Executive Summary

Consolidated sales grew 20% YoY to $83.4M with adjusted EBITDA up 63% to $5.3M; net loss narrowed to ($0.8)M or ($0.01) per share as Canadian Cannabis and Fresh Produce both contributed positive EBITDA; operating cash flow was $4.3M .
Canadian Cannabis net sales rose 27% to $36.5M with retail branded +22% and international medicinal +111%; gross margin was 26% (31% excluding opportunistic non‑branded spec sales) and adjusted EBITDA was $4.8M; cash from ops $4.5M .
Management highlighted stock‑outs on popular SKUs that reduced Canadian sales by an estimated ~$2.5M; restocking began in September, with normalized in‑stock levels targeted by early Q1 2025; pricing has stabilized with SKU‑level increases where justified .
International catalysts advanced: EU‑GMP renewal, Netherlands cultivation began in October with first sales targeted for Q1 2025, and VFF was selected as the only operator to testify in the DEA’s rescheduling hearing expected Jan–Feb 2025—a potential regulatory catalyst for U.S. optionality .
Estimate comparisons: S&P Global consensus for Q3’24 was unavailable at time of analysis due to data limits; we therefore do not present beat/miss vs estimates (Values would normally be retrieved from S&P Global).

What Went Well and What Went Wrong

What Went Well
- Fresh Produce rebound: sales +20% YoY to $42.8M; segment delivered positive net income ($0.4M) and adjusted EBITDA ($2.3M) as tomato pricing normalized and yields/costs improved .
- Canadian Cannabis growth and share: total net sales +27% to $36.5M; VFF retained #1 market share in Ontario and achieved #1 in Quebec for the first time, reinforcing #2 national LP rank; “we maintained #1 market share in flower…and improved our market share in pre‑rolls” .
- International momentum: international medical sales doubled YoY; EU‑GMP certification renewed; Netherlands indoor facility started cultivation in October with first sales expected Q1 2025; “we’ve begun cultivation in October and are on track to have our first sales during the first quarter of next year” .
What Went Wrong
- Stock‑outs on high‑velocity SKUs impeded retail growth: management estimates ~$2.5M sales impact; “The answer is it’s entirely on us…higher demand…you can’t just speed‑grow a plant” .
- Canadian Cannabis gross margin mix pressure: GM 26% (down from 35% LY) due to increased non‑branded spec sales; ex‑non‑branded spec, GM was 31% (back in 30–40% target); adjusted EBITDA margin 13% vs 16% LY .
- U.S. CBD headwinds: sales declined to $3.9M (from $5.0M LY) as state restrictions on intoxicating hemp products persisted; adjusted EBITDA was ($0.2)M .

Financial Results

Consolidated headline metrics (oldest → newest)

Metric	Q3 2023	Q1 2024	Q2 2024	Q3 2024
Revenue ($M)	$69.5	$78.1	$92.2	$83.4
Net Income ($M)	($1.3)	($2.9)	($23.5)	($0.8)
Diluted EPS ($)	($0.01)	($0.03)	($0.21)	($0.01)
Adjusted EBITDA ($M)	$3.2	$3.6	($3.6)	$5.3
Cash Flow from Ops ($M)	$12.1	($0.05)	$5.7	$4.3

Notes: Q1’24 operating cash flow approximates break‑even; cash flow statement shows net cash used in operating activities of ~$0.05M .

