our lenders will agree to any covenant amendments or continue to waive any covenant breaches or defaults that may occur under the applicable debt instruments, or (ii) we could pay this debt if any of it became due prior to its stated due date. Accordingly, any default by us under our existing debt that is not waived by the applicable lenders could materially adversely impact our results of operations and financial results and may have a material adverse effect on the trading price of our Common Shares.
We have also provided full recourse guarantees and have granted security interests in respect of the FCC Term Loan and the Pure Sunfarms Term Loan Facility with Farmour Credit Canada (“FCC”), which matures in May 2027.lenders. We are also subject to fluctuations in our working capital on a month-to-month basis, and as a result, we have access to financing under our producePure operatingSunfarms loanRevolving (“OperatingCredit Loan”). On May 24, 2024, the Company entered into an amendment to the Operating Loan, which extended the maturity date of the Operating Loan to May 24, 2027.Facility. Consistent with our past practice, in Produce, we may draw down on revolving credit facilities available under our Operating Loan.available. An inability to draw down upon our OperatingRevolving Loan, or to amendamend, extend or replace theour Operatingterm Loanloans on favorable terms (or at all), could have an adverse effect on our businesses and our financial condition.
Pure Sunfarms has term loans and a revolver loan with a bank syndicate which matures in February 2026 (the “Pure Sunfarms Term Loans”). The bank syndicate loans have quarterly financial covenants; an inability to adhere to these financial covenants could accelerate one or more of the bank syndicate loans which could have a material adverse effect on our cannabis business and our financial condition.
We have identified material weaknesses in our internal controls over financial reporting. If we fail to remediate the deficiencies in a timely manner, or at all, our shareholders could lose confidence in our financial reporting, which would harm our business and could negatively impact the price of our Common Shares.
Section 404 of the Sarbanes-Oxley Act (“SOX 404”) requires that our management assess and report annually on the effectiveness of our internal controls over financial reporting and identify any material weaknesses in our internal controls over financial reporting. In connection with our management's assessment of internal controls over financial reporting as of December 31, 2024, we identified material weaknesses in our risk assessment component of internal control over financial reporting that resulted in a failure to effectively design and implement sufficient internal controls related to our information technology general controls (“ITGCs”) in the areas of user access and program change-management over the information technology (“IT”) system that is utilized to support the Produce segment’s financial reporting processes. Specifically, under our existing ITGCs, we determined that there were insufficient controls to limit user access to this system and to enable oversight of changes being made to the financial inputs under this system. As a result, business process controls (automated and manual) that are dependent on and use information produced from the affected ITGCs were also deemed ineffective because they could have been adversely impacted by any inappropriate user access or financial input changes. In addition, we identified a material weakness in our internal control over financial reporting related ineffective internal controls over the review of journal entries by individuals separate from the preparer. See Item 9A of this Annual Report on Form 10-K. We had also identified a material weakness as of December 31, 2023 that was remediated during 2024.
Although these material weaknesses have not resulted in any error corrections in the Company’s financial statements, we can provide no assurance that, if we make any miscalculations or errors in the future, our internal controls over financial reporting will be able to catch and or rectify such errors. In addition, although we intend to remediate these material weaknesses in 2025, we can provide no assurance that remediation will be completed during the year. Accordingly, we may be at risk of making a material misstatement in our financial reporting which would harm our business and could negatively impact the price of our Common Shares.
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. If we fail to maintain an effective system of internal controls, we might not be able to report our financial results accurately or prevent fraud; and in that case, our shareholders could lose confidence in our financial reporting, which would harm our business and could negatively impact the price of our Common Shares. While we believe that we have sufficient personnel and review procedures to allow us to remediate the above-mentioned material weaknesses and maintain an effective system of internal controls in the future, we cannot assure you that we will not experience additional material weaknesses in our internal controls. Even if we are able to remediate the outstanding material weaknesses, because of the inherent limitations of internal controls, our internal controls over financial reporting may not prevent or detect fraud or misstatements. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations, or cause us to fail to meet our future reporting obligations.
The process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with SOX 404 is costly and challenging, and we may not be able to complete evaluation, testing, and any required remediation in a timely fashion. If we fail to remediate the material weaknesses in a timely manner, or at all, and are unable to achieve adequate internal control over financial reporting in the future, we may not be able to produce reliable financial reports or help prevent fraud, which could prevent us from complying with our reporting obligations on a timely basis, which could result in the loss of investor confidence in the reliability of our consolidated financial statements, harm our business and negatively impact the trading price of our Common Shares.
For our Canadian, Dutch and U.S. cannabis businesses, the successful implementation of a customer acquisition plan and the continued growth in the aggregate number of potential customers are critical to the ability to attract and retain customers. Even if the products of our Canadian, Dutch and U.S. Cannabis businesses achieve initial retail success, our long-term success is significantly dependent upon the ability to develop new and improved product lines. In addition, we can provide no assurance that campaigns to promote the products of our Canadian, Dutch and U.S. Cannabis businesses will be successful in attracting customers, and any such campaigns are heavily regulated and can entail significant expense. Our failure to acquire and retain customers and the imposition of further restrictions on sales and marketing or further restrictions on sales in certain areas and markets, could have a material adverse effect on our business, operating results and financial condition.
Under the terms of our Credit Facilities (as defined in Item 7, “Liquidity and Capital Resources” below), we are subject to a number of covenants, including debt service covenants. These covenants could reduce our flexibility in conducting our operations by limiting our ability to borrow money and expanding into new business lines. While the Company was compliant with all of its loan covenants on December 31, 2025, in prior years, we were not in compliance with our financial covenants related to the fixed charge coverage ratio under our Term Loans and accordingly we obtained waivers from FCC for the annual tests for the one financial covenants. There can be no assurance that we will be in compliance with the future financial covenants or that we will be able to obtain a future waiver from our creditors for any non-compliance in connection with the next testing date.
Generally, non-compliance with our covenants may increase the risk of default on our debt (including by a cross-default to other credit agreements). If we are unable to comply with our debt covenants in the future, we may seek a waiver and/or an amendment(s) from the applicable lenders in respect of any such covenant in order to avoid any breach or default that might otherwise result therefrom. If we default under any of the Credit Facilities and the default is not waived by the applicable lenders, the debt extended pursuant to all of our debt instruments could become due and payable prior to their stated due dates. In addition, a default on all or some portion of the Credit Facilities may result in foreclosure on our collateral, which includes promissory notes, a first mortgage on the owned CEA (high tech greenhouse) properties, and general security agreements over our assets. We cannot give any assurance that (i) our lenders will agree to any covenant amendments or continue to waive any covenant breaches or defaults that may occur under the applicable debt instruments, or (ii) we could pay this debt if any of it became due prior to its stated due date. Accordingly, any default by us under our existing debt that is not waived by the applicable lenders could materially adversely impact our results of operations and financial results and may have a material adverse effect on the trading price of our Common Shares
Our business is dependent on a number of key inputs and their related costs including raw materials, packaging materials and supplies related to our growing operations, as well as electricity, water, and other local utilities. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact our business, financial condition, and operating results. Any inability to secure required supplies and services or to do so on appropriate terms could have a materially adverse impact on our business, financial condition, and operating results. Our controlled environment agricultureCEA operations consume considerable energy for heat and carbon dioxide production and are vulnerable to rising energy costs. Energy costs have shown volatility, which has and may continue to adversely impact our cost structure. Should the cost of energy rise, and should we face difficulties in sustaining price increases to offset the impact of increasing fuel costs, gross profit margins could be adversely impacted.
