What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-11 compared with 2025-11-10 · 201 added, 588 removed, 215 unchanged (79% of the section changed)

11 unchanged sentences

(“Pure Sunfarms” or “PSF”), Balanced Health Botanicals, LLC (“Balanced Health”), Rose LifeScience Inc.

(“Rose LifeScience” or “Rose”), Leli Holland B.

(“Leli” or “Leli Holland”), Village Farms Canada Limited Partnership (“VFCLP”), Village Farms L.P.

(“Rose LifeScience” or “Rose”), Village Farms International B.V.

(“VFN”), Village Farms Canada Limited Partnership (“VFCLP”), Village Farms L.P.

(“VFLP”), and VF Clean Energy, Inc.

The Company’s vision is to be recognized as an international leader in consumer products developed from plants, whereby we produce and market value-added products that are consistently preferred by consumers.

To do so, we leverage decades of cultivation expertise, investment, and experience in fresh produce into branded and wholesale cannabis products within markets with legally permissible opportunities.

In Canada, we converted two produce facilities to grow cannabis for the Canadian legal adult use (recreational) market.

Our focus for our Canadian Cannabis segment is to produce high quality cannabis, leveraging our low-cost production to provide preferred products at an attractive price that address the preferred consumer segments in the market.

This market positioning, combined with our cultivation expertise, has enabled us to evolve into the top-five best-selling producer nationally and one of the few Canadian licensed producers with consistently strong operating results.

Additionally, through organic growth, exports and/or acquisitions, we have a strategy to participate in other international markets where cannabis attains legal status.

Village Farms' mission is to apply decades of innovation in intensive agriculture to lead a sustainable path forward for the global cannabis industry.

To do so, we leverage a proven track record of asset investment and development and cultivation expertise and experience in controlled environment agriculture to produce branded and wholesale cannabis products for global markets with legally permissible regulatory frameworks.

In Canada, we converted two large-scale, advanced greenhouse facilities to cannabis production to serve the Canadian legal adult use (recreational) market and international medical markets through exportation.

Through our ownership of VFN, we hold one of ten licenses to cultivate and distribute cannabis legally in the Netherlands under that country’s Controlled Cannabis Supply Chain Experiment.

In the U.S., Balanced Health is our industry-leading cannabinoid business, extending our portfolio into cannabidiol (“CBD”) and hemp-derived consumer products, and the Company also owns 2.2 million square feet of advanced greenhouse facilities in Texas which may be converted to cannabis production in the future if and when permissible by all regulatory authorities.

Our focus for Cannabis is to produce high quality cannabis, leveraging our low-cost production to provide preferred products at an attractive price that address the preferred consumer segments in the market.

This market positioning, combined with our cultivation expertise, has enabled us to evolve into a leading producer of dried flower nationally and one of the few Canadian licensed producers with consistently strong operating results.

Through strategic and disciplined organic growth, expansion of export markets and/or acquisitions, we intend to participate in other international markets where cannabis attains legal status.

In September 2021, our Canadian Cannabis business began exporting cannabis products to Australia for that country’s medical market.

In March 2022, our Canadian Cannabis business received European Union Good Manufacturing Practice (“EU GMP”) certification for Pure Sunfarms’ 1.1 million square foot Delta 3 cannabis facility located in Delta, British Columbia (“B.C.”) which permits Pure Sunfarms to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification.

In late 2022, Pure Sunfarms commenced exports to Israel, in 2023 Pure Sunfarms began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries, and in 2025 it began exporting cannabis products to New Zealand.

As a result of the typically higher margins in international medical markets, we expect international expansion to enhance our profitability while expanding our brand and experience into emerging legal cannabis markets.

During September 2024, we completed our acquisition of the remaining 15% equity ownership interest in Leli Holland.

Through our ownership of Leli Holland, we hold one of ten licenses to cultivate and distribute cannabis legally in the Netherlands under that country’s Controlled Cannabis Supply Chain Experiment, with sales beginning in the first quarter of 2025.

In the U.S., Balanced Health is our industry-leading cannabinoid business, extending our portfolio into cannabidiol (“CBD”) and hemp-derived consumer products.

We also cultivate tomatoes and market them through Village Farm Fresh (a Vanguard Holdings Company) under the Village Farms Fresh (“VF Fresh”) brand which sells to food distribution companies and mass retail stores.

Our intention is to use our assets, expertise and experience (across cannabis, hemp, CBD and produce ecosystems) to participate in the global cannabis market subject to compliance with all applicable national laws and applicable stock exchange rules.

Our Operating Segments

Canadian Cannabis Segment

Our Canadian Cannabis segment includes wholly owned Pure Sunfarms and an 80% ownership interest in Rose LifeScience.

Pure Sunfarms is one of the single largest cannabis growing operations in the world, one of the lowest-cost greenhouse producers and one of the leading flower brands in Canada.

Pure Sunfarms leverages our 30 years of experience as a vertically integrated greenhouse grower for cannabis growth opportunities in Canada with commercial distribution in all Canadian provinces and territories.

Our long-term objective for Pure Sunfarms is to be the leading low-cost, high-quality cannabis producer in Canada.

Rose is one of the top-selling licensed producers of cannabis in the Province of Quebec, as well as a prominent cannabis products commercialization expert in Quebec, acting as the exclusive, direct-to-retail sales, marketing and distribution entity for some of the best-known brands in Canada, as well as Quebec-based micro and craft growers.

Our long-term objective for our Canadian Cannabis segment is to garner and sustain a leading retail market share in Canada, as well as a leading exporter of medicinal cannabis, stemming from our position as a leading low-cost, high-quality cannabis producer in Canada and expand our Canadian success into growing international cannabis markets across the globe by becoming a leading exporter of medicinal cannabis.

Netherlands Cannabis Segment (Leli Holland)

Our Netherlands Cannabis operating segment is comprised of wholly owned subsidiary, Leli Holland.

Through Leli, we hold one of ten licenses to cultivate and distribute recreational cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program, with sales commencing in February 2025.

In March 2022, our Canadian business received European Union Good Manufacturing Practice (“EU GMP”) certification for our 1.1 million square foot Delta 3 cannabis facility located in Delta, British Columbia (“B.C.”) which permits us to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification.

In late 2022, we commenced exports to Israel.

In 2023, we began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries.

In 2025, we began exporting cannabis products to New Zealand.

As a result of the typically higher margins in international markets (predominantly due to lower taxation compared with Canada), we expect international expansion to enhance our profitability while expanding our brand and experience into emerging legal cannabis markets.

We also cultivate tomatoes and market them through Village Farms Fresh (a Vanguard Holdings Company) under the Village Farms Fresh (“VF Fresh”) brand, which sells to mass retail grocery stores and food distribution companies.

Change in Our Operating Segments

During the first quarter of 2026, the Company realigned our structure toward a unified cannabis operating model, including changes and additions to our leadership team, to gain operational efficiencies and better align our resources with customer and market opportunities.

As a result of the reorganization, the Company revised its reportable segment structure to reflect how the Chief Executive Officer, as chief operating decision maker ("CODM"), manages the business, allocates resources, and assesses performance.

Therefore, the Company's operations are now organized, managed and classified into one reportable segment - Cannabis.

The Company’s remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Other.

Cannabis Segment

Cannabis segment includes wholly owned subsidiary, Balanced Health.

Our Cannabis segment includes wholly owned Pure Sunfarms, VFN, Balanced Health, and an 80% ownership interest in Rose LifeScience.

Pure Sunfarms is one of the single largest cannabis growing operations in the world, one of the lowest-cost greenhouse producers and owns several of the leading flower brands in Canada.

