💸 The Tape

Village Farms International (NASDAQ: VFF) reported second-quarter consolidated net sales of $64 million, up 27% sequentially and 7% year-over-year, with net income of $7.1 million, or $0.06 per share, and operating cash flow of $8.9 million.

Read that again against the week we just had. Green Thumb's operating income fell by half. Verano's fell 88%. Curaleaf's EBITDA margin contracted while gross margin expanded. Village Farms just delivered its fifth consecutive quarter of positive net income and EPS — and the profitable part is the international business nobody in the US owns a piece of.

The margin story is real, not accounting

Cannabis net sales reached a record $53.5 million, up 5%. But gross margin jumped to 51% from 42% — nine full percentage points of expansion — driven by record Delta yields, greater operating efficiencies and favorable sales mix.

That flowed straight through. Cannabis segment adjusted EBITDA from continuing operations rose 16% to $15.3 million, or 28.5% of sales, from 25.8%. Segment net income improved 21% to $8.6 million.

Michael DeGiglio was careful to flag the comparison honestly: excluding a one-time $4.3 million vendor settlement received in Q2 last year, consolidated adjusted EBITDA rose meaningfully to $15.4 million. Disclosing the item that makes your growth rate look worse is not standard practice in this sector, and it's worth noting.

Export is the whole thesis

Here's the number that should reorganize how US operators think about this company. International export sales hit a record $20.9 million, up 74% year-over-year and 43% sequentially.

Village Farms believes it remains the largest exporter of medical cannabis to Europe, with leading market share in Germany, operating what it describes as the world's largest EU-GMP certified cannabis facility. International markets now approach 50% of revenues.

Compare the field. SNDL's international sales were C$5.0 million last quarter — and it just completed an EU-GMP audit at Atholville hoping to get where Village Farms already is. Aurora grew international medical 17%. Tilray's international medical grew 34% for the full year and is the healthiest thing in that company. Curaleaf's international segment grew 26% to $51.4 million and required buying out Four20 Pharma to consolidate.

Village Farms grew exports 74%. In a sector where every domestic market is compressing, that is the only genuinely scarce capability going.

The capacity pipeline

Two expansions are nearly funded and mostly built — which matters enormously for an acquirer.

Delta 2 harvested its first crop in Q2, with technology upgrades accelerating ahead of schedule on global demand. It should yield roughly 15 metric tonnes in the back half of 2026 and ramp to a full 40 tonne run rate by mid-2027, bringing total Delta campus capacity to approximately 160 metric tonnes of dried, trimmed flower annually.

Groningen, Netherlands commenced Phase II cultivation in Q2, taking Dutch capacity to about 10 metric tonnes, ramping to full production into early 2027.

Management states expansion capex in both jurisdictions is nearly complete. The company closed with $73 million in cash and expects to grow that balance from operating cash flow through year-end. A $15 million registered direct offering to two US institutional investors closed June 5 at 7.5 million shares.

Canadian brand performance is quietly strong too: top five overall market share, and for the first time, top 10 in all major categories nationally, with growth in vapes and infused pre-rolls. Plus "Producer of the Year" at the 2026 Business of Cannabis Awards in London.

Why a Tier 1 MSO should be looking hard

Now the interesting part. Every large US operator spent this quarter demonstrating the same three weaknesses. Village Farms addresses all three.

One: it's the missing international leg. Acquiring Village Farms would hand an MSO 160 tonnes of Delta capacity, 10 tonnes of Dutch production, EU-GMP certification at scale, and an established German distribution position — instantly, rather than through a three-year audit-and-registration grind. DeGiglio's framing is telling: the company is positioned for profitable growth regardless of its entry point and timing into the US market. That reads like a man who knows what he's holding.

Two: it's accretive on margin, not just revenue. This is the crux. An MSO buying another MSO buys more of the same problem — negative comps, price compression, 45% gross margins. Village Farms carries 51% cannabis gross margin and 28.5% segment EBITDA margin, both expanding. Bolting that onto Green Thumb's 45% gross margin, or Verano's 46%, lifts blended margin rather than diluting it. In a sector where the marginal acquisition usually makes the acquirer's ratios worse, that's rare.

Three: it's cash-generative and nearly capex-complete. $8.9 million of operating cash flow, $73 million of cash, and the heavy build spending behind it. An acquirer inherits the ramp, not the construction bill — 15 tonnes landing in 2H'26 and a path to 40 by mid-2027 that someone else already paid for.

The strategic logic gets sharper with rescheduling. Interstate commerce and export are the two doors opening next, and neither rewards more US dispensaries. They reward low-cost, GMP-certified, tonnage-scale production. Cresco, Curaleaf, Verano and LEEF have all now filed DEA registration applications — everyone can see the same door. Village Farms is the only North American operator already selling through it at $20.9 million a quarter.

DeGiglio explicitly says the company is evaluating acquisitions itself while remaining prudent and patient with respect to valuation — the posture of a buyer, not a seller.

The read

Record exports, nine points of margin expansion, five straight profitable quarters, $73 million of cash, and 200 tonnes of capacity coming online through mid-2027.

Every US operator spent this earnings season explaining why domestic retail is hard and international medical is where the margin lives. Village Farms is the company that already built it.

