💸 The Tape

Village Farms International has spent six years methodically building what it believes is the most formidable cannabis production platform on the planet. The Q1 2026 results suggest that patience is paying off — handsomely.

The company reported consolidated net sales of $50.2 million, up 27% year-over-year, with net income of $2.9 million ($0.03 per share) and adjusted EBITDA from continuing operations of $9.9 million — a 118% increase that significantly outpaced revenue growth. That kind of operating leverage doesn't happen by accident. It happens when a company has built the infrastructure, secured the certifications, and positioned itself in the markets where demand is accelerating fastest.

The International Engine

The headline number that defines Village Farms' trajectory: international export sales grew 171% year-over-year to a record $14.6 million in Q1. That growth also represented a 60% sequential increase from Q4 2025 — meaning the international business isn't just growing, it's accelerating.

The primary driver is Germany, where Village Farms believes it remains the largest exporter of medical cannabis to Europe. The company holds three of the top five leading cultivars in the German market and four of the top 10 through its distribution partners. Pricing in Germany has remained stable, and management sees that dynamic holding "for the foreseeable future" — a meaningful statement in a market where some competitors have faced margin pressure from increasing supply.

What underpins that international dominance is infrastructure. Village Farms recently completed facility upgrades at its 4.8 million square foot production campus in Delta, British Columbia, which the company now believes is the world's largest EU-GMP certified cannabis facility. That certification isn't just a marketing claim — it's the prerequisite for accessing every major regulated medical cannabis market in Europe, and having it at this scale creates a production advantage that's exceptionally difficult to replicate.

The Netherlands operation is scaling rapidly as well, with sales increasing 448% year-over-year. The company's Phase II facility in the Netherlands is expected to commence full operations during Q2, with a ramp to full capacity by year-end. Once fully operational, the expansion will quintuple Netherlands production to approximately 10 metric tonnes annually — adding a significant European production node that complements the Canadian export business.

Canadian Strength Continues

Village Farms' Canadian business delivered 5% growth in retail branded sales — a modest number in isolation, but one that reflects continued market share gains in the categories that matter most.

The company maintained a top-five overall market share position in Canada and held the No. 1 position in dried flower — the largest product category in the country. The Pure Sunfarms brand expanded its market share for the 15th consecutive month through April, driven by new strain introductions and packaging innovations designed to showcase flower quality and aromas.

That sustained share expansion in dried flower is particularly notable because it's happening in Canada's most competitive and mature product segment. Holding the top position for over a year straight requires consistent cultivation quality, effective brand management, and the kind of supply chain reliability that comes from operating at scale.

The company is also expanding Canadian production capacity. Village Farms began planting the first half of its Delta 2 greenhouse expansion, which is expected to begin contributing to sales late in Q2. The full expansion will yield an incremental 40 metric tonnes of annualized cannabis production, expanding Canadian capacity by approximately 33% once completed in 2027. That additional volume will feed both domestic demand and the rapidly growing international export pipeline.

Margin Expansion Tells the Story

The financial narrative in Q1 isn't just about revenue growth — it's about the quality of that growth.

Cannabis gross margin expanded to 43%, up from 39% in Q1 2025 — marking the fourth consecutive quarter above the company's targeted 30-40% range. When a company consistently beats the high end of its own margin guidance, it signals that the business model is performing better than management initially projected.

Cannabis net income improved 68% to $4.8 million, and the segment generated adjusted EBITDA of $10.2 million at a 20.5% margin, up from $6.9 million and 17.5% a year ago. The improvement was driven by the shift toward higher-margin products, international sales mix, and the inherent operating leverage of Village Farms' greenhouse infrastructure.

At the consolidated level, the company posted its fourth consecutive quarter of positive EPS from continuing operations — a streak that demonstrates sustainable profitability rather than one-time gains.

Cash flow from operations was negative $11.8 million in Q1, but that figure was distorted by $15 million in Canadian income taxes paid during the quarter related to prior-year obligations. Excluding that timing impact, the underlying cash generation was positive — and management expects to grow its cash balance from operating cash flow through year-end even after absorbing $6.4 million in share repurchases and $9.2 million in capital expenditures during the quarter.

Looking Ahead

Village Farms has several catalysts building through the remainder of 2026. The Delta 2 expansion begins contributing sales in the coming weeks. The Netherlands Phase II facility ramps through the second half. International demand continues to accelerate across Europe. And the company's capacity investments position it to capture that demand without needing additional capital cycles.

On the M&A front, CEO Michael DeGiglio signaled that "attractive opportunities" are emerging in both U.S. and international markets, but emphasized that the company intends to be "prudent and patient" in pursuing them. Village Farms also began a CFO succession process, with current CFO Steve Ruffini transitioning to a new leadership role focused on evaluating strategic M&A — a clear signal that deal activity is on the agenda.