We leverage our 30 years of experience as a vertically integrated greenhouse grower for cannabis growth opportunities in Canada with commercial distribution in all Canadian provinces and territories.

Our long-term objective for Canada is to be the leading low-cost, high-quality cannabis producer.

Our Netherlands cannabis reporting unit is comprised of wholly owned subsidiary, VFN.

Through VFN, we hold one of ten licenses to cultivate and distribute recreational cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program, with sales commencing in February 2025.

Balanced Health is one of the leading cannabinoid brands and e-commerce platforms in the United States.

Balanced Health develops and sells high-quality CBD and hemp-based health and wellness products, distributing its diverse portfolio of consumer products through its top-ranked e-commerce platform, CBDistillery.

Produce Segment

Our Produce segment currently consists of VFCLP after the sales transfer with Vanguard Holdings in May 2025.

Through our produce segment, we grow premium-quality, greenhouse-grown tomatoes in Canada.

The tomato products are grown in sophisticated, highly intensive agricultural greenhouse facilities located in British Columbia.

On May 30, 2025, the Company closed on the transformative transaction to privatize certain assets and operations of its Produce segment, including its Marfa II and Fort Davis greenhouses, and all of its produce distribution centers, through a series of asset and lease transfers.

The Company determined that the assets that had been disposed of met the criteria for discontinued operations presentation.

For all periods presented, the operating results associated with the assets disposed of have been reclassified into net income (loss) from discontinued operations, net of income taxes, in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The associated assets and liabilities have been reflected as current and long-term assets and liabilities of discontinued operations in the Condensed Consolidated Statements of Financial Position, and the cash flows from the Company’s discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows for all periods presented.

For further information on the Transaction please refer to our Form 8-K filed with the SEC on June 5, 2025.

The information contained within such Form 8-K is incorporated by reference herein.

Clean Energy Segment

Our Clean Energy segment is comprised of wholly owned subsidiary, VF Clean Energy Inc.

VFCE, which has partnered with Terreva Renewables (formerly Mas Energy) for the Delta RNG Project based on VFCE’s 20-year contract (including a five-year option to extend) with the City of Vancouver to capture landfill gas at the Delta, B.C.

landfill site (the "Delta RNG Project").

The Delta RNG Project, which commenced operations in 2024, converts VFCE’s landfill gas into high-demand renewable natural gas ("RNG") through a state-of-the-art facility.

Terreva Renewables sells the renewable natural gas and VFCE receives a portion of the revenue in the form of a royalty.

Corporate and Other

Other is comprised of the previously reported Produce and Clean Energy segments and includes operations that are not reported in the Company’s Cannabis segment.

Corporate expenses reflect the operations costs that are not allocated to our reporting units.

Recent Developments and Updates

Canadian Cannabis

• Company continues to maintain a top five overall market share position in Canada and the number two position in dried flower despite planned reductions in sales of lower-margin SKUs 1 ;

• Significantly surpassed the high end of its targeted gross margin range of 30-40%, marking the third consecutive quarter meeting or exceeding the target range, contributing to record quarterly and YTD adjusted EBITDA performance;

• Introduced several new and unique packaging innovations to the Canadian market, including the launch of a one-way aroma valve built directly into its dried flower packaging, windowed packaging for its flower products which enables

consumers to see product before purchase, and a proprietary built-in matchbox accessory for its pre-roll offerings to meet growing demand for ready-to-enjoy cannabis experiences

• Published groundbreaking peer-reviewed research in Scientific Reports (Nature Portfolio), highlighting the natural variability of THC potency within cannabis plants, reinforcing a need for a greater focus on product quality versus potency and more transparent and accurate labeling across the industry;

• Subsequent to quarter end, began expansion of cultivation capacity in its Delta 2 greenhouse to meet increasing demand in Canadian and international export markets.

The expansion is being funded with existing cash on hand and is expected to yield an incremental 40 metric tons of annualized cannabis production, expanding capacity by approximately 33%.

• Surpassed the high end of its targeted gross margin range for cannabis of 30-40% for the fourth consecutive quarter;

and recorded positive EPS from continuing operations for the fourth consecutive quarter.

• Maintained a top five overall market share position in the Canadian market, and continued to hold the number one market share position in dried flower.

The Company’s Pure Sunfarms brand expanded its market share position for the 15th consecutive month in April, reflecting improving consumer preference for the Company’s strains following recent introductions of packaging innovations that showcase the Company’s flower quality and aromas 1 .

• International export sales from Canada increased 171% year-over-year to a record high of $14.6 million.

The Company believes it remains the largest exporter of medical cannabis to Europe, with three of the top five leading cultivars in Germany and four of the top 10 through our distribution partners 2 .

• The Company recently completed facility upgrades at its 4.8 million square foot production campus in Delta, British Columbia, the Company now believes it operates the world’s largest EU-GMP certified cannabis facility.

• Began planting the first half of its Delta 2 greenhouse expansion in Canada, which is expected to begin contributing to sales late in the second quarter of 2026.

The full expansion is expected to yield an incremental 40 metric tonnes of annualized cannabis production, expanding Canadian capacity by approximately 33% once completed in 2027.

• The Company expects to commence all operations at its Phase II facility in the Netherlands during Q2 and ramp to full capacity by the end of 2026.

Once operating at full capacity, the Phase II facility is expected to quintuple total Netherlands production to approximately 10 metric tonnes annually.

Based on estimated retail sales from HiFyre, other third parties and provincial boards.

International Medical Cannabis (Reported Within Canadian Cannabis)

• International export sales increased 758% year-over-year, driven by continued strength of demand in Germany and steady performance across other international markets;

• Company believes that it remains the largest exporter of medical cannabis to Europe, and that it has gained market share sequentially in Germany in each of the past four quarters 1

• Company continues to distribute several leading cultivars in Germany through third-party partners 2

Based on German government data and Company estimates

Based on Company estimates and rankings compiled by German outlet Flowzz.

Netherlands Cannabis (Leli Holland)

• Operations in the Company’s Phase I facility in Drachten have now ramped up to full capacity, while demonstrating strong profitability and cash flow generation;

• Leli Holland products are now represented in 91% of participating coffeeshops;

representing increased market penetration sequentially as compared to the second quarter;

• The Company has continued to introduce new products into the market, including hash offerings and pre-rolls and it expects to launch additional products for coffeeshops during the fourth quarter;

• Construction of the Company’s Phase II facility in Groningen remains on track to be operational in Q1 2026.

When completed, the Phase II facility is expected to quintuple total annualized production capacity to approximately 10,000 kilograms.

• The Company's application for a Texas medicinal marijuana license remains pending review by the Department of Public Services.

New license awards are expected to be granted on December 1, 2025.

If awarded, the Company plans to work with its listing authority to structure an acceptable ownership structure and comply with all applicable regulatory requirements.

• On September 29, 2025, the Company’s Board of Directors unanimously approved a US$10 million share repurchase authorization for up to 5,687,000 common shares (five percent of the Company’s issued and outstanding common shares at the date of announcement).

• On November 6, 2025, the Company announced the hiring of Brian Ellis to the role of Chief Information and Technology Officer (CITO) to lead the Company’s global technology and information strategy.

Ellis brings over 25 years of enterprise architecture, IT strategy, and large-scale digital transformation experience across various global industries, including roles at Nike, Topgolf Callaway, and Booking.com.

Corporate and Other

• Began a succession planning process for our Chief Financial Officer, Steve Ruffini, who will remain as CFO until a permanent replacement has been identified.

