Key Takeaways
- Village Farms International reported Q1 2026 cannabis net sales of $49.7 million, up 27% year-over-year, with Adjusted EBITDA from continuing operations growing 118% to $10.2 million, representing 20.5% of sales and marking a fourth consecutive quarter of positive net income.
- International export sales reached a record high of $14.6 million, up 171% year-over-year, driven by strong demand for EU-GMP compliant products in Germany, where Village Farms holds three of the top five leading cultivars and four of the top ten through its distribution partners.
- The Company's Pure Sunfarms brand extended its dried flower market share gains to 15 consecutive months, maintaining a top five overall position in Canada and the number one position in dried flower, supported by recent packaging innovations.
- Village Farms believes it now operates the world's largest EU-GMP certified cannabis facility following recent upgrades at its 4.8 million square foot production campus in Delta, British Columbia, with its Delta 2 greenhouse expansion expected to add 40 metric tonnes of annualised production by 2027.
- President Trump's April 23, 2026 executive order initiating the rescheduling of marijuana from Schedule I to Schedule III is viewed by Village Farms as a consequential step in modernising U.S. cannabis policy, with a broader administrative hearing process expected to commence June 29, 2026.
Village Farms International (NASDAQ: VFF) reported first-quarter 2026 financial results for the period ended March 31, 2026, with cannabis net sales rising 27% year-over-year to $49.7 million and Adjusted EBITDA from continuing operations growing 118% to $10.2 million. The company recorded positive net income for a fourth consecutive quarter, driven by record international export sales, continued margin strength in Canada, and accelerating growth in the Netherlands.
Village Farms Q1 2026 Financial Performance
Cannabis gross margin expanded to 43% from 39% in Q1 2025, surpassing the high end of the company's 30–40% target range for a fourth consecutive quarter. Net income from continuing operations improved 68% year-over-year to $4.8 million, from $2.8 million in the prior-year period. Cash flow used in operations was ($11.8) million, driven by US$15.0 million of Canadian income taxes paid in Q1 2026 related to the prior fiscal year's tax obligations. The company's operations are now organised into a single reportable segment — Cannabis — following a structural realignment toward a unified cannabis operating model completed in Q1 2026.
“Our first quarter results reflect a strong start to the year and continued momentum in our largest markets, with adjusted EBITDA growth of 118% year-over-year significantly outpacing revenue growth of 27%, driven by our international businesses and continued leadership in Canada,” said Michael DeGiglio, President and CEO of Village Farms International.
Canada: Market Share and Margin Leadership
Village Farms maintained a top five overall market share position in Canada and retained the number one position in dried flower. Pure Sunfarms expanded its market share for a 15th consecutive month in April 2026, supported by packaging innovations designed to showcase flower quality and aroma. The company continued shifting its Canadian business toward higher-margin product categories. The Delta 2 greenhouse expansion began planting during Q1, with the first half expected to contribute to sales in late Q2 2026. The full expansion is projected to add 40 metric tonnes of annualised cannabis production — a 33% increase in Canadian capacity — upon completion in 2027.
International: Record Export Sales and Netherlands Expansion
International export sales from Canada reached a record $14.6 million in Q1 2026, up 171% year-over-year. Village Farms states it believes 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 ten through its distribution partners. Netherlands sales increased 448% year-over-year. The company expects to commence all operations at its Phase II Netherlands facility in Q2 2026 and ramp to full capacity by year-end, at which point the facility is expected to quintuple total Netherlands production to approximately 10 metric tonnes annually.
“After making recent facility upgrades at our 4.8 million square foot production campus in British Columbia, we now believe we operate the world's largest EU-GMP certified cannabis facility. Our capacity expansion projects will begin contributing to stronger sales growth through the remainder of this year and into 2027,” DeGiglio said.
U.S. Rescheduling and Strategic Outlook For Village Farms International
On April 23, 2026, President Trump issued an executive order to immediately place FDA-approved marijuana products and state-licensed medical marijuana products in Schedule III of the Controlled Substances Act, and to initiate an expedited administrative hearing process to consider broader rescheduling from Schedule I to Schedule III, expected to commence June 29, 2026. Village Farms stated it believes it is positioned to benefit from this development, which it views as a consequential step in modernising U.S. cannabis policy. The company also noted it is pursuing strategic M&A opportunities in U.S. and international markets, while remaining disciplined with capital deployment. CFO Steve Ruffini has begun a succession planning process and will transition to a new role focused on evaluating strategic M&A opportunities.
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