Our operations may be adversely affected by severe weather including wind, snow, hail, and rain, which may result in our operations having reduced harvest yields due to lower light levels,levels. orFor aexample, more catastrophic event as occurred at our Marfa, Texas facilities onin May 31, 2012, when we lost three of our operating greenhouses to a short but powerful hailstorm.hailstorm Althoughat our former Marfa, Texas facilities, and in February 2021, we experienced major outages and increased electricity pricing at our Texas facilities as a result of a major winter storm. While we maintain fixed contracts for a portion of our anticipated electricity requirements and have improved back-up systems, the impact of a future similar event may adversely impact our business operations and financial condition. In addition, although we anticipate and factor in certain periods of lower than optimal light levels, extended periods of severe or unusual light levels may adversely impact our financial results due to higher costs and missed sales opportunities arising from reduced production yields.
From February 13-17, 2021, a major winter and ice storm with extremely cold temperatures impacted parts of the United States and Canada and in particular Texas. The unprecedented winter storm caused electricity demand in Texas to increase dramatically as Texas facilities were not built for such climate conditions. The storm caused major problems with sources of electricity, due to frozen wind turbines, natural gas production losses, and power generator outages, leading to a short-term situation in which demand vastly exceeded supply within the Texas power grid, which is not connected to the larger U.S. power grid. The loss of fuel supply and power generating capacity forced the Electric Reliability Council of Texas (“ERCOT”), the nonprofit grid operator, to declare an Energy Emergency Alert Level 3 and begin rotating power outages. Throughout the 5-day emergency period, the real-time price for electricity elevated to the maximum allowable price of $9,000 per MWh, which is more than 100 times higher than the prices observed in early February 2021 and historical February pricing. In order to mitigate future price instability, in winter months, we have initiated fixed contracts for a significant portion of its anticipated electricity requirements at all our Texas facilities. In addition, we reassessed our back-up systems to ensure that the greenhouses have enough capacity to produce the required electrical output if an outage occurs again in the future. While we maintain fixed contracts for a portion of our anticipated electricity requirements and have improved back-up systems, the impact of a future similar event may adversely impact our business operations and financial condition.
Our business operations, some of which are located on the British Columbia coast, are located in an area that is geologically active and considered to be at risk from earthquakes and volcanic eruptions. Our earthquake and volcanic eruption deductible are 10% of our loss caused by the earthquake or volcanic eruption, subject to a maximum deductible of C$5,000,000. In addition, climate change over time is predicted to lead to changes in the frequency of storm events as well as their severity. We are unable to predict the impact of climate change on our business. Our Texas facilities, due to our claim in respect of the May 31, 2012 hailstorm, are also subject to high deductibles as well as a total claim limit that if all four facilities were simultaneously impacted by the same storm or catastrophic event may result is less than adequate coverage. While we maintain insurance coverage, we cannot predict that all potential insurable risks have been foreseen or that adequate coverage is maintained against known risks.
While we maintain insurance coverage, we cannot predict that all potential insurable risks have been foreseen or that adequate coverage is maintained against known risks.
In particular, because our Canadian Cannabis business is engaged in and operateoperates within the cannabis industry, there are exclusions and additional difficulties and complexities associated with obtaining insurance coverage that could cause us to suffer uninsured losses, which could adversely affect our business, results of operations, and profitability. Further, our insurance coverage is subject to coverage limits and exclusions and may not be available for the risks inherit in the business. If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, we may be exposed to material uninsured liabilities that could impede liquidity, profitability, or solvency.
In addition, damage caused by an accidental or natural disaster to any or all of our key production facilities may result in significant replacement costs and loss of business that may not be fully recoverable or is subject to a high deductibledeductible. (suchSee as“—Our anoperations earthquakeare orsubject volcanicto eruptionnatural incatastrophes” British Columbia) under any insurance policy.above. Furthermore, we do not carry crop loss insurance, and accordingly, we would have to bear the cost of any significant losses related to crop losses in the future.
We have made, and may in the future make, acquisitions, joint ventures and investments with third parties that we believe will complement or augment our existing business. Our ability to identify and complete these acquisitions is dependent upon, and may be limited by, the availability of suitable candidates and capital. In addition, acquisitions, joint ventures and third-party investments could present unforeseen integration obstacles or costs, may not enhance our business, and/or may involve risks that could adversely affect us, including significant amounts of management time that may be diverted from operations in order to pursue and complete such transactions. Acquisitions, joint ventures, investments or expansion of scope of existing relationships could result in the incurrence of additional debt, costs and contingent liabilities, and there can be no assurance that these transactions will achieve the expected benefits to our business. For example, in 2024 we commenced the Delta RNG Project through our partnership with Terreva Resources, and we completed construction of one of our operations of the Dutch cannabis facilities owned by Leli. We can provide no assurance that we will achieve the anticipated benefits from these ventures. The inability of our acquired business, joint ventures and third-party investments to perform as expected could have a material adverse effect on our business, financial condition and results of operations.
Historically, our senior management and board have been engaged in discussions surrounding the strategic direction of the Company in light of, among other things, the rapid growth and substantial changes in the cannabis industry and the other businesses in which we operate. As part of these discussions, our senior management and board from time to time have considered, and may consider in the future, various transactions in the context of our long-term business plan, including mergers, acquisitions, divestitures, alliances, joint ventures, investments or other strategic transactions. We have also been approached from time to time by parties wishing to discuss potential commercial or acquisition opportunities. In certain cases, we have entered into confidentiality agreements with third parties under which we have provided certain non-public information to those parties. In particular, we are currently exploring options to sell certain assets in our Produce business[, including an ongoing sale process for our Monahans (Permian Basin, Texas) greenhouse facility]2 We can provide no assurance that any such discussions will result in a transaction or that any such transaction ultimately will have a positive impact on our business, prospects, financial condition, or results of operations.
Manufacturers of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labelling disclosure. If any of our products are recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant number of sales and may not be able to replace those sales at an acceptable margin or at all. In addition, a product recall may require significant management attention. Although we have put in place detailed procedures for testing our products, there can be no assurance that any quality, potency, or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action, or lawsuits. A recall for any of the foregoing reasons could lead to decreased demand for products and could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. Additionally, product recalls may lead to increased scrutiny of our operations by Health Canada, the U.S. Food and Drug Administration (“FDA”) and other regulatory agencies, requiring further management attention and potential legal fees and other expenses.
Any expansion by us into jurisdictions outside of Canada and the United States is subject to additional risks, including political, economic, legal, and other risks and uncertainties associated with operating in or exporting to these jurisdictions. These risks and uncertainties include, but are not limited to, changes in the laws, regulations and policies governing the production, sale and use of cannabis, cannabis-derived products, hemp, or CBD, political instability, currency controls, fluctuations in currency exchange rates and rates of inflation, labor unrest, changes in taxation laws, regulations and policies, restrictions on foreign exchange and repatriation and changing political conditions and governmental regulations relating to foreign investment and the cannabis, hemp and CBD businesses more generally. Leli and its cultivation license are subject to the continued support by the government of the Netherlands for the previously passed legislation - 2017-2021 Coalition Agreement (further ratified by the 2021-2025 Coalition Agreement) - called The Controlled Cannabis Supply Chain Experiment. Recently, a proposal to put the experiment on hold until a new cabinet is seated did not pass. If the experiment was ended prematurely, the Company would suffer a material loss on its investment.