Ruffini will remain an employee of the Company to help ensure a smooth transition of his CFO responsibilities, and he is expected to be appointed to a new leadership position focused on evaluating strategic M&A opportunities.

• Favorably amended and extended its loan with its long-term lender, Farm Credit Canada (FCC).

The Company improved the interest rate on the loan by 50 basis points and extended the maturity date by four years to February 3, 2031.

loan carries a variable interest rate currently below 7.0%, with a current balance of US $15.4 million.

All other material terms of the loan remain unchanged.

• On April 23, 2026, President Trump issued an executive order to (1) immediately place both FDA-approved products containing marijuana and marijuana products regulated by a state medical marijuana license in Schedule III of the Controlled Substances Act, and (2) initiate an expedited administrative hearing process to consider the broader rescheduling of marijuana from Schedule I to Schedule III, which is expected to commence on June 29, 2026.

We believe we are poised to benefit from President Trump's Executive Order, which, if the broader rescheduling is enacted as anticipated, would represent a consequential step in modernizing U.S.

cannabis policy and support the development of a regulatory framework more aligned with international drug policies.

Presentation of Financial Results

Our consolidated results of operations for the three and nine months ended September 30, 2025 and 2024 presented below reflect the operations of our consolidated wholly-owned subsidiaries, our 70% ownership interest in Rose LifeScience through March 31, 2024, our 80% ownership interest in Rose LifeScience beginning on April 1, 2024, our 85% ownership interest in Leli through September 22, 2024, and our 100% ownership interest in Leli beginning on September 23, 2024.

Our results of operations for the three months ended March 31, 2026 and 2025 presented below reflect the operations of our consolidated wholly-owned subsidiaries and our 80% ownership interest in Rose LifeScience.

Foreign Currency Exchange Rates

2 unchanged sentences

All references to “dollars” or “$” are to U.S.

The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of September 30, 2025, September 30, 2024, and December 31, 2024.

The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of March 31, 2026, March 31, 2025, and December 31, 2025.

Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates.

2 unchanged sentences

dollars is shown below:

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

December 31, 2025

Three-month period ended

Nine-month period ended

RESULTS OF OPERATIONS

Consolidated Financial Performance

Consolidated Results of Operations

(In thousands of U.S.

dollars, except per share amounts, and unless otherwise noted)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of sales

4 unchanged sentences

Other (loss) income

Goodwill and intangible asset impairments

Income (loss) before taxes and equity method investment income

7 unchanged sentences

Adjusted EBITDA from continuing operations

Adjustments attributable to discontinued operations

Adjusted EBITDA (1)

Basic income (loss) per share attributable to Village Farms International, Inc.

8 unchanged sentences

Diluted income (loss) per share attributable to Village Farms International, Inc.

(1) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP.

Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers.

Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance.

Adjusted EBITDA includes the Company’s 70% interest in Rose LifeScience through March 31, 2024, 80% interest in Rose LifeScience beginning on April 1, 2024, 85% interest in Leli through September 22, 2024, and our 100% interest in Leli beginning on September 23, 2024.

We caution that our results of operations for the three and nine months ended September 30, 2025 and 2024 may not be indicative of our future performance.

Discussion of Financial Results

A discussion of our consolidated results for the three and nine months ended September 30, 2025 and 2024 is included below.

The consolidated results include all five of our operating segments:

Canadian Cannabis, U.

Cannabis, Cannabis Netherlands,

Produce, and Clean Energy, along with public company expenses.

For a discussion of our segmented results, please see “Segmented Results of Operations” below.

CONSOLIDATED RESULTS

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Sales for the three months ended September 30, 2025 were $66,741 compared with $54,938 for the three months ended September 30, 2024.

The increase of $11,803, or 21%, was primarily due to an increase in Canadian Cannabis sales of $10,120 due to the growth of our international business, and first year sales from Leli of $3,587, partially offset by a decrease in Produce sales of $1,499, due to a commission charged on produce sales as a result of the supply agreement with Vanguard Food LP., and a decrease in U.S.

Cannabis sales of $606.

For additional information, refer to “Segmented Results of Operations” below.

Cost of Sales

Cost of sales for the three months ended September 30, 2025 were $34,803 compared with $41,301 for the three months ended September 30, 2024.

The decrease of $6,498, or 16%, was primarily due to a decrease in Canadian Cannabis cost of sales of $6,236, a decrease in U.S.

Cannabis cost of sales of $95, and a decrease in Produce cost of sales of $2,097, partially offset by the cost of first year sales of Leli of $1,928.

For additional information, refer to “Segmented Results of Operations” below.

Gross profit for the three months ended September 30, 2025 was $31,938 compared with $13,637 for the three months ended September 30, 2024.

The increase of $18,301, or 134%, was primarily due to an increase in gross profit in Canadian Cannabis of $16,356, the gross profit on first year sales from Leli of $1,659, and an increase in gross profit in Produce of $598.

For additional information, refer to “Segmented Results of Operations” below.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended September 30, 2025 were $15,599 (23% of sales) compared with $14,565 (27% of sales) for the three months ended September 30, 2024.

For additional information, refer to “Segmented Results of Operations” below.

For the Three Months Ended September 30,

Selling, general and administrative expenses

Share-based compensation

Total selling, general and administrative expenses

Interest Expense

Interest expense for the three months ended September 30, 2025 was $646 compared with $779 for the three months ended September 30, 2024.

Interest Income

Interest income for the three months ended September 30, 2025 and was $360 compared with $229 for the three months ended September 30, 2024.

Other (Loss) Income

Other loss for the three months ended September 30, 2025 was $282 compared with other income of $379 for the three months ended September 30, 2024.

Income (Loss) Before Taxes and Equity Method Investment Income

Income before taxes for the three months ended September 30, 2025 was $15,533 compared with a loss before taxes of $747 for the three months ended September 30, 2024.

The change of $16,280 was primarily due to the improved gross profit.

Income (Loss) from Discontinued Operations, Net of Tax

Income (loss) from discontinued operations, net consists of the following:

For the Three Months Ended September 30,

(Loss) income from discontinued operations, net of tax

Net (loss) income from discontinued operations, net of tax

Net Income (Loss) Attributable to Village Farms International, Inc.

Net income attributable to Village Farms International, Inc.

shareholders for the three months ended September 30, 2025 was $10,217 compared with a net loss of $820 for the three months ended September 30, 2024.

The increase of $11,037 was primarily due to the improved gross margin, partially offset by an increase in the provision for income taxes of $4,623.

Adjusted EBITDA

Adjusted EBITDA for the three months ended September 30, 2025 was $20,288 compared with $5,302 for the three months ended September 30, 2024.

The increase of $14,986, or 283%, was driven primarily by higher margins in Canadian Cannabis.

For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Sales for the nine months ended September 30, 2025 were $166,320 compared with $150,522 for the nine months ended September 30, 2024.

The increase of $15,798, or 10%, was primarily due to an increase in Canadian Cannabis sales of $11,284, first year sales from Leli of $6,556, and an increase in Produce sales of $1,336, partially offset by a decrease in U.S.

Cannabis sales of $1,695, For additional information, refer to “Segmented Results of Operations” below.

Cost of Sales

Cost of sales for the nine months ended September 30, 2025 were $97,860 compared with $112,031 for the nine months ended September 30, 2024.

The decrease of $14,171, or 13%, was primarily due to a decrease in Canadian Cannabis cost of sales of $14,802, a decrease in Produce cost of sales of $1,852, and a decrease in U.S.

Cannabis cost of sales of $889, partially offset by the cost of first year sales on Leli of $3,260.

For additional information, refer to “Segmented Results of Operations” below.

