VFF - Earnings call transcript Q3 2024 | Village Farms International, Inc.

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Operator

Good morning, ladies and gentlemen. Welcome to Village Farms International's Third Quarter 2024 Financial Results Conference Call. This morning, Village Farms issued a news release reporting its financial results for the third quarter ended September 30, 2024. That news release, along with the company's financial statements are available on the company's website at villagefarms.com under the Investors heading. Please note that today's call is being broadcast live over the internet and will be archived for replay both by telephone and via the internet beginning approximately 1 hour following the completion of the call today. Details of how to access the replays are available in today's news release.

me during that part or conference let be statements of begin, call. today made after we remind forward-looking you may the Before the formal which providing assumptions statements, applied material our in Certain many were of are beyond control. these number SEC XX-Q forward-looking and to available MD&A XX, could results the regulators, these and assumptions, statements. A quarter materially company's summary These differ including ended and expressed those uncertainties actual risks in risks XX-K a various of are with will on securities September Form Canadian uncertainties for SEDAR+. of is December its filings the statements be or ended and which to from XXXX, XX, subject for year EDGAR that cause the XXXX, and implied contained the in underlying are turn call These no we law, of Village any such now as applicable Officer Executive and statements. I update revise Farms today's Michael undertake by required of International. except or the made would forward-looking over to statements to as DeGiglio, securities Chief obligation publicly to date like Please Mr. go ahead, DeGiglio.

Mike DeGiglio

that. morning, Controller; Thank Senior President, Financial thank do Lefever, bit little operator. Corporate today, I Operating coughing Gillin cold I Officer; so Good Smith, Ruffini, today. and are may Gibbons, some right. All us Ann you for I Chief Patti Officer; have a Chief and With me for Sam you, Corporate joining Steve Affairs. apologize Vice of a and

going. So let's get

market net of XX% year-over-year of sales $X.X and and geographies. Fresh and adjusted million Gross reflects Canadian $XX the factors continued QX as quarter as share delivered $X.X strong our as produce million following basis in points leading and to teams form softer brands, growth continue cannabis XXX third Our experienced improved million. produce EBITDA to positive anticipated respectively. from in increased and income X% nearly excel Fresh our solid which we fresh all across business, outperformance pricing we well margin

Produce expansion further achieving remain profitability areas, area work Continued the important along focus support execution of as with to in an Fresh sales towards our in these business our we partner business. of this sustained value

reminder, in of As as produce component permissible to value believe a maintain our critical marketer Fresh the top potential American Texas-based. ability it's cannabis and great rollout of a U.S., optionality a Nasdaq-permitted North in a strategy either a or we has

#X continued Germany, and with QX in our market X ranked the Australian flows, with year-to-date. According continued sales million German XX% U.K. customers. from turning to without adjusted all XX% again acquisitions also positive grew operations million. international Total our flow roughly were partners and outlet strains with $X.X year-over-year about increases once XX doubled cannabis. partners, currently to sales CAD CAD grew agreement growth in which cash net and cultivars to organically X.X excited of strains Now in medical and Canadian profitable our to a international through to and Branded of supply cannabis resale year-over-year in sales, million. We're one strong we German of EBITDA reception which sales continued our with reflect very

X first we're Canadian market #X continue channels. We #X in the revenue quarter. grew #X during the fastest-growing Canada the and then LP and share Quebec, flower We in to and market Ontario maintained most the market position share hold in populous #X sales share market maintained market share across share Village growth leadership achieved the provinces. and position for Farms third giving LP Canada's all over ever by in We year, that in experiencing past the have #X the X.X% Canada time

share by market to nationally improved last the our hold X.X% to as position We year. pre-rolls #X and also in compared in pre-rolls continue

flower milk X to a the nationally. #X our sells year, competitive fastest milk we've in ], last outstanding leader. Supertose very brand and well-entrenched third despite continues performance market #X. with its position brands in of from the pre-rolls all provinces [ remains currently improved category our Over the Supertose being growing

to trials to we bring our During access program, sales recently also initiative the access sorry, announced designed to BC release grower-led realize strains. began our exclusives I'm from -- limited third quarter, exclusive across

adjust We release coming that also cannabis in connoisseurs at appeal introduced strains initiative across offerings quarters. to as Columbia now British strain the driving our provinces And X batch small are trial revenues the to continue we other expanding are looking we in and this for many Canada. to product limited

has pleased introduced fourth that to we're give all quarter. this with success Canada. our I'm we Finally, KushKard myself, launch delight rates excellent this new achieve strains Corvette and customers X to initial of Early of market been optimism across we've solid continue a called that with became selling a new consumers strain that strain to strain top the the which strain formal [ guy Lambo, flow reception but us our a to and order during announce to similar our ], and innovate Neon could

planned We this and product QX of profitably be and execution to brand later And in some whitespace to But they QX able to for launches introductions us new infused also on under-indexed across pre-roll we're in identify vape grow exciting excited share product for teams categories opportunities and innovation market more the and opportunities. the to have where our next for brand we reflect stellar these share by now quarter. next continued year.

