Village Farms' Q1 2025: Unpacking Key Contradictions in International Strategy and Pricing Dynamics

International sales strategy and focus, international expansion and market focus, pricing strategy and margin structure, Village Farms' strategic focus and M&A activity, pricing trends and market dynamics are the key contradictions discussed in Village Farms International's latest 2025Q1 earnings call.



Cannabis Business Growth and Strategy:
- Village Farms reported CAD50 million in Canadian cannabis net sales, with a 285% increase in international medicinal exports year-over-year.
- The focus on higher margin sales and international expansion, including the entry into the New Zealand market, contributed to this growth.

Fresh Produce Transaction and Asset Monetization:
- The company signed a definitive agreement to monetize a third of its greenhouse assets, receiving $40 million in cash proceeds.
- This transaction aims to improve the upside potential for the produce business and focus resources on the cannabis segment.

Financial Performance and Cash Flow:
- Consolidated revenue was $77 million, roughly in line with the prior year, while adjusted EBITDA was $81,000, remaining flat year-over-year.
- Despite seasonality impacting the fresh produce segment, positive cash flow from operations was maintained.

Netherlands Expansion and Market Positioning:
- Village Farms reported $485,000 in sales from its Leli Holland operations in the Netherlands in Q1, with an adjusted EBITDA margin of 15.8%.
- The expansion into the Dutch market, driven by more favorable margin profiles and strong market demand, is expected to yield significant growth in 2026.