Due to the perishable and premium nature of our produce products, we depend on fast and efficient transportation to distribute our products. Any prolonged disruption of this transportation network could have an adverse effect on our financial condition and results of operations. In addition, the use of third-party transportation services can cause logistical problems with and delays in customers obtaining their orders and cannot be directly controlled by us. Any delay by third party transportation services may adversely affect our financial performance. In addition, rising costs associated with third-party transportation services used by our produce business to ship our products may also adversely impact our profitability, and more generally our business, financial condition, results of operations and prospects.
Our Netherlands cannabis segment is also subject to regulatory distribution and transportation requirements. Any disruption to these third-party services could have a negative impact on our operations.
Our revenues are derived from the growing of agricultural products, including cannabis and produce. As such, we are subject to the risks inherent in an agricultural business, such as weather, insects, plant and seed diseases, shortage of qualified labor and similar agricultural risks, which may include crop losses, for which we are not insured. There can be no assurance that natural elements or labor issues will not have a material adverse effect on any such future production. Although our vegetablescannabis and Canadian cannabisproduce products are grown in climate-controlled greenhouses, andas well as indoor facilities, in which we carefully monitor the growing conditions within our greenhouses and retain experienced production personnel, there can be no assurance that natural elements will not have a material adverse effect on the production of these products. Any such agricultural risks could have a material adverse effect on our business, prospects, financial condition, results of operations and our cash flows.
In particular, cannabis plants can be vulnerable to various pathogens including bacteria, fungi, viruses, and other miscellaneous pathogens. Such instances often lead to reduced crop quality, reduced potency, stunted growth and/or death of the plant. Moreover, cannabis is phytoremediative, meaning that it may extract toxins or other undesirable chemicals or compounds from the ground in which it is planted. Various regulatory agencies have established maximum limits for pathogens, toxins, chemicals, and other compounds that may be present in agricultural materials. If the cannabis of Pure Sunfarms orSunfarms, Rose LifeScience or Leli Holland is found to have levels of pathogens, toxins, chemicals or other undesirable compounds that exceed established limits, the Canadian cannabis product may not be suitable for commercialization and Pure Sunfarms or Rose LifeSciencewe may have to destroy the applicable portions of our crops.production. CropsCannabis production lost due to pathogens, toxins, chemicals, or other undesirable compounds may have a material adverse effect on our business and financial condition.
Our tomato plants are vulnerable to the tomato brown rugose fruit virus (“ToBRFV”). AllOur of ourremaining tomato facilitiesfacility havehas been negatively impacted by ToBRFV overin the past several years, except for Delta 2, which only recently resumed tomato production.past. ToBRFV is an identified virus affecting tomatoes, peppers and possibly other plants.plants including cannabis. ToBRFV can be transmitted mechanically and spread between plants or on contaminated tools, clothes or hands and may not be able to be eradicated even with a complete facility clean out, including multiple sanitations with disinfectants known to be effective on the ToBRFV. ToBRFV leads reduced crop quantity, ending a crop cycle early or can result in the loss of an entire crop in one of our greenhouse facilities. In addition, delivery of tomato crops across the U.S.-Mexico and U.S.-Canada bordersborder encounterscan encounter additional inspections due to ToBRFV and those crops may bepossibly denied entry. Crops lost to ToBRFV may have a material adverse effect on our business and financial condition. Produce seed companies are in the process of developing tomato varieties that are resistant to ToBRFV; however, we can provide no assurance as to the effectiveness of such varieties. ToBRFV-resistant varieties will also need to be commercially viable with respect to yields and taste. In addition, we have implemented procedures to mitigate the spread of ToBRFV within our greenhouses.tomato facility. However, it will be several years before the negative impact of ToBRFV on the tomato industry is resolved and even with mitigation the virus may have a material adverse effect on our results of operations.
The legal cannabis and hemp-derived CBD industries are relatively new,new and wemay cannotbe predictmaterially whetheradversely theyaffected willby continuepotential tolegal growand asregulatory anticipated.changes.
As federal License Holders under the Cannabis Act, our Canadian Cannabis business (specifically, Pure Sunfarms and Rose LifeScience) is operating in the relatively new cannabis industry and market in Canada, and our U.S. Cannabis business is operating in the relatively new hemp-derived CBD industry and market.market and our Leli Holland business is now operating under the Experiment, the current phase of which is set to expire in April 2029. In addition to being subject to general business risks, we must continue to build brand awareness in these industries and market sharemarkets through significant investments in our strategy, production capacity, quality assurance and compliance with regulations. Research in Canada, the United States and internationally regarding the health benefits, viability, safety, efficacy and dosing of cannabis or isolated cannabinoids remains in relatively early stages. Few clinical trials on the benefits of cannabis or isolated cannabinoids have been conducted. Future research and clinical trials may draw opposing conclusions to statements contained in the articles, reports and studies currently favored, or could reach different or negative conclusions regarding the health benefits, viability, safety, efficacy, dosing or other facts and perceptions related to cannabis, which could adversely affect social acceptance of cannabis and the demand for our cannabis and cannabinoid products.
Our Canadian Cannabis business has been negatively affected byin prior years, and may continue tocould be impacted by cannabis supply and demand fluctuations.
Entities licensed under the Cannabis Act have mostin recentlypast andyears may continue to produceproduced more cannabis than the current adult-use demand. In order to meet the initial adult-use demand, Pure Sunfarms, Rose LifeScience and other entities licensed under the Cannabis Act built special purpose cultivation facilities with additional production capacity to be licensed. Recently,In prior years, due to oversupply within the industry, some federal Licensed Producers are reducingreduced capacity by shuttering cultivation facilities and others are filing under the Companies’ Creditors Arrangement Act of Canada. Recently, primarily due to the growth of exporting medicinal cannabis to other countries, some Licensed Producers—including Pure Sunfarms—have commenced or announced capacity expansion. Adult and medicinal use demand for cannabis products is dependent on a number of social, political, and economic factors that are beyond our control including the pace of new retail cannabis stores. In addition, the initial demand that has been experienced following legalization in Canada may not continue at comparable levels or may not be sustainable as a portion of such demand may have been a result of the novelty of legalization.
