Markets

Why Village Farms International Is Jumping Today

What happened

Shares of Village Farms International (NASDAQ: VFF) were jumping 12.7% higher as of 11:30 a.m. EDT on Wednesday. The company announced on Tuesday evening that the entire growing area at the Delta 3 greenhouse in British Columbia operated by Pure Sunfarms was now in production. Pure Sunfarms is a joint venture formed by Village Farms and Emerald Health Therapeutics to produce cannabis.

So what

It was only eight days ago that short-seller Citron Research published a scathing online report about Village Farms, causing the stock to plunge. Citron stated that Village Farms is "nothing more than a stock promotion" and called for an investigation of the company by the U.S. Securities and Exchange Commission.

Marijuana growing in a greenhouse.

Image source: Getty Images.

The news that the Pure Sunfarms Delta 3 greenhouse now has more than 1 million square feet of growing space in production appears to have reassured some investors that Village Farms is a legitimate player in the Canadian cannabis market. Importantly, Pure Sunfarms got its facility up and running on schedule.

With the Delta 3 facility fully operational, Pure Sunfarms should be able to deliver an annualized production capacity of 75,000 kilograms by the middle of this year. Village Farms owns 50% of the joint venture. The company could clearly demonstrate in the near future that it's not a "pretender" as Citron Research alleged.

Now what

Even more capacity should be on the way. Village Farms CEO Michael DeGiglio said that Pure Sunfarms plans to "replicate the success" of the Delta 3 greenhouse with an identical Delta 2 sister facility. This should double Pure Sunfarms' annual production capacity to 150,000 kilograms. The first harvest at the Delta 2 facility is anticipated by mid-2020, with full operations expected in the fourth quarter of next year.

You can expect that DeGiglio and other Village Farms executives will have plenty to say about Pure Sunfarms' progress in the company's next quarterly conference call. That call is scheduled for Friday, May 10, 2019.

10 stocks we like better than Village Farms International Inc
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Village Farms International Inc wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More