Gross profit for the nine months ended September 30, 2025 was $68,460 compared with $38,491 for the nine months ended September 30, 2024.

The increase of $29,969, or 78%, was primarily due to an increase in gross profit in Canadian Cannabis of $26,086, and gross margin on the first year sales of Leli of $3,296, partially offset by a decrease in gross profit in U.S.

Cannabis of $806.

For additional information, refer to “Segmented Results of Operations” below.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine months ended September 30, 2025 were $45,629 (27% of sales) compared with $45,871 (30% of sales) for the nine months ended September 30, 2024.

For additional information, refer to “Segmented Results of Operations” below.

For the Nine Months Ended September 30,

Selling, general and administrative expenses

Share-based compensation

Total selling, general and administrative expenses

Interest Expense

Interest expense for the nine months ended September 30, 2025 was $2,162 compared with $2,594 for the nine months ended September 30, 2024.

The decrease of $432 or 17%, was due to a decrease in the overall borrowing base and a decrease in the interest rates on the Company's various debt instruments.

Interest Income

Interest income for the nine months ended September 30, 2025 and was $544 compared with $757 for the nine months ended September 30, 2024.

Other Income (Expense)

Other income for the nine months ended September 30, 2025 was $4,169 compared with other expense of $528 for the nine months ended September 30, 2024.

Other income was primarily due to favorable vendor settlements relating to the partial recovery of operational losses from the Tomato Brown Rugose Fruit Virus ("ToBRFV") infestation.

Goodwill and Intangible Asset Impairments

Goodwill and Intangible Assets Impairments for the nine months ended September 30, 2025 were $0 compared to $11,939 for the nine months ended September 30, 2024.

The impairment in the prior year period was primarily related to the U.S.

Cannabis reporting unit as a result of recent historical performance which underperformed relative to budget, a revised June 30, 2024 forecast which resulted in a shortfall compared to the March 31, 2024 forecast, the new restrictions on CBD sales in an additional eight states at July 1, 2024, and the proliferation of unregulated hemp-derived products on the market which continues to challenge market share for the CBD industry.

Income (Loss) Before Taxes and Equity Method Investment Income

Income before taxes for the nine months ended September 30, 2025 was $26,852 compared with a loss before taxes of $21,557 for the nine months ended September 30, 2024.

The improvement of $48,409 was primarily due to the improved gross margins and a favorable vendor settlement during the nine months ended September 30, 2025 and an impairment charge of $11,939 during the nine months ended September, 2024.

Income (Loss) From Discontinued Operations, Net of Tax

Income (loss) from discontinued operations, net consists of the following:

For the Nine Months Ended September 30,

Loss from discontinued operations, net of tax

Gain on sale of assets, net of tax

Net income (loss) from discontinued operations, net of tax

Net Income (Loss) Attributable to Village Farms International, Inc.

Net income attributable to Village Farms International, Inc.

shareholders for nine months ended September 30, 2025 was $30,011 compared with a net loss of $27,221 for the nine months ended September 30, 2024.

The change of $57,232 was primarily due to the higher gross margin during the nine months ended September 30, 2025, a favorable vendor settlement during the nine months ended September 30, 2025, an improvement on income (loss) from discontinued operations, net of tax, of $15,771, which includes the gain on sale, net of tax, of $19,985, and an impairment charge of $11,939 during the nine months ended September 30, 2024.

Adjusted EBITDA

Adjusted EBITDA for the nine months ended September 30, 2025 was $33,629 compared with $5,334 for the nine months ended September 30, 2024.

The increase of $28,295, or 530%, was due primarily to higher margins in Canadian Cannabis and the favorable vendor settlement in Produce.

For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”.

SEGMENTED RESULTS OF OPERATIONS

Segment Results of Operations

During the first quarter of 2026, the Company revised its reportable segment structure - Cannabis - to reflect how the CODM manages the business, allocates resources, and assesses performance.

The Company’s remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Other.

Segment reporting is prepared on the same basis that the Company’s Chief Executive Officer, who is the CODM, manages the business, makes operating decisions and assesses performance.

The Cannabis segment, which is comprised of the previously reported Canadian Cannabis, U.

Cannabis, and Cannabis - Netherlands segments, produces and supplies cannabis and CBD-based health and wellness products to be sold to consumers via provincial governments, coffee shops, licensed providers, and direct to consumers in the United States.

Other is comprised of the previously reported Produce and Clean Energy segments and includes operations that are not reported in the Company’s Cannabis segment.

Corporate expenses reflect the operations costs that are not allocated to our reporting units.

(In thousands of U.S.

dollars, except per share amounts, and unless otherwise noted)

For The Three Months Ended September 30, 2025

Cannabis Canada

Cannabis U.S.

Cannabis Netherlands

Cost of sales

Selling, general and administrative expenses

Other (expense) income, net

Income (loss) before taxes and equity method investment income

Provision for income taxes

Equity method investment income, net of tax

Income (loss) from continuing operations

Loss from discontinued operations net of tax

Income (loss) including non-controlling interests

net income attributable to non-controlling interests, net of tax

Net income (loss)

Adjusted EBITDA from continuing operations

Adjustments attributable to discontinued operations

Adjusted EBITDA (1)

Basic income (loss) per share from continuing operations

Basic income per share from discontinued operations

Basic income (loss) per share

Diluted income (loss) per share from continuing operations

Diluted income per share from discontinued operations

Diluted income (loss) per share

For The Three Months Ended September 30, 2024

Cannabis Canada

Cannabis U.S.

Cannabis Netherlands

For The Three Months Ended March 31, 2026

Cost of sales

1 unchanged sentence

Other expense, net

Goodwill and intangible asset impairments

Income (loss) before taxes and equity method investment income

(Provision for) recovery of income taxes

Provision for income taxes

Equity method investment income, net of tax

Income (loss) from continuing operations

Income from discontinued operations net of tax

Income (loss) including non-controlling interests

net (income) loss attributable to non-controlling interests, net of tax

net loss attributable to non-controlling interests, net of tax

Net income (loss)

Adjusted EBITDA from Continuing Operations (1)

Adjustments attributable to discontinued operations

Adjusted EBITDA (1)

Basic income (loss) per share from continuing operations

Basic income per share from discontinued operations

Basic income (loss) per share

Diluted income (loss) per share from continuing operations

Diluted income per share from discontinued operations

Diluted income (loss) per share

For The Nine Months Ended September 30, 2025

Cannabis Canada

Cannabis U.S.

Cannabis Netherlands

For The Three Months Ended March 31, 2025

Cost of sales

Selling, general and administrative expenses

Other income (expense), net

Other (expense) income, net

Income (loss) before taxes and equity method investment income

7 unchanged sentences

Adjusted EBITDA from continuing operations (1)

Adjustments attributable to discontinued operations

Adjusted EBITDA (1)

Basic income (loss) per share from continuing operations

4 unchanged sentences

Diluted income (loss) per share

For The Nine Months Ended September 30, 2024

Cannabis Canada

Cannabis U.S.

Cannabis Netherlands

Cost of sales

Selling, general and administrative expenses

Other expense (income), net

Goodwill and intangible asset impairments

(Loss) income before taxes and equity method investment income

(Provison for) recovery of income taxes

Equity method investment income, net of tax

(Loss) income from continuing operations

Loss from discontinued operations net of tax

(Loss) income including non-controlling interests

net (income) loss attributable to non-controlling interests, net of tax

Net (loss) income

Adjusted EBITDA from continuing operations

Adjustments attributable to discontinued operations

Adjusted EBITDA (1)

Basic (loss) income per share from continuing operations

Basic loss per share from discontinued operations

Basic (loss) income per share

Diluted (loss) income per share from continuing operations

Diluted loss per share from discontinued operations

Diluted (loss) income per share

(1) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP.

Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers.

CANADIAN CANNABIS SEGMENT RESULTS

The Canadian Cannabis segment consists of Pure Sunfarms and Rose LifeScience.

The comparative analysis for Canadian Cannabis is based on the consolidated results of Pure Sunfarms and our interest in Rose LifeScience for the three and nine months ended September 30, 2025 and 2024.

Beginning on April 1, 2024, our interest in Rose LifeScience increased from 70% to 80%, which is reflected in the results presented below.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Canadian Cannabis net sales for the three months ended September 30, 2025 were $46,583 compared with $36,463 for the three months ended September 30, 2024.

The increase of $10,120, or 28%, was driven by an increase in international sales of $10,498, primarily driven by continued strength in export volumes to Germany, partially offset by a decrease in net branded sales of $431, reflecting a planned shift away from value-based product offerings.

Canadian Cannabis continues to pay a burdensome excise tax on its branded sales (sales to provincial distributors).

For the three months ended September 30, 2025, the Company incurred excise duties of $15,712 (C$21,647), or 37% of gross branded sales, compared with $17,674 (C$24,109), or 39% of gross branded sales, for the three months ended September 30, 2024.

The decrease of $1,962 (C$2,462), or 11%, was due to a decrease in kilograms sold in the branded channel.

The Canadian excise duty is our single largest cost of participating in the branded adult-use market in Canada.

For the three months ended September 30, 2025, 58% of net sales were generated from branded flower, pre-rolls and cannabis derivative products compared with 75% for the three months ended September 30, 2024.

Non-branded, international, and other sales accounted for 42% of Canadian Cannabis net sales for the three months ended September 30, 2025, compared with 25% for the three months ended September 30, 2024.

The net average selling price of branded flower and pre-roll formats increased in 2025 compared to 2024.

Excluding pre-roll formats, the average net selling price of branded flower increased by 6% in 2025 due to a lower ratio of sales for our value brand Fraser Valley Weed Co.

The net average selling price of bulk non-branded flower increased by 45%, due to a reduced need to move aged flower inventory compared to 2024.

The net average selling price of International sales decreased by 13% due to a shift in product mix favoring bulk flower over packaged flower.

The following table presents sales by Canadian Cannabis revenue stream, together with the impact of the excise tax, in U.S.

dollars and Canadian dollars, for the three months ended September 30, 2025 and 2024:

For the Three Months Ended September 30,

(in thousands of U.S.

Branded sales

Non-branded sales

International sales

For the Three Months Ended September 30,

(in thousands of Canadian dollars)

Branded sales

Non-branded sales

International sales

Cost of Sales

Canadian Cannabis cost of sales for the three months ended September 30, 2025 was $20,628 compared with $26,864 for the three months ended September 30, 2024.

The decrease of $6,236, or 23%, was primarily due to a decrease in volume (kilograms) packaged and sold of our branded products and a shift in International sales mix favoring bulk flower which has a lower average cost per gram over packaged flower.

Canadian Cannabis gross profit for the three months ended September 30, 2025 was $25,955, a 170% increase compared to $9,599 for the three months ended September 30, 2024.

Canadian Cannabis gross margin for the three months ended September 30, 2025 was 56% compared with 26% for the three months ended September 30, 2024.

The increase in gross margin was due to higher sales volume of bulk flower in International sales, as well as lower sales of value brands within the branded sales category.

Selling, General and Administrative Expenses

Canadian Cannabis selling, general and administrative expenses for the three months ended September 30, 2025 were $9,140, or 20% of sales, compared with $7,983, or 22% of sales, for the three months ended September 30, 2024.

Canadian Cannabis net income for the three months ended September 30, 2025 was $11,678 compared with net income of $1,168 for the three months ended September 30, 2024.

The increase in net income was primarily due to the higher margin, partially offset by an increase in the tax provision expense of $4,178.

Adjusted EBITDA

Adjusted EBITDA for Canadian Cannabis for the three months ended September 30, 2025 was $19,310 compared with $4,752 for the three months ended September 30, 2024.

The increase of $14,558, or 306%, was primarily due to higher sales at a higher margin.

For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net (Income) Loss to Adjusted EBITDA”.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Canadian Cannabis net sales for the nine months ended September 30, 2025 were $125,938 compared with $114,654 for the nine months ended September 30, 2024.

The increase of $11,284, or 10%, was driven by an increase in international sales of $24,871, primarily due to continued strength in export volumes to Germany, partially offset by a decrease in net branded sales, reflecting a shift away from value-based product offerings.

Canadian Cannabis continues to pay a burdensome excise tax on its branded sales (sales to provincial distributors).

For the nine months ended September 30, 2025, the Company incurred excise duties of $44,476 (C$62,167), or 37% of gross branded sales, compared with $57,193 (C$77,788), or 40% of gross branded sales, for the nine months ended September 30, 2024.

The decrease of $12,717 (C$15,621), or 22%, was due to a decrease in kilograms sold in the branded channel and the impact of exchange rate fluctuations.

(1) Adjusted EBITDA from continuing operations is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP.

Therefore, Adjusted EBITDA from continuing operations may not be comparable to similar measures presented by other issuers.

Management believes that Adjusted EBITDA from continuing operations is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance.

Adjusted EBITDA from continuing operations includes the Company’s 80% interest in Rose LifeScience.

We caution that our results of operations for the three months ended March 31, 2026 and 2025 may not be indicative of our future performance.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Sales for the three months ended March 31, 2026 and 2025 were as follows:

Classification

March 31, 2026

March 31, 2025

Canadian Branded (1)

Canadian Non-Branded

International Exports

Netherlands Branded

Total Cannabis

Total Revenue

(1) Canadian Branded revenues are shown net of excise tax on products.

Excise tax on products was $15,903 and $13,947 for the three months ended March 31, 2026 and 2025, respectively.

The increase in consolidated revenues of $10,558, or 27%, was primarily due to an increase in International Exports of $9,183, or 171%, driven by continued growth in export volumes to Germany, partially offset by a decrease in the net average selling price of 12% due to a shift in product mix in favor of bulk flower over packaged flower.

For the three months ended March 31, 2026, International Export sales represented 29% of revenue, compared with 14% of revenue for the three months ended March 31, 2025.

Canadian Branded Sales increased by $1,087, or 5%, to $23,848, or 47% of sales, from $22,761, or 57% of sales, primarily due to an increase in volume while the average net selling price remained in line with the prior period.

Netherlands Branded sales increased by $2,177 over the prior year, as the prior year only had one month of sales.

Canadian Non-Branded sales decreased by $902, or 14%, due to a decrease in volume.

Cannabis decreased by $771, or 20%, due to lower direct-to-consumer sales resulting from the proliferation of unregulated hemp-derived products on the market and the continuing effect of changes in state regulations restricting sales.

We continue to pay a burdensome excise tax on our Canadian Branded sales (sales to provincial distributors).

For the three months ended March 31, 2026, the Company incurred excise duties of $15,903, or 40% of gross Canadian Branded sales, compared with $13,947, or 38% of gross Canadian Branded sales, for the three months ended March 31, 2025.

The increase of $1,961, or 14%, was due to an increase in kilograms sold in the Canadian Branded channel.

The Canadian excise duty is our single largest cost of participating in the branded adult-use market in Canada.

For the nine months ended September 30, 2025, 59% of net sales were generated from branded flower, pre-rolls and cannabis derivative products compared with 76% for the nine months ended September 30, 2024.