September, we during the the after SKUs, performance experiencing sales move of more third experienced Canadian improving X months back -- stable popular and products rather quarter. After the several of by business. of And half States, the and this believe business has want normalized discuss the from cannabis looking of forward began we'll stabilization United space unregulated the first to some on inventory business, We're to some declines category impacted discussions share during challenges international million in $X.X which cultivars, our resulted strong velocity I the to in the of sales most of began but of very sales invest our of delays the our to across lower impacted by back we still to before in QX performance this growth out-of-stock the third to slight quarter. team our early future. And a of year. starting I provide first next out-of-stock quarter, additional some -- we're begun Moving see signs Restocking cannabis quarter. in-stock in in approximately of these which in SKUs market the across milk levels estimate performance. We sales caused during We're U.S. in hemp-derived to initiatives. during the proliferation third be to board exposed

SKUs quarter, and prices During decision plan strategic the made on lower volume. be some sales second we to from over as more away we profitability as move raise a selective we higher to others prioritize profitability

have excise take would And We pricing resulted which pays. non-branded non-branded has industry XX%. The has quarter BXB those overcapacity, in by and gross accumulation strengthening in -- tax pressure had pricing we if inventory XX% impacts, unhealthy to has also the addition the were inventory. significant advantage to gross spec spec impacted Canadian on significant third Overall, chose industry market egregious in to cannabis the created of of that been margin Canadian the Canadian these executed sales. sell margins of in

Leli position continues Netherlands international attractive supply remains yesterday, with the increasing review -- update the a brings very got all in of that sales. We've time. encourage information the we've focusing capital the in and great our subsidiary an share where shops to as balance updated our driving you focus to not ton sheet Canada, a allocation our ROI year. We this new of additional by has more our reminder, the can a month And during internationally of of take which I Netherlands. We excise earlier, like of make tax our Delta our our the comparison dynamics. With the Holland at and some a number Netherlands to investment we that the of from to greenhouse our to given presentation quarter. which are in which contains ROI in opportunity today and on with cultivation X our allocation sales confirm challenges increase an established medicinal be But with to in XX the market information. recreational continued third and would -- opportunities, capacity customer decisions. great have Germany, subsidiary on high-quality flower on in we next cultivation #X announced our growing way, Canada, team coffee profitability markets we believe cannabis sales capital Netherlands. We position resources is quarter first the We more higher track X a business have last market that of Holland put a licenses Our to about higher during province to at supply from in We're various our selective channels we're tune to across which relationships, construction allocating sustaining October are me begun sorry, indoor on egregious investor for first I Leli market. mentioned the recent at Dutch our facility Drachten, website of Quebec I'm completed

this X that the legal of far. and as XX on product stronger much be market patterns clear believe generating a will maturity. We enable full Dutch at capita by there between investment and quality which per operations on population we our on this X.X at than EUR Some could more estimates profitability market to revenue and performance of billion us Canada in billion have jurisdiction to excise opportunity EUR consumption us strong based somewhere regulatory path favorable in is do fundamental comparable a indicate with million a annually no puts pricing, Leli tax returns

Steve? approximately revenues dried vertically margins XX coffee to will over We to next comments. Over review up of track facility I quarter the we per pricing put of call and closing help X,XXX to be the kilos That of our will EUR Steve look basis. as now would which dictates. highlights. I annualized approximately Drachten financials by Over ramping on to the summary million acquiring our third some approximately of improve us integrate demand of make have couple before we of EUR flower. anticipate the X, generate shops, would an concludes on time, to which turn gram capacity potential capacity quarters, full add to annualized my

Steve Ruffini

Produce. again, year, cannabis both loss Fresh year-over-year net $X.X consolidated last last Canadian top Fresh both up XX% share loss Produce. Consolidated with with year, and $X.X XX% EBITDA a Thanks, contributions from individually, Fresh Mike. now or to both million, the adjusted from from in sales $X.X positive results. cannabis with strong cannabis will and Starting narrowed per for Produce. Net positive $XX.X contributions million $X.XX with million segments Canadian with million grew growth Produce. I Total $XXX,XXX positive our notably to turn starting income and Canadian to was business from Fresh line QX

saw to $XX.X we QX both return pricing production a during partners. the million. expected, own volumes by Growth more sales year-over-year of As our higher normalized from quarter. XX% our and driven to increased that tomato was

