Village Farms International, Inc. announced its financial results for the second quarter ended June 30, 2022. All figures are in U.S. dollars unless otherwise indicated.
“The continued successful execution of our differentiated Canadian Cannabis strategy drove strong year-over-year and sequential sales growth, achieving a new record high for the second quarter, as well as our 15th consecutive quarter of positive EBITDA for that business,” said Michael DeGiglio, Chief Executive Officer, Village Farms. “Our Pure Sunfarms brand maintained its number one market share position in dried flower in Canada*, while Rose LifeScience became a top-three licensed producer in Quebec, with an 8.5% market share**, in part driven by its Promenade brand in collaboration with Pure Sunfarms.”
“Importantly, our planned investments in our commercial capabilities, including sales support and marketing, strain development and other innovation, new brands and geographical expansion over the past 18 months to drive both near- and long-term growth are beginning to yield their intended results. We are also seeing the benefits of the evolution of our strategy for non-branded, with larger, more regular sales to a smaller number of repeat customers, which has been complemented by steady growth in exports, having recently completed our sixth shipment to Australia.”
“We continue to expect the second half of 2022 to trend favourably for our Canadian Cannabis business, as we launch new SKUs, including new strains, across our brands into a market that continues to exhibit robust growth. In addition, the roll out of the Original Fraser Valley Weed Co. brand will enable us to address a considerable portion of the Canadian market that we previously did not. We also expect to increasingly benefit from integrating Pure Sunfarms and Rose to realize the significant synergistic opportunities that can take Village Farms’ Canadian Cannabis business to the next level.”
- Consolidated sales increased 18% year-over-year to $82.9 million from $70.4 million;
- Consolidated net loss was ($36.6 million), or ($0.41) per share, which included $29.8 million of impairments to Balanced Health Botanicals’ goodwill and intangible assets, compared with ($4.5 million), or ($0.06) per share; and,
- Consolidated adjusted EBITDA was negative ($10.3 million) compared with positive adjusted EBITDA of $1.5 million.
- Total Cannabis segment net sales increased 44% year-over-year to $35.6 million, representing 43% of total Village Farms sales; and
- Total Cannabis segment adjusted EBITDA was $2.1 million, compared with $7.3 million.
Canadian Cannabis (Pure Sunfarms and Rose LifeScience) Financial Summary for the Three and Six Months Ended June 30, 2022 and June 30, 2021
Strategic Growth and Operational Highlights
- Pure Sunfarms’ maintained its number one brand position for dried flower in Canada and was the number five licensed producer in Canada (by dollar sales), and remained the top-selling brand of dried flower products in key markets of Ontario, Alberta and British Columbia, while continuing to lead publicly traded Canadian cannabis companies in profitability.
- Launched Pure Sunfarms branded products in Yukon, Northwest Territories, New Brunswick and Newfoundland and Labrador, extending Pure Sunfarms’ brand reach to ten provinces and territories representing 98 per cent of total legal cannabis sales in Canada.
- At the end of the second quarter, Pure Sunfarms began shipping products under its second brand, the Original Fraser Valley Weed Co. (“Fraser Valley”), which quickly sold out in its initial provincial market, British Columbia. Fraser Valley products appeal to the value segment of the market, targeting the frequent, price-conscious consumer with dependable and potent bulk flower.
- Rose expanded market share of its brands in Quebec to 8.5%, becoming the third best-selling licensed producer in that province**, supported by its strong portfolio, in particular the Promenade brand.
- Canadian Cannabis launched a total of 23 new SKUs (14 by Pure Sunfarms and nine by Rose LifeScience).
- Pure Sunfarms and NOYA Cannabis Inc. launched Cookies sun-grown flower in Ontario during the quarter (with Pure Sunfarms being the licensed producer of record).
About Village Farms International, Inc.
Village Farms leverages decades of experience as a large-scale, Controlled Environment Agriculture-based, vertically integrated supplier for high-value, high-growth plant-based Consumer Packaged Goods opportunities, with a strong foundation as a leading fresh produce supplier to grocery and large-format retailers throughout the US and Canada, and new high-growth opportunities in the cannabis and CBD categories in North America and selected markets internationally.