Management's Discussion & Analysis (MD&A)
New heading “Cannabis Netherlands Segment (operating as Leli Holland)”
New heading “International Medical Cannabis (Reported Within Canadian Cannabis)”
New heading “Netherlands Cannabis”
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024”
New heading “Income (Loss) Before Taxes and Income (Loss) from Equity Method Investments”
New heading “Income (Loss) from Discontinued Operations”
New heading “Net Loss (Income) Attributable to Non-controlling Interests, Net of Tax”
New heading “Net Income (Loss) Attributable to Village Farms International, Inc. Shareholders”
New heading “Net Income (Loss) Attributable to Non-controlling Interests, Net of Tax”
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024”
New heading “Other Expense, Net”
New heading “Net Income (Loss)”
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024”
New heading “NETHERLANDS CANNABIS SEGMENT RESULTS”
New heading “Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024”
New heading “Net Income From Continuing Operations”
New heading “Adjusted EBITDA From Continuing Operations”
New heading “Gross Profit (Loss)”
New heading “Net Income (Loss) From Continuing Operations”
New heading “Adjusted EBITDA From Continuing Operations”
Removed heading “Village Farms Clean Energy”
Removed heading “Goodwill and Intangible Asset Impairments”
Removed heading “Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”
Removed heading “Other Income (Expense)”
Removed heading “Loss Before Taxes and Loss from Equity Method Investments”
Removed heading “Net Loss Attributable to Non-controlling Interests, Net of Tax”
Removed heading “Loss from Equity Method Investments”
Removed heading “Net Loss Attributable to Village Farms International, Inc. Shareholders”
Removed heading “Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”
Removed heading “Other (Expense) Income, net”
Removed heading “Goodwill and Intangible Asset Impairments”
Removed heading “Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022”
Removed heading “Equity Offerings”
Largest changes
“Goodwill and Intangible Asset Impairments”see in full comparison
“Goodwill and Intangible Asset Impairments”see in full comparison
“Inventories are valued at the lower of cost or net realizable value. The cost of inventory includes capitalized production costs, including labor, materials, post-harvest costs and depreciation. Inventoriable costs are expensed to cost of goods sold on the Consolidated Statement of Operations in the same period as finished products are sold. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period when the write-down or loss occurs. …”see in full comparison
“Inventories are valued at the lower of cost or net realizable value. The cost of inventory includes capitalized production costs, including labor, materials, post-harvest costs and depreciation. Inventoriable costs are expensed to cost of goods sold on the Consolidated Statement of Operations in the same period as finished products are sold. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period when the write-down or loss occurs. …”see in full comparison
“The Pure Sunfarms Secured Credit Facilities also contain customary covenants, customary representations and warranties, affirmative covenants, financial covenants and events of default.”see in full comparison
see in full comparisonTheAtCompanyDecemberis31,required to comply with financial covenants, measured either quarterly or annually depending on2024, thecovenant. TheCompany was not in compliance with financial covenants related to the fixed charge coverage ratio under the FCC Term Loan (as defined below) and thePure Sunfarm'sPSF TermLoans,Loan (as defined below), for whichitthe Company received waivers.TheOn April 10, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with FCC as the lender, which amended and restated the FCC Term Loan. Among other things, the A&R Credit Agreement replaced the current financial covenantswillwithbemorereinstatedfavorableatfinancialthecovenants.end of the first quarter forUnder the PureSunfarm'sSunfarmsTermSecuredLoansCreditandFacilitiesat(as defined below) entered into on April 17, 2025, theendCompanyofisthealsofiscal year 2025 for the FCC loan. Management expectsrequired toregainmaintaincompliance during the next testing period. FCC measures the Company'scertain financialcovenants once a year on the last day of the year and the Pure Sunfarm's Term Loan covenants are measured once a quarter on the last day of the quarter.covenants. We can provide no assurance that we will be in compliance, or receive a waiver, for any non-complianceasof thenextfinancialannual date.covenants. See “Risk Factors—Business and Operational Risk Factors—We are subject to restrictive covenants under our Credit Facilities.”
Full comparison: every changed paragraph (294)
Village Farms International, Inc. (“VFF”, together with its subsidiaries, the “Company”, “Village Farms”, “we” “us” or “our”) is a corporation existing under the Business Corporations Act (Ontario). The Company’s principal operating subsidiaries are Village Farms Canada Limited Partnership ("VFCLP"), Village Farms L.P. ("VFLP"), Pure Sunfarms Corp. (“Pure Sunfarms” or "“PSF"”), Balanced Health Botanicals, LLC (“Balanced Health”), Rose LifeScience Inc. ("“Rose LifeScience” or “Rose”), Leli Holland B. V. (“Leli” or “Leli Holland”) which formally changed its name to Village Farms International B.V. on March 6, 2026, Village Farms Canada Limited Partnership (“VFCLP”), Village Farms L.P. (“VFLP”), and VF Clean Energy, Inc. (“VFCE”), and Leli Holland B. V. ("Leli" or "Leli Holland").
TheVillage Company’sFarms' visionmission is to beapply recognizeddecades asof an international leaderinnovation in consumerintensive productsagriculture developedto fromlead plants,a wherebysustainable wepath produceforward andfor marketthe value-addedglobal productscannabis that are consistently preferred by consumers.industry. To do so, we leverage decadesa proven track record of asset investment and development, cultivation expertise, investment,expertise and experience in freshcontrolled environment agriculture to produce into branded and wholesale cannabis products withinfor global markets with legally permissible opportunities.regulatory frameworks.
In Canada, we converted two producelarge-scale, advanced greenhouse facilities to growcannabis cannabisproduction to serve for the Canadian legal adult use (recreational), market.as well as international medical export, markets. Our focus for our Canadian Cannabis segment is to produce high quality cannabis, leveraging our low-cost production to provide preferred products at an attractive price that address the preferred consumer segments in the market. This market positioning, combined with our cultivation expertise, has enabled us to evolve into thea third best-sellingleading producer of dried flower nationally and one of the few Canadian licensed producers with consistently strong operating results.
Additionally,Through throughstrategic organic growth, exports and/or acquisitions, we have a strategyintend to participate in other international markets where cannabis attains legal status. In September 2021, our Canadian Cannabis business began exporting cannabis products to Australia for that country’s medical market. In March 2022, our Canadian Cannabis business received European Union Good Manufacturing Practice (“EU GMP”) certification for Pure Sunfarms’our 1.1 million square foot Delta 3 cannabis facility located in Delta, British Columbia (“B.C.”) which permits Pure Sunfarms to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification. In late 2022, Pure Sunfarms commenced exports to Israel and in 2023, Pure Sunfarms began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries. As a result of the typically higher margins in international medical markets, we expect international expansion to enhance our profitability while expanding our brand and experience into emerging legal cannabis markets.
which permits us to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification. In late 2022, we commenced exports to Israel. In 2023, we began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries. In 2025, we began exporting cannabis products to New Zealand. As a result of the typically higher margins in international medical markets, we expect international expansion to enhance our profitability while expanding our brand and experience into emerging legal cannabis markets.
During Q4September 2024, we completed our acquisition of the remaining 15% equity ownership interest in Leli Holland and we now report this business as a separate operating segment.Holland. Through our ownership of Leli Holland, we hold one of ten licenses to cultivate and distribute cannabis legally in the Netherlands under that country’s Controlled Cannabis Supply Chain Experiment, with sales beginning in the first quarter of 2025.
We also cultivate tomatoes and market them through Village Farms Fresh (a Vanguard Holdings Company) under the Village Farms Fresh (“VF Fresh”) brand which sells to mass retail grocery stores and food distribution companies.
We also operate a large, well-established, produce business (primarily tomatoes) under the Village Farms Fresh (“VF Fresh”) brand which sells to food distribution companies and mass retail stores. We own and operate produce cultivation assets in Texas and Delta, B.C. and source produce from growing partners in Mexico and Canada.
Our intention is to use our assets, expertise and experience (across the cannabis, hemp, CBD and produce ecosystems) to participate in U.S.the global cannabis marketsmarket subject to compliance with all applicable U.S. federal and statenational laws and applicable stock exchange rules.
Canadian Cannabis Canada Segment
Our Cannabis Canada ("Canadian Cannabis") segment includesis composed of wholly owned Pure Sunfarms and an 80% ownedownership interest in Rose LifeScience.
Pure Sunfarms is one of the single largest cannabis growing operations in the world, one of the lowest-cost greenhouse producers and one of the leading flower brandbrands in Canada. Pure Sunfarms leverages our 30 years of experience as a vertically integrated greenhouse grower for cannabis growth opportunities in Canada with commercial distribution in all Canadian provinces and territories.territories, Ouras long-termwell objectiveas for Pure Sunfarms isexportation to bemedical themarkets leadingoutside low-cost,of high-qualityNorth cannabis producer in Canada.America.
Our long-term objective for our Canadian Cannabis segment is tobe garnerthe leading low-cost, high-quality cannabis producer and sustainone aof the leading retailbrands marketnationally, shareand to leverage our experience and success in Canada,Canada asto well asbecome a leading exporter of medicinal cannabis, stemming from our position as a leading low-cost, high-quality cannabis producer in Canada and expand our Canadian success into growing international cannabis markets across the globe.world.