year. for we expansion to note quarter to facilities You opportunistic were strong It as strong favorable to last EBITDA CAD yield volumes cost Canadian much drove tripled the that adjusted million. total sales, quarter retail that increases the these grew sales driven which be last branded up another around was with another another million. CAD XX% to QX net compared see X.X more up last and year-over-year, same from non-branded XX% up and $X.X positive XXX% Non-branded of continuing margin million can CAD QX cash quarter, is sales compared up positive sales year. I XX% continue for year. year. period gross last million Adjusted quarter EBITDA in the our will XX% the compared delivered cannabis own was to XX.X million. efficiencies impact pricing, also last in for sales, which of XX.X improved $X.X our our $XXX,XXX success here of branded and to year sales QX from operating of to versus of international by flow of Retail non-branded were sales. Together,

from in which As we margin in [ increased year the line Mike saw margin. down QX for QX XX%, last continued sales, last in international was gross lower QX up momentum due spec mentioned ] also Canadian Mike non-branded year. sales earlier, XXX% XX% our and from with which cannabis medical are were mentioned, to QX

our was year's as up of returning for improved us a Canadian from X% EBITDA for XX%. to QX XX%, which non-branded adjusted target XX%. SG&A down Excluding the QX XX%, expense year. $X.X QX to from sales, spec range up from million of of improved last for QX's gross QX to sales percentage XX%, cannabis was to margin XX% last

leaving paid in once XX impact the our the Before million, will I tax tax to sales. Total Canadian CAD brings highlight we of excise year-to-date XX total again retail million. which on pay egregious QX cannabis, excise CAD branded was

is and allocation heavily before, strategy our factors the I largest our expenditure cannabis As noted within capital business this decisions. have into single

Turning to our $X.X cannabis were of margin XX%. a business. sales with U.S. million QX gross

restricting several unregulated Our up by hemp states' to attempts products. hemp-based products, responsible intoxicating impacted QX to products were hemp-based our products in states GMP-produced the sales notably most deal as of proliferation natural synthetic caught additional moving are with

of to stabilized side the against headwinds to negative these growth and initiatives loss was while multiple new were improvements We and manage is was SKUs cost business reinvigorate the initiatives, include The flavor innovative sales continue QX. with progress formulas the over now Both negative profiles. QX and has $XXX,XXX turning which $XXX,XXX. EBITDA equation. adjusted we team to on net

Finally, Village going Clean energy a royalty profits from third Farms being received in $XXX,XXX we the Delta net RNG provide began quarter. operations healthy forward. income at our facility stream from the project of during and incremental now company This of with are April are for the payments partner, pleased Energy

QX quarter cash and debt February million. Total flows debt in Fresh cash of from $XX at positive million, QX flow. Produce operations $X.X cash generated working million with split and balance consolidated million, of second cash our We to operating was equally ended XXXX. XXXX the consecutive Turning of capital term end $XX.X of debt, cannabis May flows $XX.X We between sheet. and matures the due starting which of

multi-decade Last our a our coming and line -- confident longstanding believe $XX lenders was the the extended relationships to term will facilities are Produce, months. balance has facility. with XXXX date. top-performing extend $X for maturity cannabis have May are We agreement amended of a we lenders' and which quarter, we our We with million a current in we cannabis Fresh million revolving

Mike. credit, in call of also turn We with which We place comfortable back over XX cannabis CAD on. currently debt million. And a million remain have our line of is $XX.X the I level drawn net now not to will

Mike DeGiglio

in our our Thank with with in just are to fresh summarize, solid performance and you, business we Steve. our In pleased closing, results, very third our -- fresh continued improved business quarter execution cannabis strategy.

to momentum We continue international help business, in are building our and strong which should ability overall profitability positive improve generate to flow. us cash

Our reputation cultivars success flower consumers and our by international leading and Canada. on brands being sought based partners and increasingly is of the out in

Europe many opportunities continue jurisdictions the continue about commencement the very ROI year Leli the excited industry. I'd in high subsidiary was during only our rescheduling that a to of the be to expand United quarter first policymakers cannabis on Netherlands the of into as the close news are benefits from in proposed we producer regarding the for sales Village States. embrace next and to hearing the upcoming will Farms We selected new cannabis our like of to as of business the explore Holland recent international cannabis DEA's regulated in additional witness to the

