Village Farms Completes Produce Spin-Off to Focus on Cannabis

Village Farms has finalized its transition into a cannabis-centric operation by closing the deal to divest its U.S. produce business. This change, officially completed on May 30, allows the company to concentrate its resources and efforts on cannabis cultivation and sales.

The produce business has been integrated into Vanguard Food LP, a joint venture led by industry veteran Charlie Sweat and backed by private equity. Following this transaction, Village Farms has secured $40 million in cash and retains a minority stake in Vanguard, while it will no longer manage day-to-day operations related to produce.

CEO Michael DeGiglio emphasized that this marks a new phase for Village Farms, stating, “We are ready to move forward independently from produce.” The decision to shift focus towards cannabis was initially revealed earlier this year, aiming to capitalize on non-core greenhouse assets and strengthen the company’s position in the cannabis market.

With the successful completion of this spin-off, Village Farms now controls 160 acres of state-of-the-art greenhouse facilities. This includes the Monahans facility in Texas and three greenhouses located in British Columbia, Canada. The company aims to expand its cannabis operations globally, with a strategy built around three key pillars: increasing international market presence through exports and Dutch assets, assembling a skilled cannabis-focused team with extensive controlled environment agriculture (CEA) experience, and leveraging the equity stake in Vanguard for future growth.

While Village Farms continues to operate in Canada, balancing cannabis and vegetable production, it has secured long-term supply agreements with Vanguard. This arrangement allows the company to maintain revenue from the produce side while reallocating capital and focus towards cannabis initiatives. Maintaining strategic greenhouse properties, such as the leased Marfa I site, provides additional flexibility as the U.S. cannabis regulatory landscape evolves.

DeGiglio noted, “We’ve built a cannabis business on the back of 35 years in agriculture. Now we’re investing the time and resources to become one of the world’s most respected cannabis operators.” With the current uncertainties surrounding cannabis reform in the U.S., this strategic pivot positions Village Farms for potential growth in an expanding market.