Village Farms International reported robust third-quarter results in its cannabis division, with Canada retail sales up 29% year-over-year. The company attributed this increase to expanded distribution in Ontario and Quebec, where new provincial listings added over 200 stores in the quarter. Higher-margin extract and vape products now represent 35% of unit sales, compared with 22% a year ago, driving segment gross margins to 38%.

Exports rose 758% year-over-year in Q3, as Village Farms secured new international distribution agreements across Europe and Latin America. Shipments to Germany and the United Kingdom contributed 60% of export volumes, while Latin America accounted for 25%. The launch of a 10,000-kilogram production line dedicated to cannabinoid isolates enabled these volume gains without a material increase in cultivation costs.

The reclassification of cultivation expenses under recent federal guidance is expected to improve taxable income calculations, unlocking an estimated $8 million in additional deductions for the full year. Combined with ongoing automation investments at Village Farms’ Delta, B.C. facility—slated to reduce labor costs by 15%—the company forecasts adjusted EBITDA margins to expand from 24% in Q3 to approximately 30% by fiscal year-end.