CBDistillery lifetime. and the of including is on health of application important was and the some an brand, top-ranked wellness cannabinoid advocate our movements what the most assets U.S. attractive a As United one the us with most leading in for believe franchises, it global in our company to to greenhouse cannabis U.S. one we submit incumbent of States, in

all-time expertise trading in including in depth a at following and with broadly a deep lows. as it and the We for inclusion sector the realize in days Colorado. industry in of of experience much of States, breadth right our cannabis United couple been testament cannabis to as well hearing the the here election last challenging is the Our involvement has our results

have upbeat for continue makes and we we I the and time patient one U.S. these will in though, good believe a to We market business into to the the sense our as legalization be years, evaluate truly towards rushed X That opportunities said, at am, that market shareholders. reasons blue our however, for impact very not in the after of another. skies I ahead. last X we the Nearly administration new very on or towards cannabis cannabis form really have legalization enter

regulators. being in growth of We in Canada are with compelling to proud credible also profitable as with in voice operators we only as lot the represent position a one profitable a of opportunities the of front are of us. That opportunity And industry controlled the a of great opportunity forward for knowledge we this to operating and questions. for quarter diverse share we're be the look is agriculture, which operator, during hearing, expected the first at ready our decades now, to perspective XXXX. And in almost to X environmental unique any

Operator

question Aaron first Our the line Instructions] [Operator Grey Global Alliance come Partners. from will of from

Aaron Grey

know are in you hearing. luck this rescheduling across wishing the I stakeholders industry

there. I So efforts the made appreciate

question terms to for at not me, Delta time. expand this first just the facility in So decision of X the

about going think forward on allocation profitability. of prepared we to focus the product a remarks, in you planned lot As spoke

mentioned its the presence, versus building facility, broadly international? And own profitable about just we moving Canada speaking, within think but international which then So had how allocation as you're the in out lower do in your more not away SKUs. Canada, Netherlands, from you

imagine of with that facility. Delta of the kind thought not I line goes expanding in the So X

with how that? about you're products and overview allocation thinking broad a just of So

Mike DeGiglio

higher-margin large taking growing. that on a disappointed the there to a operators bullish as no very a It that the one potential. We're we lower-priced Europe. both happened pragmatic SKUs, Canada, or Holland. there's strategy allocating X been only at and raise markets. is market They're And sticks since we with we very ago. the probably recreational our side are either any legalization update when look approach Yes. on at and to the we've and very We're years margins clear price price of taken look towards I at flower Well, international said, and look medicinal legalization. is that we're on And legislation really

Steve the mentioned, top It -- $XXX As unbelievable. It's in property, excise license. for tax and tax. include tax. alone, to million include tax a include for It pay just licensing doesn't we'll tax. going year the include have We're million doesn't just doesn't It income both line this crazy. over payroll $X is I doesn't it to fee

movement we just to be until So start our we're going more seeing some to allocate we And Europe Canada, in bullish right investment now. where want prudent on flower. in we're very

with Canada. So CapEx cautious we in That the any spend we in Canada. largest to be said, footprint we remember, want being have

right. not it's So at quickly converting the time additional looking would and is building just that new like turn a on facility. It's be we very space we can when

we facility footprint, Canadian -- So entire that Aaron, the just that do could market and we in of -- remember, BC. from XX% could one

when So is it we but decided hold right, the won't point long at to this let's time steady. convert take

than -- Let's on quarter-per-quarter can more we'll a basis. a putting lot because then in we are we Europe. not chew it bite take evaluate And resources of

Aaron Grey

Okay. Appreciate commentary that there. color and

question me. for Second

you SKUs. on market, the within Just some on Canadian some the out-of-stock mentioned impact popular

expect -- more need right products back to you 'XX. so color was it could was getting some mentioned levels in get in inventoried? I So terms there just simply in due normal just to was your to there? the know you that Or you more the buyers XQ provincial offer impact of

internal, issues of it can So know sometimes of as color because there terms well. impact the drivers in provincial be just the I boards structural can be with just sometimes some it buying additional the

Mike DeGiglio

Aaron. Sure. I'm let Ann respond to you, going to

Gillin Lefever

us. The answer question. is it's on entirely Great

we And demand had a to So can't lot with a expected. higher it it's And all you do as experienced internal. you just speed-grow know, and that plant.

catch got So to the demand. growing up to you've the

so that's And why by projecting we're QX. improvement

Operator

Capital from come Eric Des of Lauriers will from question next Our the line Group. Craig-Hallum

Eric Des Lauriers

quarter. this the on results Congrats strong

to shifting pricing elaborate on in of are sort pricing one Can across wondering questions. being to of you this Aaron's bit think a certain plans get Canada in then categories? perhaps plans? First the you from mix shift mean, spec more of non-branded we elaborate mostly overall I international Just where Or that if bit just pricing a piggyback or average towards question, pricing? sort of can on to increase on your you plans. maybe there as the should higher board a just

Mike DeGiglio

you color Ann we're the positive is positive of think But #X to all I'm let would #X almost X being in continuous a #X not on going I business give of We years money. because our market just totally the player and Canada. just the do. When in a you're that. making looking share, I of is Canada. flow lot say above, in process at the time only flower the you market it's how the and EBITDA entire categories, look cash in a if business changing

Canada, so but love And we that? want want to obviously we you our Canada though, to in answer position to profitability. Specific do Ann, drive higher