Segment revenue trend (oldest → newest)

Segment Revenue ($M)	Q1 2024	Q2 2024	Q3 2024
VF Fresh (Produce)	$36.1	$47.0	$42.8
Cannabis Canada	$37.4	$40.7	$36.5
Cannabis U.S.	$4.5	$4.3	$3.9
Clean Energy	$0.0	$0.1	$0.2
Total	$78.1	$92.2	$83.4

Canadian Cannabis KPIs (oldest → newest)

KPI (Canadian Cannabis)	Q3 2023	Q2 2024	Q3 2024
Net Sales ($M)	$28.8	$40.7	$36.5
Gross Margin %	35%	26%	26% (31% ex‑non‑branded spec)
Adjusted EBITDA ($M)	$4.6	$4.8	$4.8
Cash from Ops ($M)	$4.8	$5.4	$4.5
Excise Tax ($CAD M)	n/a	n/a	$24.0 (Q3 only)

Additional balance sheet context: cash $28.7M; working capital $65.4M; total term debt $43.0M; net debt ~$18.7M at Q3 end .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Netherlands (Leli Holland) first sales	Q1 2025	Q2’24: production start Q4’24; first sales “in the first quarter of next year”	Cultivation began Oct’24; first sales in Q1’25 “on track”	Maintained timeline
Canadian branded GM target	Ongoing	Target 30–40% (historical target referenced)	Ex‑non‑branded spec, Q3 GM returned to 31% (within 30–40% target range)	Maintained/achieved ex‑mix
Inventory in‑stock normalization	Early Q1 2025	n/a	“Normalized in‑stock levels…by early Q1 of next year”	New operational marker
Delta‑2 capacity conversion	2025+	n/a	Paused: no incremental capital to expand Delta‑2 given excise tax; reallocating to higher‑ROI international	Paused
U.S. regulatory engagement	Q1 2025	n/a	Only operator selected to testify at DEA rescheduling hearing; expected Jan–Feb 2025	New catalyst
Cannabis term facilities	“Coming months”	n/a	Expect to extend cannabis term facilities; confident in lender support	Directional

No quantitative revenue/EPS guidance was issued; commentary focused on mix/profitability, supply normalization, and timing for Netherlands sales .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2024)	Current Period (Q3 2024)	Trend
International expansion (EU‑GMP, Netherlands)	Q1: Netherlands build‑out; EU‑GMP enabled exports; Germany legal changes supportive . Q2: on track to start production in Q4’24 and first sales Q1’25 .	Cultivation began Oct’24; first Netherlands sales targeted Q1’25; EU‑GMP renewed; international medical sales +111% YoY	Accelerating
Canadian excise tax burden	Highlighted broadly; focus on cash flow .	CAD $24M excise in Q3; YTD CAD $78M; materially influences capital allocation	Intensifying focus
Product availability	Not highlighted.	Stock‑outs reduced sales by ~$2.5M; restocking underway; normalized by early Q1’25	Improving into Q1’25
Pricing/mix strategy	Q1/Q2 opportunistic non‑branded spec to convert inventory and support cash flow .	Continued opportunistic B2B (no excise); retail pricing stabilized; selective SKU‑level price increases	Mix‑managed for margins
Market share	Q1: regained #1 Ontario, higher national share . Q2: only top‑5 LP growing sequentially .	#1 Ontario and now #1 Quebec; #2 national LP; #1 flower; #2 pre‑rolls	Positive, broadening
U.S. hemp/CBD	Internalized gummies; ongoing state restrictions pressure .	State restrictions persist; business stabilized; turning to growth with new SKUs	Stabilizing
Fresh Produce	Q2: softer pricing; margin pressure but expected 2H recovery .	Pricing normalized; gross margin improved; positive EBITDA and net income	Improving

Management Commentary

“Our third quarter reflects strong outperformance from our fresh produce business… as well as continued solid growth and leading market share in Canadian cannabis” — CEO Mike DeGiglio .
“We maintained #1 market share in Ontario and for the first time ever have achieved #1 market share in Quebec… [and] #1 market share in flower… [and] #2 position in pre‑rolls nationally” .
“We have… begun cultivation in October [in the Netherlands] and are on track to have our first sales during the first quarter of next year” .
“Total excise tax paid in Q3 was CAD 24 million… the largest single expenditure within our cannabis business and [it] factors heavily into our capital allocation strategy” — CFO Steve Ruffini .
On stock‑outs: “The answer is it’s entirely on us… higher demand than we expected… [we] project improvement by Q1” — COO Ann Gillin Lefever .

