Shares of Village Farms International VFF have been declining steadily over the past few years.
This pullback reflects regulatory hurdles and increasing competition in the cannabis space, rather than company-specific issues. Although sector sentiment briefly improved following President Donald Trump’s push toward federal marijuana rescheduling, this move alone is unlikely to materially change the operating environment. Broader reforms, such as the SAFE Banking Act, are still needed to improve access to capital and reduce industry-wide financial constraints.
Let’s delve into the company’s fundamentals to gain a better understanding of how to play the stock amid this price decline.
International Cannabis Sales Eclipse VFF’s Domestic Headwinds
Village Farms International’s 2025 performance highlights a clear shift in its revenue mix, with international cannabis sales emerging as the primary growth driver, offsetting pressure in domestic and U.S. markets.
For the full year, Canadian cannabis net sales rose 10% to $163.7 million. However, underlying trends within the segment reflect a transition rather than broad-based growth. Branded and non-branded sales each declined about 14%, primarily due to product mix optimization and pricing pressure in the Canadian market. At the same time, international cannabis sales surged over 500% to $37.8 million, driven by strong export demand across Europe, particularly in medical markets.
This shift significantly altered the company’s revenue composition. International cannabis sales now account for a significant portion of sales in 2025, underscoring Village Farms’ increasing reliance on higher-growth global markets.
The company’s U.S. cannabis business, however, continued to face headwinds, with sales declining due to ongoing regulatory uncertainty and competition from unregulated hemp-derived products. This weakness was more than offset by contributions from the Netherlands, where Village Farms’ recreational cannabis operations generated incremental revenues during their first full year of scaled commercialization.
Overall, Village Farms’ 2025 results demonstrate that while domestic markets remain competitive and the U.S. business faces structural challenges, the company’s expanding international footprint — supported by its EU-GMP-certified production capabilities — is now the key engine driving growth and reshaping its long-term revenue profile.
Looking ahead, management expects this momentum to continue, with international markets remaining the primary growth driver. VFF anticipates sequential growth in export sales, supported by expansion into new geographies and ongoing capacity additions in Canada and the Netherlands.
Stiff Competition in the Cannabis Space
Village Farms operates in a highly competitive market. It faces stiff competition from its peers, such as Curaleaf Holdings CURLF and Tilray Brands TLRY, both of which are also pursuing international expansion and cost optimization strategies.
As Village Farms gains traction in international markets — particularly in Europe — it is likely to face increasing competition from Curaleaf Holdings and Tilray Brands. This could lead to more aggressive expansion strategies across the sector, potentially accelerating consolidation and limiting Village Farms’ ability to rapidly scale market share.
VFF Stock Performance & Valuation
Shares of Village Farms have lost nearly 26% year to date, significantly underperforming the industry’s 0.8% decline.
Image Source: Zacks Investment Research
EPS estimates for 2026 and 2027 have declined over the past 30 days.
Image Source: Zacks Investment Research
How to Play VFF Stock?
Village Farms International has demonstrated a meaningful shift in its business model, with international cannabis sales emerging as a key growth driver and profitability improving materially in 2025. The company’s expanding presence in European medical markets and contributions from the Netherlands position it well to offset ongoing challenges in domestic and U.S. markets.
However, risks remain. The cannabis industry continues to face pricing pressure and intense competition. Recent downward revisions in EPS estimates suggest a pessimistic analyst outlook for the stock in the near term. Village Farms currently carries a Zacks Rank #5 (Strong Sell), suggesting limited upside and elevated risk for investors at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).