Executive summary

Village Farms entered 2025 with a mixed quarter: stable revenues from its core produce business but a widening net loss as the company invests in its cannabis and energy strategies. Management is balancing working capital and a targeted capital plan (including a planned CAD$10M conversion to expand cannabis capacity), while investor attention focuses on Q2/25 results and execution of the Pure Sunfarms growth initiatives.

Q1 2025 — the numbers that matter

• Revenue (Q1 2025): $77.07 million.

• Gross profit: $11.34 million.

• Net loss (attributable to shareholders): $6.70 million (basic loss per share ≈ $0.06).

• Cash & cash equivalents (Mar 31, 2025): $15.13 million.

• Inventories: $51.46 million; long-term debt: $34.38 million.
  These headline figures come from Village Farms’ Form 10-Q for the quarter ended March 31, 2025 and show a company still investing through a near-term loss while carrying meaningful inventories and modest liquidity on the balance sheet.

What the Q1 snapshot implies

The revenue base demonstrates the resilience of Village Farms’ produce segment, but margins and the bottom line are under pressure from increased COGS and continued SG&A. Inventory levels are sizeable — consistent with seasonal production cycles and the company’s integrated supply model — and cash on hand is adequate for short-term operations but will need to be managed carefully as capital projects roll out. The net loss is not unusual for an operator transitioning part of its footprint from produce to higher-growth cannabis operations, which carry conversion costs and upfront capex.

Strategic moves: capacity expansion & brand work

Village Farms is actively reallocating greenhouse footprint to higher-margin cannabis production. In August 2025 the company announced a phased conversion of roughly 550,000 sq. ft. to add about 40 metric tonnes of annual cannabis production capacity — a program budgeted at approximately CAD$10 million, with ramping through 2026 and target full run-rate by Q1 2027. That investment signals management’s confidence in scaling Pure Sunfarms and supporting international and retail initiatives.

Pure Sunfarms — the company’s largest Canadian cannabis subsidiary — has also been active on product and packaging innovation (for example, rolling out windowed packages to improve in-store transparency and consumer trust), underlining a push to strengthen retail differentiation as production scales.

Market & regulatory context — what to watch

Village Farms regained compliance with Nasdaq’s minimum bid price requirement in June 2025, removing an imminent delisting risk and improving access to U.S. capital markets — an important operational tailwind as the company executes its conversion projects and international distribution strategy. That regained compliance reduces a headline risk but does not remove the need for continued share-price performance.

Near-term catalysts & risks

• Q2/25 results and management commentary (August 11, 2025): the market will watch revenue mix, gross margin drivers, and updates on the conversion timetable. Village Farms scheduled its Q2/25 release and conference call, which are likely to drive near-term stock moves.

• Execution risk on conversion: CAD$10M planned capex and a multi-year ramp require timely construction, yield improvements and channel placement.

• Commodity & energy prices: greenhouse operations are sensitive to energy costs; the company’s energy segment and RNG partnerships are relevant offsets but remain execution-dependent.

• Regulatory shifts: Canadian and export rules (and eventual U.S. opportunities) will impact realized pricing and margins.

Conclusion — investor & editorial takeaway

Village Farms is at a strategic inflection point: stable produce operations fund a deliberate pivot to cannabis scale-up and consumer brand enhancement. Q1 shows the tradeoff — revenue stability but near-term losses as investments are made. The CAD$10M Delta conversion and Pure Sunfarms product innovations are positive, long-term signals, but investors should watch the Q2/25 report, conversion execution, cash-flow trends and any updates on international distribution to judge the timeline to profitability.