Cannabis Netherlands Segment (operating as Leli Holland)
Our Cannabis Netherlands operating segment is composed of wholly owned subsidiary, Leli Holland B.V. Through Leli, we hold one of ten licenses to cultivate and distribute recreational cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program, with sales commencing in February 2025. Leli Holland B.V. formally changed its name to Village Farms International B.V. effective on March 6, 2026.
Cannabis U.S. Cannabis Segment
Our Cannabis U.S. ("U.S. Cannabis") operating segment includesis composed of wholly owned subsidiary Balanced Health.
Balanced Health is one of the leading cannabinoid (CBD) brands and e-commerce platforms in the United States. Balanced Health develops and sells high-quality CBD and hemp-derivedhemp-based health and wellness products, distributing its diverse portfolio of consumer products through retail storefronts and its top-ranked e-commerce platform, CBDistilleryTM.CBDistillery™.
Our Produce segment is composed of VFCLP and the remaining VFLP assets after the sale and transfer of our produce assets with Vanguard Holdings in May 2025.
Our Produce segment cultivates premium-quality, greenhouse-grown tomatoes in Canada. The tomatoes are grown in a sophisticated, highly intensive agricultural greenhouse facility located in Delta, British Columbia.
On May 30, 2025, the Company closed on the transformative transaction to privatize certain assets and operations of its Produce segment, including its Marfa II and Fort Davis greenhouses, and all of its produce distribution centers, through a series of asset and lease transfers. The Company determined that the assets and operations that had been disposed of met the criteria for discontinued operations presentation. For all periods presented, the operating results associated with the assets disposed of have been reclassified into net income (loss) from discontinued operations, net of income taxes, in the Consolidated Statements of Operations and Comprehensive Income (Loss). The associated assets and liabilities have been reflected as current and long-term assets and liabilities of discontinued operations in the Consolidated Statements of Financial Position, and the cash flows from the Company’s discontinued operations are presented in the Consolidated Statements of Cash Flows for all periods presented. See "Business-Our Produce Segment - Produce Transaction Agreements".
Our Produce segment is composed of VF Fresh, which currently consists of Village Farms LP and Village Farms Canada LP.
Through VF Fresh, we grow, market and distribute premium-quality, greenhouse-grown produce in North America. These premium products are grown in sophisticated, highly intensive agricultural greenhouse facilities located in British Columbia and Texas. We also market and distribute premium tomatoes, peppers and cucumbers produced under exclusive and non-exclusive arrangements from our greenhouse supply partners located in Mexico, B.C. and Ontario. We primarily market and distribute under our Village Farms® brand name to retail supermarkets and dedicated fresh food distribution companies throughout the United States and Canada.
Clean Energy Segment
Our Clean Energy segment is comprisedcomposed of wholly owned subsidiary, VF Clean Energy Inc.
VFCE, whichVFCE has partnered with Terreva Renewables (formerly Mas Energy) for the Delta RNG Project based on VFCE’s 20-year contract (including a five-year option to extend) with the City of Vancouver to capture landfill gas at the Delta, B.C. landfill site (the "Delta RNG Project"). The Delta RNG Project, which commenced operations in 2024, converts VFCE’s previous landfill gas-to-electricity business into a state-of-the-art landfill gas tointo high-demand renewable natural gas ("RNG") through a state-of-the-art facility. Terreva Renewables sells the renewable natural gas and VFCE will receivereceives a portion of the revenue in the form of a monthly royalty.
Leli Segment
Our Leli operating segment is comprised of wholly owned Leli Holland, which we acquired during Q4 2024.
Through Leli, we hold one of ten licenses to cultivate and distribute cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program, with sales commencing in February 2025.
The future of our business continues to depend on not only the cannabis regulation in Canada but also the current and developing cannabis regulations in other countries, including the EU and UN conventions. In addition, the November 2025 Appropriations Act will effectively recriminalize CBD in the United States which could have a material adverse effect on our U.S. cannabis segment. See “Risk Factors—Legal and Regulatory Risk Factors—The November 2025 Appropriations Act will make most CBD product beginning in November 2026 and will materially affect our U.S. cannabis business if further legal action is not taken”. The potential for U.S. federal legalization and/or rescheduling of cannabis, FDA regulation of CBD-derived products and the legal and other jurisdictions where we do business could have a material impact on the Company’s current and future operations. See “Risk Factors—Legal and Regulatory Risk Factors—We cannot predict when, if ever, cannabis will be federally legal in the United States and any rescheduling of U.S. Schedule I cannabis to Schedule III would have an uncertain impact on our business”.
The future of our business continues to depend on the potential for U.S. federal legalization and/or rescheduling of cannabis, FDA regulation of CBD-derived products and the legal and regulatory landscape in Canada and other jurisdictions where we do business. See “Risk Factors—Legal and Regulatory Risk Factors—We cannot predict when, if ever, cannabis will be federally legal in the United States and any rescheduling of U.S. Schedule I cannabis to Schedule III would have an uncertain impact on our business”. Our business may also be materially affected by potential U.S./Canadian and U.S./Mexico tariffs and/or other trade restrictions, and our supply of labor may be negatively affected by immigration policy in the United States.restrictions. See “Risk Factors—Industry Risk Factors—We face risks associated with cross-border trade and the potential for tariffs and other trade restrictions” and “Risk Factors—Labor and Employment Risk Factors—“Our operations are dependent on labor availability which includes accessing government sponsored foreign labor programs in both the United States and Canada”.
In addition, our business has been affected, and we expect will continue to be affected for the foreseeable future, by risinginflation inflation,rates, andand, indirectly, world conflicts (e.g., Russia/Ukraine), which may negatively affect our operating results. Inflation has affected and continues to affect, amongst other items,affect supply chain and labor costs as well as purchasing decisions of consumersconsumers, amongst other items, which may impact demand for our products.
The Company continues to maintain a top five overall market share position in Canada and held the number one position in dried flower as of February 2026, despite planned reductions in sales of lower-margin SKUs1 to favor higher-margin opportunities;
Surpassed the high end of its targeted gross margin range of 30-40%, marking the fourth consecutive quarter meeting or exceeding the target range and contributing to record annual adjusted EBITDA from continuing operations performance;
Introduced several new and unique packaging innovations to the Canadian market, including the launch of a one-way aroma valve built directly into its dried flower packaging, windowed packaging for its flower products which enables consumers to see product before purchase, and a proprietary built-in matchbox accessory for its pre-roll offerings to meet growing demand for ready-to-enjoy cannabis experiences;
Named the winner of Business Vancouver's (BIV) 2026 BC Export Awards in the Consumer Products category, recognizing our exceptional performance and contribution to British Columbia's growing international trade economy;
Published groundbreaking peer-reviewed research in Scientific Reports (Nature Portfolio), highlighting the natural variability of THC potency within cannabis plants, reinforcing a need for a greater focus on product quality versus potency and more transparent and accurate labeling across the industry; and, During the fourth quarter, started the expansion of cultivation capacity in the remaining half of its Delta 2 greenhouse to meet increasing demand in Canadian and our international export markets. The expansion is expected to yield an incremental 40 metric tons of annualized cannabis production, expanding capacity by approximately 33% once completed.
