Exclusive: How Village Farms’ 7 Million-Square-Foot Cannabis Bet Is Attracting Wall Street

For years, cannabis companies waited for a regulatory breakthrough that would bring institutional capital back into the sector. Village Farms International (NASDAQ: VFF) says investors are beginning to return—but they are no longer buying the industry indiscriminately.

“There was a prevailing view for many years that the industry was almost uninvestable,” Sam Gibbons, senior vice president of corporate affairs and investor relations at Village Farms, told IgniteIt in an exclusive interview.

A lack of growth and what Gibbons described as “regulatory dysfunction” pushed cannabis off the radar of many generalist investors. Now, improving regulatory visibility in the United States and growth across international markets are prompting some institutions to examine the sector again.

“Some of those names have started to come back, just based on our inbound inquiries and the types of meetings we’ve been having,” Gibbons said. “Definitely, some household names have started to return to the space and sharpen their pencils.”

The shift remains selective. Rather than positioning for a single regulatory catalyst, investors are looking for companies that can demonstrate growth, compliance, footprint, profitability and disciplined capital allocation.

Citadel Discloses a 5.5% Position

The clearest evidence of institutional interest in Village Farms arrived in August.

An SEC Schedule 13G filed by Citadel-affiliated entities and Kenneth Griffin disclosed beneficial ownership of approximately 6.69 million Village Farms shares, representing 5.5% of the company’s outstanding stock.

The reported holdings included 5.625 million shares attributed to Citadel Advisors entities, approximately 105,000 shares held through Citadel Securities and roughly 1.06 million shares attributed to other affiliated entities. The filing certified that the securities were acquired in the ordinary course of business rather than to influence control of Village Farms.

That disclosure followed a separate June registered direct offering in which two U.S. institutional investors purchased 7.5 million Village Farms shares at $2 each, generating approximately $15 million in gross proceeds.

Village Farms did not identify the two investors when announcing the transaction. The company said the offering emerged after management held meetings in New York and was not something it had previously contemplated.

“We were marketing with one of our covering banks in New York in the spring and had a couple of very strong meetings,” Gibbons said. “Coming out of those meetings, there was an expression of interest.”

Management decided that adding institutional investors could improve the quality of the shareholder base even though the company said it did not need the capital.

“There’s not been really great price discovery in cannabis for a long time,” Gibbons said. “Having a couple of names like that, we think, can over time serve as lead-steer investors that hopefully other folks follow on behind them.”

Institutions Want Growth, Not Another Headline

The conversations Gibbons is having suggest the institutional thesis has changed.

Cannabis investors once attempted to position themselves ahead of legalization, banking reform, rescheduling or another major policy event. Generalist institutions returning today appear more interested in whether individual companies can generate sustainable growth independently of those outcomes.

“A lot of it ultimately does come down to growth,” Gibbons said. “That’s the major catalyst or criteria that makes these stories attractive.”

Village Farms is pitching a platform with established cultivation infrastructure in Canada and the Netherlands, combined with growing exposure to international medical markets.

Gibbons said one industry hedge fund recently acknowledged that it had underestimated Europe.

“I actually had a conversation with an industry hedge fund last week who admitted that they underappreciated the potential of the European market and have changed their tune,” he said.

Village Farms’ latest results provide context for that reassessment. In the second quarter of 2026, international cannabis exports increased 74% year over year and 43% sequentially to a record $20.9 million.

Cannabis net sales reached $53.5 million, while cannabis adjusted EBITDA from continuing operations rose 16% to $15.3 million, representing 28.5% of segment sales. The cannabis gross margin increased from 42% to 51%.

At the consolidated level, Village Farms reported $64 million in net sales, $7.1 million in net income and $8.9 million in operating cash flow. It ended the quarter with $73 million in cash after completing the institutional placement.

Why Institutions Still Avoid U.S. Cannabis

The return of institutional investors has not translated into broad support for U.S. multistate operators.

“Most of the institutional and large family office or non-filer hedge funds that are current shareholders, most of them do not have any investments in the U.S. cannabis industry today,” Gibbons said.

That divide reflects the different risk profiles facing U.S. and internationally focused operators. American MSOs remain exposed to federal prohibition, restricted exchange access, tax burdens under Section 280E and state markets that can stagnate after their initial adult-use growth.

By contrast, companies exporting medical cannabis into federally regulated international markets can pursue growth without waiting for U.S. reform.

“Our organic growth trajectory right now has nothing to do with any U.S. outcomes,” Gibbons said. “That makes it a little easier to invest in a story like Village, where the U.S. opportunity really is all just upside.”

Village Farms owns greenhouse assets in Texas that it has said could eventually be converted to cannabis production. Gibbons emphasized that this remains a long-term possibility rather than the foundation of the current investment thesis.

“We’ve said that we expect to be in Texas someday,” he said. “But that’s going to be a long-term opportunity for us. For us, that’s just all upside.”

Cannabis Valuations Remain Compressed

Institutional participation is improving, but Gibbons does not consider the sector fully investable again.

Trading volumes remain low, and institutional ownership is still far below the levels common across established public-market industries.

Gibbons estimated that many of the largest publicly traded cannabis companies in the United States and Canada remain valued at approximately four to six times enterprise value to EBITDA. Companies receiving higher multiples, he said, tend to be larger operators with international exposure.

“We’d love to see the space back between 10 and 15 times for everyone,” Gibbons said, referring to valuations closer to those assigned to established consumer, pharmaceutical and biotechnology businesses.

Village Farms estimates its institutional ownership at approximately 25%. Gibbons said many cannabis companies remain below 10%, while institutional ownership can approach 90% in mature industries.

More 13F filers would signal progress, but regulatory reform alone will not restore those valuations.

“It’s all ultimately going to depend on growth, profitability and folks having confidence in management teams that they’ll make smart capital-allocation decisions with the cash that they create from operations,” Gibbons said.

That creates a more demanding market than the previous cannabis investment cycle. A rising regulatory tide may no longer lift every public operator. Institutions returning to the industry are looking for businesses that can grow before Washington delivers—and still benefit if it eventually does.