Cannabis Stock VFF Soars Over 300% YTD: Time to Buy, Sell or Hold?

Shares of Village Farms International VFF have skyrocketed 328% year to date, significantly outperforming the industry’s 10% decline.

This upside can be largely attributed to favorable comments from President Trump in recent months around marijuana rescheduling — a move that sparked sharp rallies across several U.S.-listed cannabis stocks, including Village Farms. Shares have also risen due to the company’s recent divestiture of its fresh-produce business, a step aimed at establishing itself as a pure-play cannabis operator.

The stock’s exceptional performance has left investors wondering whether to buy, hold or sell it. Let’s delve into the company’s fundamentals to gain a better understanding of how to play the stock amid this price rally.

Village Farms Pivots Fully Toward Cannabis Operations

In mid-May, Village Farms announced a bold pivot — it decided to divest its fresh-produce business, a move aligned with its growing success in cannabis. Though the produce unit accounted for nearly half of total revenues, it operated on thin margins and faced persistent operational headwinds.

Village Farms officially closed the divestiture on May 30, transferring those assets to Vanguard Food LP, a joint venture backed by private investment firms. Per VFF, the transaction enables it to solidify its identity as a pure-play cannabis company, leveraging about 160 acres of advanced greenhouse facilities. As part of the deal, the company received $40 million in cash and retained a 37.9% equity stake in Vanguard.

Post-transaction, Village Farms has doubled down on its high-margin, branded cannabis portfolio across both Canadian and international markets. The company is also focused on expanding its exports into emerging international medical markets and enhancing operational efficiency by fully integrating its greenhouse production capabilities under one vertical cannabis-focused model.

As of the second quarter of 2025, Village Farms retained its position as one of Canada’s top three cannabis players, even while streamlining its retail portfolio. During the quarter, the company noted strong performance in international medical export sales that jumped 690% year over year and 116% sequentially. VFF also began commercial shipments to the Netherlands in early 2025, contributing $2.4 million to incremental second-quarter revenues.

Looking ahead, VFF expects momentum in its international medical cannabis sales to remain strong through the remainder of 2025, driven by expanding market access across Europe. The company has already met its full-year target of tripling 2024 export sales within the first half of 2025, underscoring the growing global demand for its high-quality products.

VFF’s Buyback Reflects Confidence in Sustained Profitability

Village Farms’ second-quarter performance showcased its most profitable quarter to date, with net income of $9.9 million and adjusted EBITDA of $17.1 million, representing a record 29% margin. A stronger product mix, greater focus on higher-margin products and disciplined cost management lifted Canadian cannabis gross margin to 39% from 26% last year. The company also delivered 233% growth in operating cash flow, reinforcing the success of its strategic transformation into a leaner, high-margin cannabis operator.

Building on this momentum, Village Farms recently announced a $10-million share repurchase program, underscoring management’s confidence in the sustainability of its earnings and cash generation. Backed by a solid balance sheet and positive free cash flow, the company seems well-positioned to pursue both growth investments and shareholder returns without relying on external financing. VFF expects profitability to remain strong as expanding European exports and steady Canadian demand continue to support margin improvement through the coming quarters.

Other Players in the Cannabis Space

Village Farms operates in a highly competitive market. It faces stiff competition from its peers, like Curaleaf Holdings CURLF and Tilray Brands TLRY, both of which are also pursuing international expansion and cost optimization strategies.

As VFF gains traction in international markets — especially in Europe — it is likely to draw more attention from Curaleaf and Tilray. This competitive pressure could spur more aggressive strategies from its peers, potentially accelerating sector consolidation and limiting the company’s ability to expand market share rapidly.

VFF Valuation Estimates

EPS estimates for fiscal 2025 and 2026 have remained unchanged over the past 30 days.

How to Play VFF Stock?

While Village Farms operates in a highly competitive market, it has managed to stand out through disciplined execution and improving profitability. Recent momentum has also been fueled by sector optimism following favorable comments from former President Trump on marijuana rescheduling, which lifted sentiment across U.S.-listed cannabis stocks.

With an active buyback program and sustained margin improvement, the company appears well-positioned to build on its gains. Investors may consider VFF stock, which currently holds a Zacks Rank #3 (Hold), as a selective play on the sector’s long-term recovery.

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).

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