Remained a top three producer in Canada and was second fastest growing producer organically year-over1;
Further expanded its number one national market share position in dried flower1;
Held number two national market share position in the pre-roll category for 20242;
Held number two market share in the provinces of Ontario and Quebec for 20242;
Launched The Canna Czar presented by Soar in Q4, a 2.1g specialty twax blunt with unique construction, premium ingredients, and handcrafted process align with Soar’s tastemaker method, which emphasizes innovation and quality;
Launched Super Toast All-In-One Vape in Q4, combining grab n’ go functionality with classic fountain-inspired flavours and a built-in USB-C rechargeable battery and auto-draw functionality.
International medicinal sales in 2024 increased to $10.9 million, with continued growth in shipment volumes to Australia, Germany and the United Kingdom;
International sales volumes increased 124% year-over-year during the fourth quarter;
Continued to hold the #1 and #4 cultivars in the German market through a supply agreement; and Subsequent to year end 2024, expanded international medical cannabis distribution to New Zealand through a supply agreement with Medleaf Therapeutics, an established New Zealand-based medical cannabis company with a comprehensive distribution network.
1.
For the fourth quarter of 2024. Based on estimated retail sales from HiFyre, other third parties and provincial boards.
2.
1. Based on estimated retail sales from HiFyre, other third parties and provincial boardsboards.
International Medical Cannabis (Reported Within Canadian Cannabis)
International export sales increased 517% year-over-year, driven by continued strength of demand in Germany and steady performance across other international markets; and The Company believes that it remains the largest exporter of medical cannabis to Europe, with three of the top five leading cultivars in Germany and four of the top 10 through our third-party distribution partners1.
1. Based on Company estimates and rankings compiled by German outlet Flowzz
Netherlands Cannabis
Operations in the Company’s Phase I facility in Drachten continue at full capacity, with continued strong profitability and operating cash flow generation;
The Company's products are now represented in 91% of participating coffeeshops, representing increased market penetration sequentially from that of the third quarter;
The Company continued to advance new product innovation in the Netherlands market and, subsequent to year end, launched 10 new product offerings, including the first regulated blunt in market, as well as infused spliffs, and other pre-roll formats, in the Netherlands. We expect to continue to launch new and innovative products in 2026; and Construction of the Company’s Phase II facility in Groningen is nearing completion with the facility expected to be operational in the second quarter of 2026. When fully operational, the Phase II facility is expected to quintuple total annualized production to approximately 10,000 kilograms.
The Company believes we are poised to benefit from President Trump's Executive Order to reschedule marijuana, which, if enacted, would represent a consequential step in modernizing U.S. cannabis policy and support the development of a regulatory framework more aligned with international drug policies.
The Company's application for a Texas medicinal marijuana license remains under review by the Department of Public Services ("DPS"). In December 2025, nine new provisional licenses were awarded, of which we were not a recipient, however, DPS is required to award a minimum of three new awards on or before April 1, 2026. If awarded a license, the Company plans to work with its listing authority to structure an acceptable ownership structure and comply with all applicable regulatory requirements, which are still pending in Texas.
Brian Stevenson was appointed to the newly created role of Global Chief Strategy Officer, in which he is leading our enterprise-wide strategic agenda, including long-term growth strategy, global market assessment, and integration initiatives across regions and business units.
What changed in the latest 10-Q
Risk Factors
Our business, operations, and financial condition are subject to various risks and uncertainties. The risk factors described in Part I, Item 1A, “Risk Factors” contained in our Annual Report on Form 10-K, as filed with the SEC on March 12, 2026, should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q and in our other filings filed with the SEC in connection with evaluating us, our business, and the forward-looking statements contained in this Quarterly Report on Form 10-Q.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Income Before Taxes and Equity Method Investment Income”
New heading “Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025”
New heading “Selling, General and Administrative Expenses”
New heading “Interest Expense”
New heading “Interest Income”
New heading “Other (Expense) Income”
New heading “Income (Loss) from Discontinued Operations, Net of Tax”
New heading “Net Income Attributable to Village Farms International, Inc. Shareholders”
New heading “Adjusted EBITDA from Continuing Operations”
Largest changes
“Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025”see in full comparison
“Net Income Attributable to Village Farms International, Inc. Shareholders”see in full comparison
Full comparison: every changed paragraph (102)
Village Farms International, Inc. (“VFF”, together with its subsidiaries, the “Company”, “Village Farms”, “we”, “us” or “our”) is a corporation existing under the Business Corporations Act (Ontario). The Company’s principal operating subsidiaries are Pure Sunfarms Corp. (“Pure Sunfarms” or “PSF”), Balanced Health Botanicals, LLC (“Balanced Health”), Rose LifeScience Inc. (“Rose LifeScience” or “Rose”), Village Farms International B.V. (“VFN”), Village Farms Canada Limited Partnership (“VFCLP”), Village Farms L.P. (“VFLP”), and VF Clean Energy, Inc. (“VFCE”).
In Canada, we converted two large-scale, advanced greenhouse facilities to cannabis production to serve the Canadian legal adult use (recreational) market and international medical markets through exportation. Through our ownership of VFN, we hold one of ten licenses to cultivate and distribute cannabis legally in the Netherlands under that country’s Controlled Cannabis Supply Chain Experiment. In the U.S., Balanced Health is our industry-leading cannabinoid business, extendingextended our portfolio into cannabidiol (“CBD”) and hemp-derived consumer products, and the Company also owns 2.2 million square feet of advanced greenhouse facilities in Texas which may be converted to cannabis production in the future if and when permissible by all regulatory authorities.
We also cultivate tomatoes and market them through Village Farms Fresh (a VanguardVerdexa Holdings Company) under the Village Farms Fresh (“VF Fresh”) brand, which sells to mass retail grocery stores and food distribution companies.
During the first quarter of 2026, the Company realigned ourits structure toward a unified cannabis operating model, including changes and additions to our leadership team, to gain operational efficiencies and better align our resources with customer and market opportunities. As a result of the reorganization, the Company revised its reportable segment structure to reflect how the Chief Executive Officer, as chief operating decision maker ("CODM"), manages the business, allocates resources, and assesses performance.
Pure Sunfarms is one of the single largest cannabis growing operations in the world, one of the lowest-cost greenhouse producersproducers, fully EU-GMP certified, and owns several of the leading flower brands in Canada.Canada and Germany. We leverage our 30 years of experience as a vertically integrated greenhouse grower for cannabis growth opportunities in Canada with commercial distribution in all Canadian provinces and territories. Our long-term objective for Canada is to be the leading low-cost, high-quality cannabis producer.
Maintained the Company’s top five overall market share position in the Canadian market and expanded its market share in vapes and infused pre-rolls, now positioning the Company’s brand portfolio among the top 10 nationally in all major product categories1.
Achieved record production from the Company’s Delta, British Columbia facilities during the first half of 2026. Increased yields and greater operating efficiencies led to lower production costs during Q2, and favorable sales mix helped drive nine percentage points of year-over-year cannabis segment gross margin expansion.
Surpassed the high end of its targeted gross margin range for cannabis of 30-40% for the fourth consecutive quarter; and recorded positive EPS from continuing operations for the fourth consecutive quarter.
Maintained a top five overall market share position in the Canadian market, and continued to hold the number one market share position in dried flower. The Company’s Pure Sunfarms brand expanded its market share position for the 15th consecutive month in April, reflecting improving consumer preference for the Company’s strains following recent introductions of packaging innovations that showcase the Company’s flower quality and aromas1.
International export sales from Canada increased 171%74% year-over-year and 43% sequentially to a record high of $14.6$20.9 million. The Company believes it remains the largest exporter of medical cannabis to Europe,Europe with three of the top fivea leading cultivarsmarket share position in Germany and four of the top 10 through our distribution partners2.Germany.