Non-branded, international, and other sales accounted for 41% of Canadian Cannabis net sales for the nine months ended September 30, 2025, as compared with 24% for the nine months ended September 30, 2024.

The net average selling price of branded flower and pre-roll formats increased in 2025 compared to 2024.

Excluding pre-roll formats, the average net selling price of branded flower increased by 6% in 2025 due to a lower ratio of sales for our value brand Fraser Valley Weed Co.

The net average selling price of bulk non-branded flower increased by 38%, due primarily to a reduced need to move aged flower inventory compared to 2024.

The net average selling price of International sales decreased by 10% due to a shift in product mix favoring bulk flower over packaged flower.

The following table presents sales by Canadian Cannabis revenue stream, together with the impact of the excise tax, in U.S.

dollars and Canadian dollars, for the nine months ended September 30, 2025 and 2024:

For the Nine Months Ended September 30,

(in thousands of U.S.

Branded sales

Non-branded sales

International sales

For the Nine Months Ended September 30,

(in thousands of Canadian dollars)

Branded sales

Non-branded sales

International sales

Cost of Sales

Canadian Cannabis cost of sales for the nine months ended September 30, 2025 was $70,040 compared with $84,842 for the nine months ended September 30, 2024.

The decrease of $14,802, or 17%, was primarily due to a decrease in volume (kilograms) packaged and sold of our branded and non-branded products and a shift in International sales mix favoring bulk flower which has a lower average cost per gram over packaged flower.

Canadian Cannabis gross profit for the nine months ended September 30, 2025 was $55,898, a 88% increase compared to $29,812 for the nine months ended September 30, 2024.

Canadian Cannabis gross margin for the nine months ended September 30, 2025 was 44% compared with 26% for the nine months ended September 30, 2024.

The increase in gross margin was due to higher sales volume of bulk flower in International sales, as well as lower sales of value brands within the branded sales category.

Selling, General and Administrative Expenses

Canadian Cannabis selling, general and administrative expenses for the nine months ended September 30, 2025 were $26,506, or 21%, of sales compared with $24,436, or 21%, of sales for the nine months ended September 30, 2024.

The increase of $2,070 was primarily due to higher commercial and marketing expenses and incremental integration costs.

Canadian Cannabis net income for the nine months ended September 30, 2025 was $21,199 compared with net income of $3,399 for the nine months ended September 30, 2024.

The increase in net income was primarily due to the improved margins, partially offset by an increase in the tax provision expense of $6,824 and an increase in selling, general and administrative expenses.

Adjusted EBITDA

Adjusted EBITDA for Canadian Cannabis for the nine months ended September 30, 2025 was $37,868 compared with $13,643 for the nine months ended September 30, 2024.

The increase of $24,225, or 178%, was primarily due to the higher margin.

For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”.

CANNABIS SEGMENT RESULTS

Cannabis segment consists of Balanced Health.

For the three and nine months ended September 30, 2025 and 2024, U.S.

Cannabis financial results are based on the results of Balanced Health.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Cannabis net sales for the three months ended September 30, 2025 were $3,337 compared with $3,943 for the three months ended September 30, 2024.

The decrease of $606, or 15%, was primarily due to lower direct-to-consumer sales resulting from the proliferation of unregulated hemp-derived products on the market and changes in state regulations restricting sales.

Cannabis sales were generated in the United States, with gross sales composed of 94% e-commerce sales and 6% retail sales.

Cost of Sales

Cannabis cost of sales for the three months ended September 30, 2025 was $1,348 compared with $1,443 for the three months ended September 30, 2024.

The decrease of $95, or 7%, was primarily due to lower sales.

U.S Cannabis gross profit for the three months ended September 30, 2025 decreased $511, or 20%, to $1,989, or a 60% gross margin, compared with $2,500, or a 63% gross margin, for the three months ended September 30, 2024.

Selling, General and Administrative Expenses

Cannabis selling general and administrative expenses for the three months ended September 30, 2025 were $2,425 compared with $2,692 for the three months ended September 30, 2024.

The decrease of $267, or 10%, was due to more efficient marketing and brand spending as well as favorable contract renegotiations.

Cannabis net loss for the three months ended September 30, 2025 was $439 compared with a net loss of $192 for the three months ended September 30, 2024.

The increase of $247 was primarily due to lower sales at a lower margin.

Adjusted EBITDA

Cannabis adjusted EBITDA for the three months ended September 30, 2025 was ($332) compared with ($159) for the three months ended September 30, 2024.

The decrease of $173 was primarily due lower sales at a lower margin .

For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Cannabis net sales for the nine months ended September 30, 2025 was $11,082 compared with $12,777 for the nine months ended September 30, 2024.

The decrease of $1,695, or 13%, was primarily due to new restrictions on sales in an additional eight states beginning July 1, 2024 and lower direct-to-consumer sales resulting from the proliferation of unregulated hemp-derived products on the market.

Cannabis sales were generated in the United States, with gross sales composed of 94% e-commerce sales and 6% retail sales.

Cost of Sales

Cannabis cost of sales for the nine months ended September 30, 2025 was $4,064 compared with $4,953 for the nine months ended September 30, 2024.

The decrease of $889, or 18%, was primarily due to lower sales and cost efficiencies from the internalization of our gummy manufacturing.

U.S Cannabis gross profit for the nine months ended September 30, 2025 decreased $806, or 10%, to $7,018, or a 63% gross margin, compared with $7,824, or a 61% gross margin, for the nine months ended September 30, 2024.

Selling, General and Administrative Expenses

Cannabis selling general and administrative expenses for the nine months ended September 30, 2025 were $7,405 compared with $9,058 for the nine months ended September 30, 2024.

The decrease of $1,653, or 18%, is due to more efficient marketing and brand spending as well as favorable contract renegotiations.

Cannabis net loss for the nine months ended September 30, 2025 was $607 compared with a net loss of $13,173 for the nine months ended September 30, 2024.

The decrease of $12,566 was primarily due to an impairment charge on goodwill and intangible assets taken in the nine months ended September 30, 2024 of ($11,939) that did not recur in 2025.

Adjusted EBITDA

Cannabis adjusted EBITDA for the nine months ended September 30, 2025 was ($173) compared with ($1,014) for the nine months ended September 30, 2024.

The improvement of $841 was primarily due to the lower selling, general, and administrative expenses.

For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”.

NETHERLANDS CANNABIS SEGMENT RESULTS

The Netherlands Cannabis segment consists of Leli Holland.

Leli Holland commenced sales during the first quarter of 2025.

Leli Holland was not operational during the comparable periods of 2024 and, as a result, comparative financial performance to the prior-year periods is not meaningful.

Three Months Ended September 30, 2025

Net sales for the three months ended September 30, 2025 were $3,587.

Cost of Sales

Cost of sales for the three months ended September 30, 2025 was $1,928.

Gross profit for the three months ended September 30, 2025 was $1,659, or a 46% gross margin.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended September 30, 2025 were $702.

Net income for the three months ended September 30, 2025 was $790.

Adjusted EBITDA

Adjusted EBITDA for the three months ended September 30, 2025 was $1,265.

Nine Months Ended September 30, 2025

Net sales for the nine months ended September 30, 2025 were $6,556.

Cost of Sales

Cost of sales for the nine months ended September 30, 2025 was $3,260.

Gross profit for the nine months ended September 30, 2025 was $3,296, or a 50% gross margin.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine months ended September 30, 2025 were $1,698.

Net income for the nine months ended September 30, 2025 was $1,383.

