Exclusive: Village Farms Targets Brands, Vapes and European M&A to Capture More Cannabis Margin

Village Farms International (NASDAQ: VFF) is looking beyond cannabis exports as it builds a larger European business, targeting branded products, manufactured formats and potential acquisitions that could move the company further downstream.

“We’re wholesaling for the most part,” Sam Gibbons, senior vice president of corporate affairs and investor relations at Village Farms, told IgniteIt. “How do we figure out how to get more branded products into these markets?”

That transition could allow Village Farms to capture more of the value between cultivation and the patient while reducing its dependence on bulk cannabis sales. Gibbons said the company wants to work more closely with pharmacy networks over time and plans to expand its presence in vapes and other manufactured products across international markets and Canada.

The strategy comes as exports become a larger part of Village Farms’ cannabis business. The company reported record international export sales of $20.9 million during the second quarter of 2026, up 74% from the previous year and 43% sequentially. Gibbons described the broader international operation as running at approximately $100 million annually.

Village Farms also expects to enter multiple additional international medical cannabis jurisdictions before the end of 2026, he said.

Europe is also becoming a focus for inorganic growth. Village Farms recently appointed former chief financial officer Steve Ruffini to lead its mergers and acquisitions initiatives full time.

“There are attractive M&A opportunities across the global opportunity set, but certainly in Europe there are things that would be attractive to us,” Gibbons said, without identifying potential targets.

Protecting Distribution While Moving Downstream

The company is balancing its downstream ambitions against customer-concentration risk. Gibbons said Village Farms seeks to prevent any single international customer from accounting for more than 10% of sales.

That approach gives the company access to multiple distributors while it evaluates where direct commercial relationships, branded products or pharmacy partnerships could produce stronger margins.

Gibbons argued that compliant production capacity is becoming increasingly difficult to secure as European demand grows. Village Farms operates what it calls the world’s largest single-site EU-GMP-certified cannabis facility in British Columbia, giving it a large platform for supplying regulated medical markets.

“It’s not easy to get these certifications,” Gibbons said. “The requirements for EU-GMP-compliant product are much more stringent than what folks are typically used to dealing with in the United States.”

A Potential 10X Dutch Opportunity

The company is also establishing a production base inside Europe. Its Phase II facility in Groningen is expected to increase annualized Netherlands capacity to approximately 10 metric tons once fully ramped in early 2027.

Gibbons said the Groningen operation is serving as Village Farms’ European headquarters and could become significantly more valuable if the Netherlands expands its regulated cannabis experiment nationwide after the pilot concludes in 2029.

“The total addressable market will expand by about 10x,” Gibbons said. “That would just be a home-run outcome for us.”

A permanent national framework could also create opportunities for vertical integration, potentially including coffee-shop ownership, depending on the final regulations.

For Village Farms, the European strategy is therefore evolving from a straightforward export operation into a broader platform encompassing local cultivation, branded products, distribution relationships and acquisitions. The opportunity is to capture more of the margin after it arrives.