The Company recently completed facility upgrades at its 4.8 million square foot production campus in Delta, British Columbia, the Company now believes it operates the world’s largest EU-GMP certified cannabis facility.
Began planting the first half of its Delta 2 greenhouse expansion in Canada, which is expected to begin contributing to sales late in the second quarter of 2026. The full expansion is expected to yield an incremental 40 metric tonnes of annualized cannabis production, expanding Canadian capacity by approximately 33% once completed in 2027.
The Company expectscommenced to commence all operationscultivation at its Phase II facility in theGroningen, Netherlands during Q2Q2. andThe rampGroningen tofacility fullwill bring the Company’s maximum annualized production capacity byin the end of 2026. Once operating at full capacity, the Phase II facility is expected to quintuple total Netherlands production to approximately 10 metric tonnes annually.and is expected to ramp to full production into early 2027.
During Q2 the Company harvested its first crop from the first half of its Delta 2 greenhouse expansion, and announced that it is accelerating technology upgrades quicker than previously anticipated due to increasing global demand. The Delta 2 expansion is expected to yield approximately 15 metric tonnes of dried, trimmed flower during the second half of 2026. The Delta 2 expansion is expected to ramp to its full production capacity of 40 metric tonnes by mid-2027, bringing total production capacity from the Delta campus to approximately 160 metric tonnes of dried, trimmed flower annually.
2.
Based on Company estimates and rankings compiled by German outlet Flowzz.
On June 8, 2026, the Company closed a registered direct offering (the “Offering”) of 7,500,000 Common Shares at a price of US$2.00 per Common Share. The gross proceeds from the Offering were approximately US$15 million before deducting placement agent fees and other offering expenses payable by the Company. The proceeds from the Offering are being used for working capital and general corporate purposes.
On June 2, 2026, John R. McLernon stepped down from his position as Chairman of the Company's Board of Directors. Concurrently with Mr. McLernon’s resignation, the Board appointed Christopher Woodward as Chairman. Mr. McLernon continues to serve as a member of the Board of Directors.
On May 27, 2026 the Company was awarded “Producer of the Year” at the 2026 Business of Cannabis Awards in London. The award recognizes excellence and innovation in cannabis cultivation practices, techniques, and product quality, and celebrates cultivators who have demonstrated exceptional skill, dedication, and expertise in producing high-quality cannabis while adhering to best practices in sustainability, compliance, and safety.
Began a succession planning process for our Chief Financial Officer, Steve Ruffini, who will remain as CFO until a permanent replacement has been identified. Mr. Ruffini will remain an employee of the Company to help ensure a smooth transition of his CFO responsibilities, and he is expected to be appointed to a new leadership position focused on evaluating strategic M&A opportunities.
Favorably amended and extended its loan with its long-term lender, Farm Credit Canada (FCC). The Company improved the interest rate on the loan by 50 basis points and extended the maturity date by four years to February 3, 2031. The FCC loan carries a variable interest rate currently below 7.0%, with a current balance of US $15.4 million. All other material terms of the loan remain unchanged.
On April 23, 2026, President Trump issued an executive order to (1) immediately place both FDA-approved products containing marijuana and marijuana products regulated by a state medical marijuana license in Schedule III of the Controlled Substances Act, and (2) initiate an expedited administrative hearing process to consider the broader rescheduling of marijuana from Schedule I to Schedule III, which is expected to commence on June 29, 2026. We believe we are poised to benefit from President Trump's Executive Order, which, if the broader rescheduling is enacted as anticipated, would represent a consequential step in modernizing U.S. cannabis policy and support the development of a regulatory framework more aligned with international drug policies.
Our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 presented below reflect the operations of our consolidated wholly-owned subsidiaries and our 80% ownership interest in Rose LifeScience.LifeScience through May 21, 2026, and 86.6% ownership after May 21, 2026.
All currency amounts in this Quarterly Report are stated in U.S. dollars, which is our reporting currency, unless otherwise noted. All references to “dollars” or “$” are to U.S. dollars. The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of MarchJune 31,30, 2026, MarchJune 31,30, 2025, and December 31, 2025. Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates. The condensed consolidated statements of operations and comprehensive income (loss) and condensed consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the reporting period.
During the first quarter of 2026, the Company revised its reportable segment structure - Cannabis - to reflect how the CODM manages the business, allocates resources, and assesses performance. The Company's operations are now organized, managed, and classified into one reportable segment - Cannabis.
Segment reporting is prepared on the same basis that the Company’s Chief Executive Officer, who is the CODM, manages the business, makes operating decisions and assesses performance. The Cannabis segment, which is comprised of the previously reported Canadian Cannabis, U. S.U.S. Cannabis, and Cannabis - Netherlands segments, produces and supplies cannabis and CBD-based health and wellness products to be sold to consumers via provincial governments, coffee shops, licensed providers, and direct to consumers in the United States.
Adjusted EBITDA from continuing operations is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA from continuing operations may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA from continuing operations is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. Adjusted EBITDA from continuing operations includes the Company’s 80% interest in Rose LifeScience.LifeScience through May 21, 2026, and our 86.6% interest in Rose LifeScience after May 21, 2026.
We caution that our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 may not be indicative of our future performance.
Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025
Sales for the three months ended MarchJune 31,30, 2026 and 2025 were as follows:
Canadian Branded revenues are shown net of excise tax on products. Excise tax on products was $15,903$14,909 and $13,947$14,812 for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
The increase in consolidated revenues of $10,558,$4,078, or 27%,7%, was primarily due to an increase in International Exports of $9,183,$8,917, or 171%,74%, driven by continued growth in export volumes to Germany, partially offset by a decrease in the net average selling price of 12%16% due to a shift in product mix in favor of bulk flower over packaged flower. For the three months ended MarchJune 31,30, 2026, International Export sales represented 29%33% of revenue, compared with 14%20% of revenue for the three months ended MarchJune 31,30, 2025.
Canadian Branded Sales increaseddecreased by $1,087,$1,945, or 5%,8%, to $23,848,$23,017, or 47%36% of sales, from $22,761,$24,962, or 57%42% of sales, primarily due to ana increasedecrease in volume of value brands, while the average net selling price remainedincreased in5% line withover the prior period.
Netherlands Branded sales increased by $2,177 over the prior year, as the prior year only had one month of sales.
CanadianNetherlands Non-BrandedBranded sales decreasedincreased by $902,$862 orover 14%,the prior year, due to aan decreaseincrease in volume.
Canadian Non-Branded sales decreased by $4,037, or 57%, due to a shift in volume towards International Exports.
Sales for U. S.U.S. Cannabis decreased by $771,$617, or 20%,16%, due to lower direct-to-consumer sales resulting from the proliferation of unregulated hemp-derived products on the market and the continuing effect of changes in state regulations restricting sales.
We continue to pay a burdensome excise tax on our Canadian Branded sales (sales to provincial distributors). For the three months ended MarchJune 31,30, 2026, the Company incurred excise duties of $15,903,$14,909, or 40%39% of gross Canadian Branded sales, compared with $13,947,$14,812, or 38%37% of gross Canadian Branded sales, for the three months ended MarchJune 31,30, 2025. The increase of $1,961, or 14%, was due to an increase in kilograms sold in the Canadian Branded channel. The Canadian excise duty is our single largest cost of participating in the branded adult-use market in Canada.
Cost of sales for the three months ended MarchJune 31,30, 2026 were $29,252$34,004 compared with $25,501$37,557 for the three months ended MarchJune 31,30, 2025. The increasedecrease of $3,751,$3,553, or 15%,9%, was primarily due to aimproved 27%yields increase in sales, partially offset byand a favorable shift in sales mix towards bulk flower, from packaged flower, within our International Export sales mix in favor of bulk flower,sales, which has a lower average cost per gram over other packaged products.
