Village Farms International (NASDAQ:VFF) is a name to know in the cannabis sector. Village Farms has been one of the hottest cannabis stocks over the past few months. Shares have jumped almost 250% since the beginning of this year.
VFF stock soared 10.2% on Friday after the cannabis grower reported strong first-quarter earnings results.
The grower which traditionally dealt with fruits and vegetable caught the attention of the cannabis industry in 2017 because of its network of greenhouses. Village Farms International formed Pure Sunfarms by partnering with Emerald Health Therapeutics. Investors are enthusiastic about the potential Pure Sunfarms and that is why Village Farms International stock has more than tripled this year.
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Stock jumps on strong Q1 results
Tuesday, Village Farms International stock surged after the company reported that Pure Sunfarms had tripled its revenue to around $10.8 million in the quarter. Pure Sunfarms is one of the most promising prospects in the cannabis industry and it reported a profit of $8.6 million which includes the $6.1 million valuations of the company’s cannabis crop at the end of the quarter.
Besides the gain from the crop, the company could still have had an operating profit of $6 million. Most of the profit was driven by growth in assets sale.
Pure Sunfarms milestones
The company has made considerable progress and already they have begun planting in the first and fourth quadrants in the Delta 3 facility which means the whole 1.03 million square foot facility will soon start production. The company has also indicated that it is on course to attain a complete run rate of around 75,000 kg in annual production by mid this year. By 2021 the Delta 2 facility is expected to have an annual production of 150,000 kg.
Michael DeGiglio, the CEO stated that they were thrilled to report that Pure Sunfarms had produced sequential quarter profitability. This is down to the success of the Delta 3 facility whereby the yield, quality, and costs are within expectations and as a result, the venture has been able to attain profitability.
Village Farms international stock remains relatively cheap as the company is valued at $600 million. It, however, has some risks considering how quickly the price has popped this year and with industry uncertainties the prices might be crushed because of oversupply from growers.
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Disclosure: we hold no position in $VFF, either long or short, and we have not been compensated for this article.