📈 Dog Walkers

$NLCP ( ▼ 0.19% ) Q2 Earnings

NewLake Capital Partners (OTCQX: NLCP) reported Q2 revenue of $12.1 million and led with the number that matters most for a cannabis landlord right now: 100% collection of contractual rent.

CEO Anthony Coniglio framed the quarter as consistent with expectations, and it was — sequentially, at least. Revenue slipped 1.8% from $12.3 million, but net income rose 2.1% to $5.9 million ($0.29/share), FFO rose 1.2% to $9.9 million ($0.47), and AFFO rose 1.7% to $10.3 million ($0.49).

The year-over-year picture is less flattering. Revenue fell 6.5% from $12.9 million, net income down 19%, and AFFO down 10.4% — driven by lost rental income from three properties that became available for lease during 2025, plus carrying costs on those vacancies. Partially offsetting: contractual escalations and a full quarter from two Ohio dispensaries acquired last year.

Vacancy, not default, is the problem. That's an important distinction — and it's what separates NewLake from IIPR, which reported security deposits being applied toward rent and defaulted-tenant payments collapsing from $3.5 million to $481,000 across two quarters.

The Cannabist question

NewLake leases four properties to The Cannabist Company — two in Illinois, two in Massachusetts — a tenant that entered CCAA restructuring in Canada and received Chapter 15 recognition in Delaware in May.

And yet: full rent collected on all four properties, tenant current on all contractual obligations, with $481,600 in aggregate security deposits held. Meanwhile Vireo Growth has agreed to acquire certain Cannabist operations across five states, including Illinois and Massachusetts.

That's arguably the most consequential item in the release. A restructuring tenant paying in full, with a well-capitalized acquirer circling the exact assets NewLake's leases sit under. If Vireo closes, NewLake potentially trades a distressed tenant for a stronger one without ever missing a rent check.

The balance sheet is the moat

$25.8 million cash, $433.2 million of gross real estate assets, and just $7.6 million drawn on a $90.0 million revolver. That's 1.6% debt-to-total-gross-assets and roughly 0.2x debt-to-EBITDA.

There is no more conservative balance sheet in cannabis real estate. Possibly in cannabis.

Post-quarter, NewLake amended the revolver: maturity extended two years to May 2029, and pricing improved from Prime plus 1.0% to Prime — cutting the rate from 7.75%. It also bought a Kentucky dispensary for roughly $0.6 million, committing $1.6 million for improvements, simultaneously leased to an existing tenant.

The $0.43 quarterly dividend — $1.72 annualized — represents an 88% AFFO payout ratio. Covered, but with the AFFO decline, not comfortably so.

Small, clean, fully collected, and cheaper capital than it had last quarter. In this sector, boring is THE competitive advantage.

$GTBIF ( ▼ 0.29% ) Expands In Florida

Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) opens RISE Dispensary Port Charlotte today at 1931 Tamiami Trail, bringing the company to 23 Florida locations and extending its reach into Southwest Florida. Hours run 9 a.m. to 8 p.m. Monday through Saturday and 11 a.m. to 6 p.m. Sundays, with a grand opening event September 5.

The shelf is the full house portfolio — RYTHM premium flower, vapes and concentrates, Dogwalkers pre-rolls, Good Green and &Shine flower, and Doctor Solomon's tinctures and topicals — supplied from Green Thumb's own production facilities in Ocala and Homestead. Per RISE tradition, first-day profits go to The Grateful Veteran, a nonprofit supporting veterans and first responders.

President Anthony Georgiadis framed it around Florida's growing medical program and patient access, which is accurate as far as it goes.

The context is what makes this interesting. Green Thumb reported comparable sales down 1.1% across 103 stores last week, with all growth coming from new doors and new markets. Port Charlotte is that strategy in action — and Florida is the state where the licensed operator competes hardest against unregulated hemp THC, since the legislature adjourned in March without acting and the next session doesn't convene until January 2027.

Vertical supply from Ocala and Homestead protects the margin on every unit sold here. That matters more than usual right now.

Twenty-three doors in a medical-only state. Green Thumb is building the footprint Florida will need if adult-use ever arrives — and paying for it out of a business currently comping negative.

📺 Trade To Black

Dr. Oz Pushes to Protect Senior CBD Access | TDR Cannabis in 5

• Dr. Oz personally intervened on hemp. Reporting from Marijuana Moment shows the CMS Administrator urged senators to delay the hemp-THC ban so seniors wouldn't lose CBD access while Medicare and Medicaid finalize coverage decisions.

• The ask was narrow, and that's the point. Oz's letter wasn't about gummies, drinks or vapes — it was specifically about protecting CBD for seniors using it for pain, sleep, inflammation and mobility while the federal CBD Pilot Program works through Medicare coverage.

• Washington moved his direction. The Senate's funding bill pushes the hemp-THC ban to December 11, aligning with exactly what Oz requested — and confirming the CBD Pilot Program is still active and still a federal priority after months of silence.

• The GOP split is widening. Shadd Dales walks through the two camps — one wanting the ban enforced immediately, the other pushing for a real regulatory framework — and how a healthcare angle now complicates a debate that was already getting more contentious by the week.