Gillin Lefever

Yes.

was a longer -- market The like we're dropping years. the in is of Eric, pricing it So couple things. retail prior no

opportunity. SKU-by-SKU So a retail that brand-by-brand per Canada. when price not don't does good opportunities there's in on increases for price excellent average at we very us. the pricing to just thing across we've team also That or focused think drilling decisions propose is of And stabilization They're of the provincial and they opportunities would really the still across-the-board level. Last an for see and retailer. pricing opportunity good making the We're an down support for mention are increase. at the pricing an job said, I gram seen boards

it something and So it and in it XXXX. we correctly, -- it propose that if already an right as is is we we've executed see opportunity analyze

Eric Des Lauriers

question then And for helpful. next All right. That's very me.

obviously, indoor Holland, early is the in days. grow regarding this Just

are you're of overall a how operational operation? produce planted how structure just that differences sort nice month. just between of just But indoor profitability you that at in level? versus sort And your thinking that obviously cost and just of of you I talk the can about can confident then greenhouse wondering confidence expertise, your guys kind you overall last You about guess,

Mike DeGiglio

do Canada, foot. we Well, mean, indoor an square sure. facility, you as I know, XX,XXX have in

easier than everything greenhouse. So control. look, as more less is tell your indoor straight far out you because is I'll in or just

Of we've has we decades. X selective. The been cultivation very design I price you designing higher a to and have facilities create, near to course, it it be mean, for

have we overdo So fantastic We we just it. is we excellent. And facility. think don't team the built a

We and have plenty of most on cost because is that's lighting megawatts bullish there. remember, advanced CAD in XX the with EUR We very selling X, almost equivalent we're Xx put price to CAD at the is it XX% the more. X, no tax. Even if more,

we're from we're in proud for seed the So it. very we've future growing. there. And first it excited just this company that on growing the about totally time bullish fact, keep We to very to here, way. sterile gone seed base We're and a

Operator

Our Regan from from next Mike Equities. come of will Excelsior question line the

Michael Regan

Canadian the Congrats just with, Holland I But versus the cost great a that's currently facility higher of excise other forgetting should sort much, quarter. I'm margins? Or no that is there correctly, color in that Canada, this up costs compared tax margin are than EBITDA be factor the like on the the pricing, guess you only just great to Xx on there higher some of on XX% XX% comments the I'm and comparative hearing much frankly seeing following Canada? than facility. and Eric's you're said,

Mike DeGiglio

indoor. be will It than cost costs. than The our more higher is XX% greenhouse

Michael Regan

it. Got

Okay.

it Canadian [indiscernible]? at the reason adding wouldn't cannabis any there margin least back be is So

Mike DeGiglio

the well our will in margins. line and -- the of U.S. It more margins be Canadian more with excess be will in

Michael Regan

are? Which

Mike DeGiglio

XX%.

XX%, Our in margins range. XX% U.S. are the

haven't So just clear, to the I mean, lot published a information. we be of

to little So want everything here. I a apologize if Don't we're out. conservative being let

on to Canada. the Mike, compare it you but math can the industry, -- know and So do you it

and but keep are but that's price. EUR to in seen Holland, -- the that our there. that sell it in model, I've mind XX reflection And products up overall in there in Netherlands. of, costs EUR again, higher X, are So the a

We'll we're it's where it but extremely So goes, bullish. early days. see

Michael Regan

it. Got

guess I follow-up Canada. then And Okay. in

Or sort those sort are operators of sales, those any you to asset-light some recurring non-branded model? favorable more the sort the of larger of as of opportunistic to as terms or relationship the of of there more have sell? you is In sort building inventory pricing to shifted selling and is

Gillin Lefever

The related been the quarter has strengthened sales seeing BXB the year-to-date the and that to pricing. this much in seeing opportunistic significantly in over pretty we're you're that year. have opportunities pricing

Mike DeGiglio

no tax you in on there's branded have excise at take remember, insanity, BXB in level international unlike And times. of or Canada. sales that at And to that Mike, account

Operator

Our next line from from Doug comes Cooper of the question Beacon Securities.

Doug Cooper

the work Terrific in quarter.

Mike. a Just one, quick

So you're in #X provinces top country. the #X in in most Ontario, populous the Quebec,

So #X you not BC how are -- Alberta must across ones. So guess, country? only the other you the I and are

those are there? you ranking how in And is where So the trend provinces?