Adjusted EBITDA

Adjusted EBITDA for the nine months ended September 30, 2025 was $2,560.

PRODUCE SEGMENT RESULTS

The produce segment consists of VFCLP.

Produce’s comparative analysis are based on the consolidated results from continuing operations of VFLP and VFCLP for the three and nine months ended September 30, 2025 and 2024.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Produce sales for the three months ended September 30, 2025 were $12,841 compared with $14,340 for the three months ended September 30, 2024, a decrease of $1,499, or 10%, due to a commission charged on produce sales as a result of the supply agreement with Vanguard Food LP.

Cost of Sales

Produce cost of sales for the three months ended September 30, 2025 decreased by $2,097, or 16%, to $10,833 compared with $12,930 for the three months ended September 30, 2024, primarily due to a reduction in labor costs and favorable utility rates over the prior year.

Produce gross profit for the three months ended September 30, 2025 was $2,008 compared with a gross profit of $1,410 for the three months ended September 30, 2024.

Gross margin for the three months ended September 30, 2025 was 16% compared with 10% for the three months ended September 30, 2024.

Selling, General and Administrative Expenses

Produce selling, general and administrative expenses for the three months ended September 30, 2025 decreased by $498, or 70%, to $217 (2% of sales) compared with $715 (5% of sales) for the three months ended September 30, 2024.

Net Income From Continuing Operations

Produce net income from continuing operations for the three months ended September 30, 2025 was $1,300 compared with net income from continuing operations of $285 for the three months ended September 30, 2024.

The change of $1,015 was primarily due to the improved margins and the lower SG&A.

Produce net income for the three months ended September 30, 2025 was $1,024 compared with net income of $376 for the three months ended September 30, 2024.

The increase of $648 was primarily due to the improved margins and the lower SG&A.

Adjusted EBITDA

Produce Adjusted EBITDA for the three months ended September 30, 2025 was $2,081 compared with $2,331 for the three months ended September 30, 2024.

For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net (Income) Loss to Adjusted EBITDA”.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Produce sales for the nine months ended September 30, 2025 were $21,442 compared with $22,778 for the nine months ended September 30, 2024, a decrease of $1,336, or 6% due to a commission charged on produce sales as a result of the supply agreement with Vanguard Food LP.

Cost of Sales

Produce cost of sales for the nine months ended September 30, 2025 decreased by $1,852, or 8%, to $20,277 compared with $22,129 for the nine months ended September 30, 2024, primarily due to favorable utility rates over the prior year.

Produce gross profit for the nine months ended September 30, 2025 was $1,165 compared with $649 for the nine months ended September 30, 2024.

Gross margin for the nine months ended September 30, 2025 was 5% compared with 3% for the nine months ended September 30, 2024.

Cost of sales for the three months ended March 31, 2026 were $29,252 compared with $25,501 for the three months ended March 31, 2025.

The increase of $3,751, or 15%, was primarily due to a 27% increase in sales, partially offset by a favorable shift in International Export sales mix in favor of bulk flower, which has a lower average cost per gram over other packaged products.

Gross profit for the three months ended March 31, 2026 was $20,986 compared with $14,179 for the three months ended March 31, 2025.

The increase of $6,807, or 48%, was primarily due to higher sales volumes of International Exports as well as lower sales of value brands within the branded sales category.

Selling, General and Administrative Expenses

Produce selling, general and administrative expenses for the nine months ended September 30, 2025 decreased by $472, or 21%, to $1,802 (8% of sales) compared with $2,274 (10% of sales) for the nine months ended September 30, 2024.

Net Income (Loss) From Continuing Operations

Produce net income from continuing operations for the nine months ended September 30, 2025 was $2,815 compared with a net loss from continuing operations of $3,054 for the nine months ended September 30, 2024.

The change of $5,869 was primarily attributable to a favorable vendor settlements relating to the partial recovery of prior period operational losses from the ToBRFV infestation.

Net Income (Loss)

Produce net income for the nine months ended September 30, 2025 was $13,830 compared with a net loss of $7,810 for the nine months ended September 30, 2024.

The change of $21,640 was primarily attributable to an improvement on income (loss) from discontinued operations, net of tax of $15,771 and a favorable vendor settlement relating to the partial recovery of operational losses from the ToBRFV infestation.

Adjusted EBITDA

Produce Adjusted EBITDA for the nine months ended September 30, 2025 was ($489) compared with ($1,991) for the nine months ended September 30, 2024.

The change of $1,502 in Adjusted EBITDA was primarily due to an improvement in Adjusted EBITDA from continuing operations as a result of a favorable vendor settlement, partially offset by a decrease in Adjusted EBITDA from discontinued operations due to poor performance of the Texas Greenhouses in the first half of 2025.

For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”.

Selling, general and administrative expenses for the three months ended March 31, 2026 were $15,942 (32% of sales) compared with $14,619 (37% of sales) for the three months ended March 31, 2025.

Cannabis SG&A increased by approximately $3,084, or 26%, primarily due to higher commercial and marketing expenses and an update to the Company's transfer pricing policies.

Interest Expense

Interest expense for the three months ended March 31, 2026 was $523 compared with $701 for the three months ended March 31, 2025 due to a decrease in the average debt balance and a decrease in interest rates from the prior year.

Interest Income

Interest income for the three months ended March 31, 2026 and was $608 compared with $75 for the three months ended March 31, 2025 due primarily to an increase in the average cash, cash equivalents, and restricted cash.

Other (Loss) Income

Other income for the three months ended March 31, 2026 was $173 compared with other loss of $22 for the three months ended March 31, 2025.

Income (Loss) Before Taxes and Equity Method Investment Income

Income before taxes for the three months ended March 31, 2026 was $4,397 compared with a loss before taxes of $1,128 for the three months ended March 31, 2025.

The change of $5,525 was primarily due to the improved gross profit.

Income (Loss) from Discontinued Operations, Net of Tax

Income (loss) from discontinued operations, net consists of the following:

For the Three Months Ended March 31,

(Loss) income from discontinued operations, net of tax

Net (loss) income from discontinued operations, net of tax

Net Income (Loss) Attributable to Village Farms International, Inc.

Net income attributable to Village Farms International, Inc.

shareholders for the three months ended March 31, 2026 was $2,917 compared with a net loss of $6,703 for the three months ended March 31, 2025.

The increase of $9,620 was primarily due to the higher sales and the improved gross margin during the three months ended March 31, 2026, as well as the negative impact of the loss from discontinued operations in 2025 of $5,004, partially offset by an increase in the provision for income taxes of $1,360.

Adjusted EBITDA from Continuing Operations

Adjusted EBITDA from Continuing Operations for the three months ended March 31, 2026 was $9,890 compared with $4,546 for the three months ended March 31, 2025.

The increase of $5,344, or 118%, was driven primarily by higher sales and higher margins in Cannabis.

For additional information, refer to the reconciliation of Adjusted EBITDA from Continuing Operations to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”.

Liquidity and Capital Resources

Capital Resources

At September 30, 2025, cash, cash equivalents, and restricted cash were $87,561 and working capital was $100,219, compared with cash and cash equivalents of $24,631 and working capital of $53,800 at December 31, 2024.

We believe that our existing cash, cash generated from our operating activities and the availability under our Pure Sunfarms Revolving Credit Facility, will provide us with sufficient liquidity to meet our working capital needs, repayments of our long-term debt and future contractual obligations and fund our planned capital expenditures for the next 12 months.

At March 31, 2026, cash, cash equivalents, and restricted cash were $55,527 and working capital was $88,828, compared with cash and cash equivalents of $86,252 and working capital of $95,851 at December 31, 2025.

