Brenna Cunnington's questions to Village Farms International (VFF) leadership • Q3 2024
Question
Brenna Cunnington asked for clarification on the Canadian cannabis gross margin decline, questioning if it was resolved or would continue to be a drag. She also asked for the company's perspective on the potential process and outcome of U.S. cannabis rescheduling following the recent election results.
Answer
COO Ann Gillin Lefever clarified that the gross margin decline was due to the sales mix, specifically a higher volume of lower-margin B2B sales, and not from stock-outs. She noted that the gross margin on branded products actually improved sequentially and is back within their 30-40% target range. CEO Mike DeGiglio expressed increased bullishness on U.S. rescheduling, citing the incoming administration's past action on legalizing hemp and the potential for new leadership in the Senate and FDA to be more favorable to the industry.