Company’s continued expansion in cannabis cited as reason for decision to put greenhouse crop division into separate ownership
North American company Village Farms International has agreed to sell off a majority stake in its greenhouse fresh produce division Village Farms Fresh, as it looks to focus attention on its growing and highly profitable international cannabis business.
The deal and sees the creation of a newly-formed holding company called Vanguard Food – not to be confused with Vanguard Group International – that will take certain assets and operations into private ownership, and is backed by private investment firms including Sweat Equities.
With Village Farms retained as a minority investor, the aim is to allow that fresh produce business to “flourish independently” with new strategic capital partners, it said in a statement.
Village Farms Fresh is one of the largest and longest-operating vertically integrated greenhouse growers in North America, producing tomatoes, cucumbers and peppers. Village Farms itself has headquarters in both Canada and the US.
Village Farms is expected to receive US$40mn in cash proceeds, as well as a 37.9 per cent equity ownership interest in Vanguard Food, assuming the deal goes through as expected in the second quarter of 2025.
“Today’s announcements reflect a transformative change for Village Farms which we believe will unlock tremendous long-term value for both our cannabis and produce businesses,” president and chief executive officer Michael DeGiglio commented.
“Our ownership interest in Vanguard improves upside potential for our legacy produce business, with experienced industry partners who have created significant value for shareholders in the past and are committed to executing a roll-up strategy of other produce assets.”
Under the agreement, Village Farms said it would privatise its Texas-based 40-acre Marfa II and 40-acre Fort Davis greenhouse assets, including all produce-related intellectual property – excluding the Village Farms name. The company will also transfer its product distribution facilities, employees, and operational control to Vanguard.
Following the transaction, Village Farms will continue to own its 30-acre Monahans greenhouse facility and will own and lease its 20-acre Marfa I greenhouse to Vanguard. The Marfa I site, currently expandable to 40 acres, is adjacent to 950 acres of unoccupied land, offering future expansion potential.
In Canada, Village Farms will maintain ownership and operation of its Delta greenhouses in British Columbia, comprising the 60-acre Delta 1, 25-acre Delta 2, and 25-acre Delta 3 facilities.
The Delta 1 greenhouse apparently generated approximately US$25mn in fresh produce sales in 2024, and Village Farms will continue to supply Vanguard under multi-year service and supply agreements.
Charlie Sweat, founder of Sweat Equities, has been appointed chairman of Vanguard’s management board, while DeGiglio is to serve as interim CEO of Vanguard until a permanent successor is found. Steve Ruffini, CFO of Village Farms, will also join the board.
Transformative transaction
“I am pleased to announce this transformative transaction for Village Farms, and very proud to work with Charlie Sweat and the team at Sweat Equities to drastically improve long-term upside potential for our produce business,” said DeGiglio.
”Charlie is a proven industry pioneer with an incredible track record building enterprises across the health and wellness food categories and creating value for shareholders.
“We believe this transaction will unlock tremendous long-term value for both our businesses, and are excited to gain committed new capital partners in produce and to focus more of our resources toward advancing our leadership position in global cannabis.”
Sweat commented: ”I have admired the achievements of Michael and the Village Farms team in our industry for decades, and am thrilled to form this partnership which will leverage Village’s commercial expertise to create a new leader in the fresh produce industry in North America.
”Securing a proven operating team like Village Farms was a critical first step for Vanguard, and we believe the industry and macro-economic environments are ripe to begin executing a strategy to drive accretive growth through M&A.
”The timing of this joint venture aligns perfectly with shifting consumer behaviours, and we’re positioned well to meet increased demand for healthier alternatives to processed foods.”
DeGiglio concluded: “Village Farms is all in on the future of cannabis globally, and we’re excited to begin this next chapter. This transaction monetizes one-third of our greenhouse assets, positions our produce business to thrive as an independent private entity, and provides significant expansion potential for us to continue building our leadership position and reputation as one of the largest and most respected scaled cultivators and marketers of cannabis on the planet.”
Announcing its first-quarter results for the year, Village Farms said its fresh produce sales had increased 4 per cent to US$37.4mn year on year, driven by a rise in volume from supply partners but offset by lower average selling prices.
The division’s gross margin was adversely affected by an “incremental accounting charge” of US$4.3mn as a result of dust storms that hampered its Texas greenhouses in March and April 2025. As a result, it made a net loss of US$7.8mn during the three-month period.
