Canopy Growth reported third quarter fiscal 2021 financials on Tuesday, posting net revenue up 23 per cent year-over-year to $153 million and an adjusted EBITDA loss of C$68 million. The company’s net loss was C$829 million owing to impairment and restructuring charges.
The comparison is stark, according to Sarugaser, who pointed to Village Farms’ soon-to-be ninth consecutive quarter of positive EBITDA (VFF’s fourth quarter 2020 is due in early to mid-March) versus Canopy which has yet to deliver an EBITDA-positive quarter.
In terms of history, Village Farms goes back to 1987 when the Delta, BC-based company started up as a greenhouse grower of vegetables. The company entered the cannabis trade with the joint venture Pure Sunfarms, over which VFF last year took full control.
Now, Village Farms has three primary verticals in the production and distribution of produce in the US, Canada and through partner growers in Mexico, producing and distributing cannabis via Pure Sunfarms and producing and distributing hemp and hemp-derived CBD in the US through its operations in Texas and other states. Village Farms also has international interests in Australia-based Altum International and DutchCanGrow in the Netherlands.
On the cannabis front, Village Farms has been growing its market share in the Canadian sector which is now beginning to find its feet. The company reported in its most recent quarter that it hit 15.2 per cent market share of the dried flower category (by kilograms sold) for the month of October with the Ontario Cannabis Store and it stayed as the top-selling brand of dried flower products with the OCS for the year-to-date ended October 31, 2020.
By Sarugaser’s count, VFF now has the fourth-largest share of Canada’s adult-use market.
“With VFF’s powered-up balance sheet, lean cost structure (few/no write-downs), and largest market share relative to its size, we continue to view VFF as the best value of the Canadian Big 5,” Sarugaser wrote.
“While Canopy Growth’s Canadian adult-use cannabis revenue grew 5.5 per cent quarter-on-quarter, our channel checks indicate VFF’s grew closer to ~40 per cent between 3Q and 4Q20. Contrasting CGC’s versus VFF’s Canadian adult-use market share — Oct. 2020: 12 per cent versus 7 per cent | Nov. 2020: 12 per cent versus 7 per cent | Dec. 2020: 11 per cent versus 6 per cent — VFF has 50 per cent of CGC’s market share, yet remains
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Well said, you hit every point. I'm a investor going back to late 2016, Nick I've always had just one issue with VFF, it's the name associated with agricultural, not to many people seem to think VFF is in the cannabis business, I have enlightened many of my colleagues and to their surprise, just how incredible VFF/PSF is. Although this doesn't address the pressing issue "agricultural associated". My understanding is, VFF is considering delisting from the NYSE, if this were to be, would this not be the ideal time to name change and drop VFF and just be PSF?