Gross profit for the three months ended MarchJune 31,30, 2026 was $20,986$29,973, or a 47% gross margin, compared with $14,179$22,342, or a 37% gross margin, for the three months ended MarchJune 31,30, 2025. The increase in gross margin of $6,807,10 orpercentage 48%,points, was primarily due to higher sales volumes of International Exports as well as lower sales of value brands within the branded sales category.
Selling, general and administrative expenses for the three months ended MarchJune 31,30, 2026 were $15,942$18,811 (32%29% of sales) compared with $14,619$15,411 (37%26% of sales) for the three months ended MarchJune 31,30, 2025.
Interest expense for the three months ended MarchJune 31,30, 2026 was $523$477 compared with $701$814 for the three months ended MarchJune 31,30, 2025 due to a decrease in the average debt balance and a decrease in interest rates from the prior year.
Interest income for the three months ended MarchJune 31,30, 2026 and was $608$343 compared with $75$109 for the three months ended MarchJune 31,30, 2025 due primarily to an increase in the average cash, cash equivalents, and restricted cash.
Other (Loss) Income
Other income for the three months ended March 31, 2026 was $173 compared with other loss of $22 for the three months ended March 31, 2025.
IncomeOther before taxesincome for the three months ended MarchJune 31,30, 2026 was $4,397$24 compared withto a loss before taxes of $1,128$4,430 for the three months ended MarchJune 31,30, 2025. TheOther changeincome offor $5,525the wasthree primarilymonths dueended June 30, 2025 included a favorable vendor settlement relating to the improvedpartial grossrecovery profit.of prior period operational losses from the ToBRFV infestation.
Income Before Taxes and Equity Method Investment Income
Income before taxes for the three months ended June 30, 2026 was $10,455 compared with $12,448 for the three months ended June 30, 2025. The decrease of $1,993 was primarily due to the favorable vendor settlement in 2025, offset by the improved gross profit for the three months ended June 30, 2026.
Net Income (Loss) Attributable to Village Farms International, Inc. Shareholders
Net income attributable to Village Farms International, Inc. shareholders for the three months ended MarchJune 31,30, 2026 was $2,917$7,145 compared with a net loss of $6,703$26,497 for the three months ended MarchJune 31,30, 2025. The increasedecrease of $9,620$19,352 was primarily due to $16,294 from discontinued operations resulting from the sale of the Texas greenhouses and a favorable vendor settlement in 2025. This was partially offset by higher sales and thean improved gross margin during the three months ended MarchJune 31,30, 2026, as well as the negative impact of the loss from discontinued operations in 2025 of $5,004, partially offset by an increase in the provision for income taxes of $1,360.2026.
Adjusted EBITDA from Continuing Operations for the three months ended MarchJune 31,30, 2026 was $9,890$15,411 compared with $4,546$17,111 for the three months ended MarchJune 31,30, 2025. The increasedecrease of $5,344,$1,700, or 118%,10%, was driven primarily by the favorable vendor settlement in 2025, partially offset by higher sales and higher margins induring Cannabis.the three months ended June 30, 2026. For additional information, refer to the reconciliation of Adjusted EBITDA from Continuing Operations to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Sales for the six months ended June 30, 2026 and 2025 were as follows:
Canadian Branded revenues are shown net of excise tax on products. Excise tax on products was $30,812 and $28,759 for the six months ended June 30, 2026 and 2025, respectively.
The increase in consolidated revenues of $14,636, or 15%, was primarily due to an increase in International Exports of $18,110, or 104%, driven by continued growth in export volumes to Germany, partially offset by a decrease in the net average selling price of 15% due to a shift in product mix in favor of bulk flower over packaged flower. For the six months ended June 30, 2026, International Export sales represented 31% of revenue, compared with 17% of revenue for the six months ended June 30, 2025.
Canadian Branded Sales decreased by $848, or 2%, to $46,865, or 41% of sales, from $47,713, or 48% of sales, primarily due to a decrease in volume of value brands, while the average net selling price remained in line with the prior period.
Netherlands Branded sales increased by $3,039 over the prior year period, as the prior year only had four months of sales.
Canadian Non-Branded sales decreased by $4,950, or 37%, due to a shift in volume to International Exports.
Sales for U.S. Cannabis decreased by $1,388, or 18%, due to lower direct-to-consumer sales resulting from the proliferation of unregulated hemp-derived products on the market and the continuing effect of changes in state regulations restricting sales.
We continue to pay a burdensome excise tax on our Canadian Branded sales (sales to provincial distributors). For the six months ended June 30, 2026, the Company incurred excise duties of $30,812, or 40% of gross Canadian Branded sales, compared with $28,759, or 38% of gross Canadian Branded sales, for the six months ended June 30, 2025. The increase of $2,053, or 7%, was due to an increase in Cannabis 2.0 products sold in the Canadian Branded channel, which have a higher proportional excise tax. The Canadian excise duty is our single largest cost of participating in the branded adult-use market in Canada.
VFF insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 3 Form 4 filings (2 insiders, 3 trade dates, 85,000 shares, about $207.1K) and open-market sales in 0 filings. Net open-market shares: 85,000 (purchases minus sales); net value about $207.1K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-22 | Woodward Christopher C. |
Open-market purchase | 10,000 | $3.06 | $30.6K |
| 2026-09-22 | Degiglio Michael A |
Open-market purchase | 35,000 | $2.89 | $101.2K |
| 2026-08-21 | Bovenschen Orville |
Grant/award | 30,000 | — | — |
| 2026-08-21 | Bovenschen Orville |
Shares withheld for tax | 7,500 | $2.57 | $19.3K |
| 2026-07-09 | Woodward Christopher C. |
Shares withheld for tax | 15,151 | $1.99 | $30.2K |
| 2026-07-09 | Woodward Christopher C. |
Option exercise | 75,757 | — | — |
| 2026-07-09 | Mclernon John R. |
Shares withheld for tax | 15,151 | $1.99 | $30.2K |
| 2026-07-09 | Mclernon John R. |
Option exercise | 75,757 | — | — |
| 2026-07-09 | Mahoney Kathleen M |
Option exercise | 75,757 | — | — |
| 2026-07-09 | Henry John Patrick |
Option exercise | 75,757 | — | — |
| 2026-07-09 | Hauger Carolyn |
Option exercise | 75,757 | — | — |
| 2026-07-09 | Holewinski David |
Option exercise | 75,757 | — | — |
| 2026-06-29 | Degiglio Michael A |
Open-market purchase | 13,600 | $1.87 | $25.4K |
| 2026-06-26 | Degiglio Michael A |
Open-market purchase | 26,400 | $1.89 | $49.9K |
| 2026-06-15 | Degiglio Michael A |
Option exercise | 33,334 | $1.08 | $36.0K |
Well-known investors holding VFF (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 6,583,786 | $13.2M | 0.01% | Added 481% |
| Two Sigma Investments | 2026-06-30 | 2,423,572 | $4.8M | 0.0% | Added 23% |
| Renaissance Technologies | 2026-06-30 | 1,604,766 | $3.2M | 0.0% | Added 22% |
| Millennium Management (Israel Englander) | 2026-06-30 | 678,931 | $1.4M | 0.0% | Added 57% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 51,641 | $103.3K | 0.0% | Reduced 65% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 26,635 | $53.3K | 0.0% | Reduced 22% |