Cannabis Stock VFF Soars Over 300% YTD: Time to Buy, Sell or Hold?

Core Insights - Village Farms International (VFF) shares have surged 328% year to date, significantly outperforming the industry's 10% decline [1] - The stock's rise is attributed to favorable comments from former President Trump regarding marijuana rescheduling and the company's divestiture of its fresh-produce business to focus on cannabis operations [2][4] Company Developments - Village Farms announced a strategic pivot by divesting its fresh-produce business, which accounted for nearly half of total revenues but operated on thin margins [4] - The divestiture was completed on May 30, with VFF receiving $40 million in cash and retaining a 37.9% equity stake in Vanguard Food LP [5] - Post-transaction, the company is focusing on its high-margin cannabis portfolio and expanding exports into international medical markets [6] Financial Performance - In Q2 2025, Village Farms reported a net income of $9.9 million and an adjusted EBITDA of $17.1 million, achieving a record 29% margin [9] - The Canadian cannabis gross margin improved to 39% from 26% year-over-year, driven by a stronger product mix and disciplined cost management [9] - The company experienced a 233% growth in operating cash flow, reinforcing its transformation into a high-margin cannabis operator [9] Market Outlook - VFF expects strong momentum in international medical cannabis sales through the remainder of 2025, driven by expanding market access in Europe [8] - The company has already met its full-year target of tripling 2024 export sales within the first half of 2025 [8] Shareholder Returns - Village Farms announced a $10 million share repurchase program, reflecting management's confidence in sustained profitability and cash generation [10] - The company is well-positioned to pursue growth investments and shareholder returns without relying on external financing [10] Competitive Landscape - Village Farms operates in a competitive market, facing competition from peers like Curaleaf Holdings and Tilray Brands, both of which are also pursuing international expansion [12] - As VFF gains traction in international markets, it may face increased competitive pressure, potentially accelerating sector consolidation [13]