Mike DeGiglio

to up chance Well, to we give catch a to to others want us.

provinces. But and of to always do #X been mean, we're at That's overall, consumer, But X But Canada. top we firmly you to increasing different we've company variability. cannabis some this, the market. to X working sort It's the insights are what like years those from X. our I X in we're the X better durable, we what working you're Farms territory position. the of definitely It now, we're in There's and overall long-term consumer no, delivering tell basis believe I together. will be varies to do X Village to all that market, can been So overall, drop. a little from can #X where #X Canada. I slight going we're BC. care say? a about overall in industry, But home at were Doug. I Alberta, mean, to is in BC X, to that we I sustainable on just that a after innovation, on remain depends a newness Whether to

want the We just a forward. abroad, good. now arena brand So what Look, with export want to we making we for had -- Netherlands Canada company we achieve overall. felt if Canada. be the we to and love. But more definitely position have want we make in why wanted that but that feel in not feel that's wouldn't achieved not We to international moved very and going We secure people less in #X both or looking we more. into like very people have we're Canada, investments a to our from we love for it

Doug Cooper

just were the quite to looks pretty And in it get in Canadian Netherlands just the a want I market I last -- good, numbers second, saw frankly. into August, which in the looked like generally, reported but

country, pickup entire not actually of the seeing So I Are sort $XXX seeing you think in million in the growth, $XXX market? July. marketplace? What million but sales in you for share, the are from in up market a just

Gillin Lefever

sales growth is of basis. on The Q-over-Q a market slowing bit the overall a

So we are profile we little to around is the demand terms experiencing in I year us of next to and about the prudent that, mid-single somewhere slower it of in growth. be Canadian landing slower. thinking it be digits the for market going a than but And it's think budgeted, in others some

Doug Cooper

the Netherlands... on Just

Mike DeGiglio

Doug, Some on color some color, that. just

plow that receive growth a well cleaned So back they illicit at Ontario. how concern. And of I want trade on as of much is a want government LP up, million us millions, to It the in in because will have to they're trade is, to the have Canadian billions an one level to tax, get for starts really the That's impact $XX after both now excise in, north the forward. they release about illicit spend a honesty. in trade, thing go the depends illicit government think say the if going I against positive as Canadian dispensary level do to issued that the all that thing they that that going just

maintained, flower. #X you to of in We've We to said, The #X come is X as we've other as a taken I wanted that. we've approach thing crawl, #X. year ago We running. be run, #X said years be in to the know, We've pre-roll. always want walk, about from

As those excited I mentioned we've program in up vape. our laurels. don't And in very, vape we a put and on be my under-indexing sit our in first want to been the fourth we're #X and We lot categories. about quarter. into coming in launches comments, just We very

things by stand in see So we'll and first how the look quarter.

Doug Cooper

initial kgs the X,XXX Netherlands, to capacity. on moving just And is Okay.

a X long obviously, add it think for EUR million Like of a capacity? not average, potential. Like position you at be I it take to huge that's the rev a will when Netherlands might to gram you When XX product "sell think EUR you potential. amount out?" -- in do said how

Mike DeGiglio

ramped of rooms. second as up improvement we plant all, the know. flower don't in be we'll because entire continuous first quarter the fully a as you Well, process, It's

X So in of it there, a second continuous will plant flower couple will then and then we rooms have and harvesting won't a -- on all weeks. starting planted -- X the be improvement. it the honestly, first we'll we've the continuous I inventory quarter. It's weeks, third And than already think X be in more

I very think going to quick. go it's

we point, to know but further is. the So what I you at don't potential market overall this statistics the and out want comment threw there

it's think great, I pretty so.

Doug Cooper

the cost to build us what the facility What was cost to build? Just remind was? that

Mike DeGiglio

there Not revealing putting because not out our -- that we're just of kind competitors. to that

Doug Cooper

Okay.

metrics or you ballpark X,XXX will a seems -- we the profitability XX% from -- of at Well, there of just flow the getting the cash least sort flow at even Canadian Is like currently. I put you're put it that assumption? out around, Okay. cash kgs, the fair metrics guess and

Mike DeGiglio

Yes.

think on don't But so. come elaborate a And to that. want look. I over on take and I

Doug Cooper

-- yes, I that. So like

yesterday Florida quarter what means. the it's and U.S. that of little the stock EBITDA. the obviously, trading annualized extrapolation drilled But potentially participants maybe market now So like your a failing got bit on Xx looks last in

Or the in you place? Would guess, NCIB capital your potential some question? You in have the in Europe, need room facility. consider I an is do you for

Mike DeGiglio

bullish. it your pass, of I take the other that's the round, Florida just the sure I that it a there's next happening. would of and -- but happen. been on. people was administration remain look, I'm movement very voted question? under as sign. And a one need areas, to it. say that Constitution. reasons hemp. It's at Florida It's didn't legalize The moment positive. good the of Dallas I all, a that did so unfortunate Florida And that's I a some mean, I for elaborate. There's So majority in looked Trump what And will And just first you exact XX%

was Farm in will Farm out in that new 'XX big one X. year a Bill the Bill. under back or next come So the eventually, the move

movement of the a it's if matter we there's U.S. I and yes, market. huge a think So enter just when, not

