Village Farms Increase Presence with Rose LifeScience Acquisition

The TDR Three Key Takeaways regarding Village Farms and Rose LifeScience:

  1. Village Farms increased its ownership of Quebec-based Rose LifeScience Inc.  by 10%.
  2. Village Farms leverages greenhouse expertise with Rose LifeScience partnership.
  3. Village Farms was highlighted on TDR Small Cap Sunday two weeks ago.

Village Farms International (NASDAQ: VFF) yesterday announced it has increased its ownership of Quebec-based Rose LifeScience Inc. by 10% to hold an 80% interest. Michael DeGiglio, President and Chief Executive Officer, the company shared his view on the increased ownership: “the companys’ initial 70% acquisition of Rose stands out as one of the most complementary business combinations to date in the Canadian cannabis industry. Since late 2021, the combination of the experienced teams at Rose and Pure Sunfarms have driven Village Farms into the number two share rank nationally as Rose sales grew more than 300% to reach the number two share rank in Quebec, with each closing the gap to number one.”

This investment aligns with the companys’ strategy to leverage its extensive experience in large-scale, low-cost greenhouse operations to grown within the cannabis industry. By increasing its stake, Village Farms aims to capitalize on Rose LifeScience’s market position and operational strengths. “We have the opportunity to further grow our business as part of Village Farms, while continuing to focus on and support our home market in Quebec,” added Davide Zaffino, co-founder, President and Chief Executive Officer, Rose.

On a related note, we previously spotlighted Village Farms on Small Cap Sunday, highlighting its potential as a promising investment. The company reported an earnings report, with net sales increasing by 49% for Q1 2024 to $37.4 million, up from $25.1 million in the previous quarter. Combined sales, including both produce and cannabis products, rose 21% year-over-year to $78.1 million. The company’s three-year compound growth rate stands at 18.9%, indicating consistent revenue growth.

The shift from produce to cannabis is strategic, aiming for higher gross margins. The combined company’s gross margin is 18.6%, but the cannabis segment of their business is 32%, showing the higher gross profit margins in cannabis. This transition enhances profitability and aligns the company with the growing cannabis industry.

Village Farms’ strategic partnerships aimed at optimizing production, distribution, and market penetration. With the cannabis market expected to expand significantly, the companys’ proactive steps position it well to capture a substantial market share.

For investors, this step signals Village Farms’ strong growth strategy and commitment to maximizing shareholder value through strategic acquisitions and market expansion. Want to be updated on all things Psychedelic, Cannabis, AI, and Crypto? Subscribe to our Daily Baked in Newsletter!

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