Village Farms Q3 2026: Cannabis Sales Hit Record $55M

Village Farms International reported third-quarter 2026 net sales of $66.9 million and a record $55.0 million in cannabis revenue, the company announced on November 9, 2026. Net income attributable to shareholders was $10.0 million, or $0.08 per share, on operating cash flow of $9.5 million. Adjusted EBITDA from continuing operations came in at $18.2 million, equal to 27% of sales. The Nasdaq-listed producer closed the quarter with roughly $80 million in cash and a net cash position of $41 million.

Context — Why Village Farms' Margin Slide Matters Now

The headline revenue number masks a compression story. Cannabis gross margin fell to 48% from 55% a year earlier, and cannabis segment net income dropped to $7.8 million from $12.0 million. Village Farms attributed both declines to a softer spot trim market in the Canadian wholesale channel.

That is the same channel the company says has now troughed. Chief executive Michael DeGiglio told investors that wholesale trim volumes and pricing "reached trough levels" during the quarter, and that October order-book visibility plus new supply agreements at stronger contracted pricing should normalize conditions in the fourth quarter.

The setup matters because Village Farms is not a pure Canadian operator. International exports reached $20.8 million, up 75% year over year and flat against the prior quarter's record. Roughly 43% of cannabis sales now come from outside Canada, the company said.

That geographic mix is the strategic bet. Village Farms runs what it describes as the world's largest single-site EU-GMP certified cannabis facility, in Delta, British Columbia. European medical buyers pay for compliant supply, and the company argues that certification is the durable advantage.

Against a backdrop where North American cannabis producers have generally struggled with price deflation in recreational flower, a 27% adjusted EBITDA margin on the cannabis segment is the number bulls are anchoring to. The bear case rests on whether trim pricing recovers on schedule or drags into 2027.

Data — What the Numbers Show

Total revenue was essentially flat, at $66.9 million versus $66.7 million a year earlier, because cannabis growth was offset by a decline in produce sales to $11.3 million from $12.8 million.

Metric	Q3 2026	Q3 2025	Change
Cannabis net sales	$55.0M	$53.5M	+3%
Cannabis gross margin	48%	55%	-13 pts
Cannabis adjusted EBITDA	$14.7M	$20.2M	-27%
Consolidated adjusted EBITDA	$18.2M	$20.7M	-12%
International exports	$20.8M	$11.9M	+75%

Through nine months, cannabis revenue rose 10% to $158.3 million, with international exports more than doubling to $56.2 million from $29.2 million. Canadian branded sales slipped to $72.2 million from $74.6 million, and Canadian non-branded revenue fell to $11.7 million from $20.7 million.

The margin damage is concentrated in that non-branded line, which is where wholesale trim sits. Selling, general and administrative costs rose 24% in the cannabis segment to $15.2 million, which the company tied to spending supporting future growth.

Analysis — Who Is Exposed to the Trim Recovery

Village Farms sits in a small group of licensed producers with genuine international distribution, which distinguishes its risk profile from peers dependent on Canadian retail alone. The company says it holds a top-five overall Canadian market share position and a top-10 position nationally in every major product category.

Its Super Toast brand became the company's first nationally distributed label after launching in Quebec. That is a modest but real signal that the branded portfolio is broadening beyond the flagship Pure Sunfarms Pink Kush strain.

The counter-argument is straightforward. Adjusted EBITDA from continuing operations fell 12% year over year, and cannabis operating cash flow dropped 65% to $7.3 million. If trim pricing does not recover as management expects, the margin gap versus the prior year persists regardless of export volume.

Investors are effectively underwriting two separate businesses. The Canadian wholesale channel is a cyclical, price-taking operation. The EU-GMP export business is a capacity-constrained franchise where demand exceeds compliant supply.

Positioning follows that split. Export growth and the Delta 2 expansion are the reasons long holders stay. The trim trough is the reason skeptics argue the current margin is not a floor. Neither side gets resolution until fourth-quarter wholesale pricing prints.

Outlook — What to Watch Next

The Delta 2 expansion in British Columbia is on track for completion in the first quarter of 2027, with a ramp to 40 metric tonnes by mid-2027. That would lift the Delta campus to roughly 160 metric tonnes of dried flower annually.

The Netherlands facility in Groningen is now fully planted and expected to reach maximum annualized capacity in early 2027, supporting stronger revenue growth next year. Management also flagged entry into multiple new European jurisdictions.

Village Farms said it has begun mobilizing its 30-acre Monahans, Texas greenhouse for cannabis production, though it gave no timeline and did not disclose terms or a regulatory pathway. It also exercised rights to convert 16 acres of its Delta 1 facility to cannabis during 2027, providing optionality without formalized conversion plans.

Watch Canadian wholesale trim pricing in the fourth-quarter print, the Delta 2 completion date, and any clarity on the pending December 11, 2026 federal hemp ban, which affects the Balanced Health Botanicals CBD unit.

Frequently Asked Questions

Why did Village Farms' cannabis margin drop in Q3 2026?

The company attributed the decline to a softer spot trim market in the Canadian wholesale sales channel compared with the prior year. Gross margin fell to 48% from 55%, and cannabis net income fell to $7.8 million from $12.0 million. Management said it believes trim volumes and pricing reached trough levels in the quarter and expects normalization in the fourth quarter based on October order-book visibility.

What does the Monahans, Texas plan mean for Village Farms?

Village Farms said it began mobilizing efforts to operationalize its standalone 30-acre greenhouse in Monahans for cannabis production, describing it as the youngest and most advanced asset in its portfolio. The company framed this as pursuing all potential pathways to U.S. market entry. It did not disclose a production timeline, capital cost, or the regulatory route it intends to use.

How much of Village Farms' cannabis business is international now?

International export sales reached $20.8 million in the third quarter, up 75% year over year and equal to the prior quarter's record. That represents roughly 43% of cannabis sales, according to the company. Through nine months, exports more than doubled to $56.2 million. Village Farms said it remains one of the largest exporters of medical cannabis to Europe with a leading share in Germany.

Bottom Line

Village Farms delivered record cannabis revenue and positive net income, but the 48% margin hinges on whether Canadian wholesale trim pricing normalizes as management expects.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.