Doug Cooper

EBITDA. you in just year, now would guess question example? was is NCIB this stock later to Xx you the is your I the -- an No. need in Or put Well, Would trading of for place? capital to more expand Europe

Mike DeGiglio

the Netherlands And years million going we EUR all, that of that in the started probably answer XX our all money the I not to I'm ago. in X we've Yes. Netherlands. answer question question. invested own will

We have no debt.

to of getting self-funded facility. That's far. not did so where cultivation point the today the are footprint all go we we that's to have that been the and with the Now cost

capital report do you how keep color going reserve year-end. we answer the make where now. on to probably just to and what some we'll that when allocate decision give right we're we'll -- we So a more we But

Operator

Associates. question come of Pablo Zuanic from next the line from Our & Zuanic

Pablo Zuanic

little terms bit on just the capital in allocation. following a of Mike, up international discussion

sales that So international and BXB based partner much you the at what ship there? I route part you of and And make believe, the Germany, getting control far, have direct believe by more the has to are M&A. U.K.? you past Australia others to said your the of model very numbers company investments mean, of grown X% else. take in control your I take re-exported I that market? in your more there own you to nature those company let Are be Could you you I route and for opportunities ownership and reported. And there. sales dock could so been of doubled, the by on a market everything in and of to of you hinted looking that, local is even you handle that more the of there for the mean room to case Australia, take the

Mike DeGiglio

be spent especially We in amount the patient the incredible of companies at money that's of Canadian cultivation we it want mind on side. and very some X prudent been When the it's last going. to where years, by be kind and look of both clear X, distribution blows side and others, markets, many Absolutely. our in EU the the international

right price. that, road. that. watching -- that's we without company. And our you done. the that see excellence pillar Look, be a have We vertically try do if have a foundation, have in that's So risky from flower hardest consistently think to but control folks And what you to is we've had lot opportunity. we at a have. That's great what a acquisitions integrated I to the They thing don't high-quality learned and of

and We that. have proud that of we're very

So opportunities seeing build a on of lot talk folks, other to how built that foundation, are we're it's going. that we on to the there. And

think medicinal both open, conduit to when but also is the comes consumer, not so to rec M&A international path, on the it wide and I on the side the the -- side as just well. the

integrated. in One pragmatic, love the the M&A professional government but the on no regulators. the being restriction just Netherlands, I of no vertically things restriction, the way, all really pro-business by the approach Netherlands, and Their or

didn't expansion for will point When from But enter feel we enter I and the it, U.S. Europe. So to us good winning we think out. want market the And a to to absolutely, we we go great this this is yes. all be focus. Remember, in that company we a now Canada really U.S.

long answer to but a yes. is question, that's answer So the your

Pablo Zuanic

ship terms can that? should where facility quick on not Canada, EU you I remind remind of or A know, yet? from And the but Yes. just of us those you follow-up markets in us quick is GMP can your answers. But

Mike DeGiglio

Yes.

are GMP. We EU

we just license. renewed got a fact, In -- our

So we're very that. proud of

and company has and highest I the the that just that German by only of extended. it's of have that we And standard, we're the greenhouse GMP I EU think know way, all. renewed license

yes. countries we're going the there of on do out -- in medicinal we right roll -- few, one as it. And side, be the are we So to more to

market. a So earlier, that pretty Canadian we And want reasons, competing overall, partners on -- in on have to a say, branded well your well, level, will and help if BXB, one with help because That's tide yes, want restrictive of ultimately, international. some us so. on all to ships, to question the raises the work we we the to you international BXB would folks the sales going why countries rising build-it-yourself we're drive up of do not our companies the succeed but market open with to more as move at

Pablo Zuanic

But towns producers now because the shops can from case both, will forced licensed the we to date? that there be Right. know Netherlands. And Do we they is a do will the buy right then just a know quick buy question when of still pilot in the And enforced? coffee the right? in from only be

Mike DeGiglio

will all the date are holders think XX on when based I at capacity. full be license

that's So key. the

really Sunfarms last -- X changing a that's parts. know, Arvo to Arbo So key. [ the probably X moving think you heard all it's the and cultivating I by X. the there'll Pure And ] I time. it's year-end, Leli [ was ] as in is mean, overseeing And of producing, be I from lot

close. pretty So it's getting

Pablo Zuanic

one involved, they've ago, changes level. said, derivatives, at last the been X recently. in weren't or has business They think X look, as but And right? been Understood. your Yes, regarding you been one hemp, right? years hemp CBDistillery I that state there's

one seeing Curaleaf, But with an drinks, more we're been hemp and that's other So edibles products. Tilray issue. companies, with

products. of Farm So will Republicans the We lot proactive companies know based what more are we very a like, taking getting but aggressive positive like. in lot know the a look terms the about rules don't yes, And don't hemp-infused of and look what I'm of control it Senate. Bill will on

know in you have are investments for space? I or that here that more products stay. or guys So launching that if -- you derivatives to time don't make Is a with full we hemp means this the to active new to already be CBDistillery? think suite