Q&A Highlights

Allocation and CapEx: VFF is prioritizing higher‑margin channels (international, selective SKUs) and pausing Delta‑2 expansion until Canadian excise/tax dynamics improve; the footprint can be ramped quickly when appropriate .
Pricing: Retail pricing has stabilized; VFF is taking SKU‑level price increases where supported by data and provincial boards; no across‑the‑board increases expected .
Netherlands profitability: Expected margins to exceed Canadian cannabis, more in line with U.S. CBD margins (60–70%) given EUR6/g pricing and no excise tax, despite higher indoor costs .
B2B/non‑branded: Opportunistic given improved wholesale pricing and lack of excise tax in B2B/international, which supports profitability and cash flow .
Market growth outlook: Canadian market growth slowing to mid‑single digits; illicit market enforcement in Ontario could support legal market growth .

Estimates Context

We attempted to retrieve S&P Global consensus for Q3’24 and surrounding periods (EPS, revenue, EBITDA), but data was unavailable due to request limits. As a result, we do not present beat/miss vs consensus for this quarter. Values would normally be retrieved from S&P Global.
Given the mix‑driven GM compression (non‑branded spec) and stock‑outs, we would expect models to adjust for: slightly lower near‑term Canadian net sales vs Q2, margins rebounding toward the 30–40% branded target as mix normalizes, and incremental contribution from Netherlands beginning Q1’25 .

Key Takeaways for Investors

Canadian Cannabis execution remains resilient: double‑digit sales growth, top market share positions in Ontario and Quebec, and positive EBITDA/CFO despite excise headwinds; stock‑outs are a temporary drag expected to normalize by early Q1’25 .
International is the near‑term growth and margin lever: international medical sales +111% YoY; Netherlands cultivation underway with first sales Q1’25 and structurally higher margins (no excise), offering a step‑up in profitability .
Fresh Produce turnaround is underway: pricing normalized; segment returned to profitability and EBITDA positivity, supporting consolidated cash generation alongside cannabis .
Mix management and pricing discipline should restore cannabis margins: ex‑non‑branded spec, Canadian GM returned to 31% in Q3 (within 30–40% target), with SKU‑level pricing and supply normalization supportive into 2025 .
Balance sheet/liquidity manageable: $28.7M cash, $65.4M working capital, $43.0M term debt; management expects to extend cannabis term facilities, limiting refinancing risk .
Regulatory catalysts: DEA rescheduling hearing participation (only operator selected) in early 2025 could reshape U.S. optionality; continued EU legalization momentum supports international strategy .
Risk watch: Canadian excise burden continues to steer capital allocation; U.S. CBD remains pressured by state restrictions; Nasdaq minimum bid price notice (Oct 18, 2024) remains an overhang until resolved .

Appendix: Additional Detail Tables

Canadian Cannabis channel composition (Q3 2024 vs Q3 2023)

Channel (USD $M unless noted)	Q3 2023	Q3 2024
Retail Branded Sales	$37.4	$44.9
Non‑Branded (Wholesale) Sales	$4.5	$7.4
International Sales	$0.7	$1.4
Other	$0.6	$0.4
Less: Excise Taxes	($14.4)	($17.7)
Net Sales	$28.8	$36.5

Consolidated P&L line items (Q3 2024 vs Q3 2023)

Line Item ($M)	Q3 2023	Q3 2024
Sales	$69.5	$83.4
Cost of Sales	($54.9)	($67.7)
Gross Profit	$14.6	$15.7
SG&A	($15.8)	($16.5)
Adjusted EBITDA	$3.2	$5.3
Net Loss	($1.3)	($0.8)
Diluted EPS ($)	($0.01)	($0.01)

Management/strategy quotations and operational specifics throughout are sourced to the Q3 earnings call transcript and press release .

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