The U.S. rescheduling of medical cannabis to Schedule III adds another dimension. While Village Farms' primary operations are Canadian and European, DeGiglio noted that broader rescheduling — currently the subject of an expedited DEA hearing beginning June 29 — "would represent a consequential step in modernizing U.S. cannabis policy" and could open new market opportunities aligned with the company's pharmaceutical-grade production capabilities.

The Bottom Line

Village Farms' Q1 2026 is the kind of quarter that separates operators who built real infrastructure from those who chased headlines. 27% revenue growth. 118% EBITDA growth. 171% international sales growth. 43% gross margins. Four straight quarters of positive EPS. And a production platform that may genuinely be the largest EU-GMP certified cannabis facility in the world.

In an industry still searching for companies that can grow profitably at scale, Village Farms is quietly making one of the most compelling cases in cannabis. The platform is built. The demand is real. And the numbers are starting to reflect both.

📈 Dog Walkers

$CRON ( ▲ 8.27% ) Reports Q1

The company reported record Q1 2026 net revenue of $45.2 million, up 40% year-over-year, with record gross profit of $19.2 million and net income of $15.7 million — more than doubling the prior year's $7.7 million. Adjusted EBITDA surged 122% to $5.1 million. And sitting behind all of it: an industry-leading $822 million in cash.

The growth engine is increasingly international. Export sales grew 171% year-over-year, with Israel delivering its ninth consecutive quarter of record net revenue — up 53% — as the PEACE NATURALS® brand continues to hold the No. 1 position in the Israeli medical cannabis market. Revenue from international markets outside Israel grew 97%, reaching record levels as European demand accelerates.

In Canada, the Spinach® brand hit a major milestone, capturing the No. 1 market share position in vapes for the first time while maintaining its dominant No. 1 ranking in edibles with a 20.8% market share. Spinach holds 5.5% total national market share as the No. 2 brand in Canada overall.

Production capacity is expanding to match demand. The Cronos GrowCo expansion is fueling increased volume, and the company began planting its Delta 2 greenhouse in Canada. The pending acquisition of CanAdelaar — one of ten licensed producers in the Dutch recreational cannabis pilot — is expected to close in summer 2026, establishing a strategic European adult-use footprint.

Cronos also renewed its $50 million share repurchase program, having already bought back approximately 13.4 million shares for $33.5 million over the past year.

With $822 million in cash, accelerating international growth, and brand leadership across multiple categories, Cronos has both the momentum and the firepower to keep scaling.

$LEEEF ( ▲ 1.86% ) Closes Funding Round

In a cannabis capital markets environment where raising money often feels like pulling teeth, LEEF Brands just closed an oversubscribed financing — and management put their own money in alongside investors.

The company announced the final closing of its previously announced raise led by Mindset Capital, bringing total gross proceeds to approximately US$9.3 million across both tranches. The financing consisted of common share units issued at C$0.25 (each including one share and one warrant exercisable at C$0.30 for 24 months) and convertible preferred shares carrying a 15% annual dividend (10% cash, 5% paid-in-kind) with a conversion price of C$0.38 per share.

CEO Micah Anderson and CFO Kevin Wilson both participated personally in the round — a detail that carries weight when management is asking outside investors to take a position in a micro-cap cannabis company operating in California's notoriously difficult market.

The proceeds are earmarked primarily for expanding Salisbury Canyon Ranch, LEEF's flagship cultivation asset, to its full 180-acre permitted capacity by fall 2026. Once complete, the ranch is projected to be one of the largest licensed cannabis farms in the country, supplying the low-cost, clean biomass that has already driven LEEF's gross margins to 49% — a figure the company delivered in Q1 while operating in the most price-compressed wholesale market in the industry.

Additional funds will support extraction lab upgrades, inventory expansion, working capital, and strategic growth initiatives as the regulatory landscape continues to evolve — including LEEF's ongoing pursuit of DEA licensing for potential interstate and international opportunities.

Anderson called the oversubscribed round a reflection of "the quality of our assets, the execution of our team, and the long-term opportunity we see ahead." In today's cannabis fundraising climate, getting a round done at all is notable.

🗞️ The News

📺 Trade To Black

Recapped Village Farms ($VFF) Q1 2026 earnings. CEO Michael DeGiglio highlighted record international medical export sales surging 171% YoY to ~$15M (driving total revenue of $50.2M, EPS $0.03, cannabis net sales +27% to $49.7M, and adjusted EBITDA +118%), strong Netherlands/Germany growth, and facility upgrades making it the world's largest EU-GMP compliant site. The broadcast also covered deepening chaos in Texas TCUP (Compassionate Use Program) licensing and hemp regulations.