Mike DeGiglio

gummies. machine really we got invest. gummy We in incredible high-end that continue We invested a It makes online. to

investing regulatory technology. calls, try me new are said, the on if we've make always understanding back all is go prudent But framework. and we say new in where our we that decisions let products, So you've This you based Farms to as Village on been legal this. and

of okay, years thinking, then and regulation. an hemp. There's mistakes American is or got would hemp It's any responsibility legalized, well, was regulate not fact a as when no the it's free-for-all. government there, legalized, see the we it's the not One that FDA on take the that did department I of X been going finally for that

You steak buy oil gas at stations.

producing here? no the What's game competing knows making stuff who it. that what's who the to regulatory there's So has We're are happen. in people basement, highest environment. with their quality And in

who them. the FDA the we but what putting to So whatever like and regulate I interest has forces has agency And funds aside, won't or that's to happen. Congress can need said until U.S. them that, they government understand special

And wellness. to should only investments cannabis to we product the -- be company in the on besides me, are look pragmatic list all DEA, positive this great on all about It's our administration, -- it. And needs hopefully, and I hemp the till And you and at the say, health being a about government XX way. of are under and us to who's up this the going the companies, we're company catch other the all going market. we're regulate prudent wellness if bullish the see, it. Believe about very so is health really and on others

-- as feeling bullish So we're we're well. looking

Operator

[Operator from the Instructions] Cunnington Brenna Capital of from Markets. ATB comes question line Our next

Brenna Cunnington

Frederico This is congrats the results on on this Brenna for and quarter.

it in But was the just the resolved? will been earlier. effect quarter? trickle a spoke drag stock-outs regarding there this clarify, Or Just the driven that trying Canadian gross largely it like seems current you to to the this margin segment, has decline be by on cannabis into

Gillin Lefever

didn't catch Brenna. your first question, the the sorry, I'm part? just -- of repeat beginning That

Gillin Lefever

segment, trying just decline but just driven by a So stock-outs, was get the cannabis the so in regarding gross feel... the Canadian it margin to largely

Gillin Lefever

Got Got it. it. it. Yes. Got

in decline the BXB the mix more of because of gross actually is quarter. the So margin

stock-outs we Our gross had sequentially. actually up went products margin on where our branded

to the range quarter. So that previously for XX% we're guided XX% back this in we

Brenna Cunnington

regarding results. second Oh, you. election question then just a okay. recent the Got And

be your the will not of in of you generally or have and just those are rescheduling, participating but potential Year, New crystal ball that curious speaking? what hearing anything, in that Given the just process outcome thoughts kind a the regarding

Gillin Lefever

back fool [ to Mike. well, it I'll turn like there, That's a ] but,

Mike DeGiglio

majority bullish. just mean, I look, I've LPs X wellness. conservative is by promote last feeling cannabis, Yes. but for the say to of years, It's again, very over Americans try on it much to probably and more this of I think, legalization supporting are been more -- the health personal. of about millions not as dollars hundreds of can profit. I a spending cannabis I'm

plays issues. a Of movement This patients giving for be what the think movement IV I -- And clearly. This get for is very health is and course, to the a is huge have about. the just That's what cancer President. Senate That's to role we Stage to want a profitable. wellness. companies wellness try in opioids beyond Americans other communicate and this, choice not

I this box. checks XXXX. in in only been check box said, in I hemp support years. earlier, decriminalization as fact administration the As I coming have last in no of a the in demonstrated, for There's the X said That's the they that

I communicate. And in big role especially big on for and and change, side, on FDA to Kennedy I'm blood Robert change. at because the also a played it's with but food, big interest we time all the pharma, time cannabis us level, So go Senate, the as running the food special It's a know, just hopefully leadership bullish into past. has with not new is the educate going the opportunity I'm the And to afford Washington on think on really going for side.

So that the I'm haven't bullish past. and much in I been

and to the excited representing industry. honored we're we're be So very

Operator

turn the back now Michael for closing will over any call remarks. I to And

Mike DeGiglio

things lot the our Thanks, We're industry are excited today. for everyone, about for company. A and in both of together, coming XXXX. participating

reporting today. our your fourth for quarter we So you. forward Operator, participation thanks look year-end and to thank

Operator

participating Thank conclude in today's program. the This conference. does you for

have disconnect. now may You Everyone, great day. a

Village Farms International (VFF) 7 Nov 242024 Q3 Earnings call transcript