We believe that our existing cash, cash generated from our operating activities and the availability under our Pure Sunfarms Revolving Credit Facility (as defined below), will provide us with sufficient liquidity to meet our working capital needs, repayments of our long-term debt and future contractual obligations and fund our planned capital expenditures for the next 12 months.

An additional potential source of liquidity is access to capital markets for additional equity or debt financing.

3 unchanged sentences

Maximum Availability

Outstanding as of September 30, 2025

Outstanding as of March 31, 2026

FCC Term Loan

2 unchanged sentences

The Company is required to comply with financial covenants.

At December 31, 2024, the Company was not in compliance with financial covenants related to the fixed charge coverage ratio under the FCC Term Loan (as defined below) and the PSF Term Loan (as defined below), for which the Company received waivers.

The covenants were reinstated at the end of the first quarter for the PSF Term Loan and at the end of the fiscal year for the FCC Term Loan.

On April 10, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with FCC as the lender, which amended and restated the FCC Term Loan.

Among other things, the A&R Credit Agreement replaced the current financial covenants with more favorable financial covenants .

Under the Pure Sunfarms Secured Credit Facilities entered into on April 17, 2025, the Company is also required to maintain certain financial covenants.

At March 31, 2026, the Company was compliant with all of its financial covenants.

We can provide no assurance that we will be in compliance, or receive a waiver for any non-compliance of the financial covenants.

See “Risk Factors—Business and Operational Risk Factors—We are subject to restrictive covenants under our Credit Facilities” in our most recently filed Annual Report on Form 10-K.

Accrued interest payable on the Credit Facilities and Pure Sunfarms Loans as of September 30, 2025 and December 31, 2024 was $183 and $271, respectively.

Accrued interest payable on the Credit Facilities and Pure Sunfarms Loans as of March 31, 2026 and December 31, 2025 was $172 and $166, respectively.

These amounts are included in accrued liabilities in the accompanying Condensed Consolidated Statements of Financial Position.

1 unchanged sentence

The Company has a term loan financing agreement with Farm Credit Canada ("FCC"), a Canadian creditor (the “FCC Term Loan”).

The non-revolving variable rate term loan has a maturity date of May 3, 2027 and a balance of $16,345 on September 30, 2025 and $20,821 on December 31, 2024.

The outstanding balance is repayable by way of monthly installments of principal and interest, with the balance and any accrued interest to be paid in full on May 3, 2027.

As of September 30, 2025 and December 31, 2024, borrowings under the FCC Term Loan agreement were subject to an interest rate of 7.87% and 8.12% per annum, respectively.

On March 30, 2026, the Company extended the maturity date of the FCC Term Loan to February 3, 2031 and reduced the applicable margin on the annual interest rate by 50 basis points.

The non-revolving variable rate term loan has a balance of $15,365 on March 31, 2026 and $15,855 on December 31, 2025.

The outstanding balance is repayable by way of monthly installments of principal and interest, with the balance and any accrued interest to be paid in full on February 3, 2031.

As of March 31, 2026 and December 31, 2025, borrowings under the FCC Term Loan agreement were subject to an interest rate of 6.84% and 7.45% per annum, respectively.

As collateral for the FCC Term Loan, the Company has provided promissory notes, a first mortgage on the VFF-owned Delta 1 and Monahans greenhouses, and general security agreements over its assets.

In addition, the Company has provided full recourse guarantees and has granted security interests in respect of the FCC Term Loan.

The carrying value of the assets and securities pledged as collateral as of September 30, 2025 and December 31, 2024 was $98,423 and $101,068, respectively.

The carrying value of the assets and securities pledged as collateral as of March 31, 2026 and December 31, 2025 was $66,682 and $84,653, respectively.

On April 10, 2025, the Company entered into the A&R Credit Agreement with respect to the FCC Term Loan.

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The Pure Sunfarms Secured Credit Facilities are secured by the Delta 2 and Delta 3 greenhouse facilities.

The Pure Sunfarms Secured Credit Facilities will be used for working capital and other general corporate purposes, and was used to replace, and repay remaining outstanding balances on, the Company’s (i) Pure Sunfarms Loans and (ii) the PSF Revolving Line of Credit.

The Pure Sunfarms Secured Credit Facilities are being used for working capital and other general corporate purposes, and was also used to replace, and repay remaining outstanding balances on, the Company’s (i) Pure Sunfarms Loans and (ii) the PSF Revolving Line of Credit.

The credit and guarantee agreements related to the Pure Sunfarms Loans and the PSF Revolving Line of Credit were likewise terminated.

On February 20, 2026, the Company amended and extended its Pure Sunfarms Secured Credit Facility, which increased loan commitments with existing lenders by C$15 million and extending maturities one year to February 2029.

The incremental debt financing comes in the form of a delayed draw term loan, from which the Company drew an initial CAD $5 million on February 20, 2026.

All other terms of the credit facility loans remain unchanged.

The Pure Sunfarms Revolving Credit Facility can be drawn for advances of up to C$10.0 million.

The outstanding amount of the Pure Sunfarms Term Loan Facility was $18,249 as of September 30, 2025 and is repayable, on a quarterly basis, in an amount equal to C$1.0 million.

The outstanding amount of the Pure Sunfarms Term Loan Facility was $20,384 as of March 31, 2026 and is repayable, on a quarterly basis, in an amount equal to C$1.07 million.

Any amount remaining unpaid will be due and payable in full on the maturity date, which is on February 7, 2029.

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The Pure Sunfarms Secured Credit Facilities also contain customary covenants, customary representations and warranties, affirmative covenants, financial covenants and events of default.

Pure Sunfarms had a credit facility with the Business Development Bank of Canada (the "BDC Facility"), a non-revolving credit facility (the “PSF Non-Revolving Facility”) and a term loan (the “PSF Term Loan”) with two Canadian chartered banks (collectively, with the BDC Facility, the PSF Non-Revolving Facility, and the PSF Term Loan the “Pure Sunfarms Loans”).

In addition, Pure Sunfarms has a revolving line of credit (the “PSF Revolving Line of Credit”) with a Canadian chartered bank.

As described below, on April 17, 2025, Pure Sunfarms replaced the Pure Sunfarms Loans and the PSF Revolving Line of Credit with the Pure Sunfarms Secured Credit Facilities (as defined below).

The PSF Revolving Line of Credit could be drawn for advances of up to C$15,000 and had an outstanding balance of $0 as of December 31, 2024.

Interest under the PSF Revolving Line of Credit was payable at the Canadian prime rate plus an applicable margin per annum, payable monthly.

The outstanding amount on the PSF Non-Revolving Facility was $6,262 on December 31, 2024.

Interest under the PSF Non-Revolving Facility was payable at the Canadian prime rate plus an applicable margin per annum.

The outstanding amount on the PSF Term Loan was $10,436 on December 31, 2024.

Interest under the PSF Term Loan was payable at the Canadian prime rate plus an applicable margin per annum.

The outstanding amount under the BDC Facility, a demand loan included in current liabilities was $3,043 on December 31, 2024.

Interest under the BDC Facility was payable at an interest rate of 8.70%, payable monthly.

Summary of Cash Flows

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

(in Thousands)

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Discontinued operations

Net cash increase (decrease) for the period

Net cash decrease for the period

Effect of exchange rate changes on cash

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Operating Activities - Continuing Operations

For the nine months ended September 30, 2025 and 2024, cash provided by (used in) operating activities were $46,710 and $2,803, respectively.

The operating activities for the nine months ended September 30, 2025 consisted of $13,630 in changes in non-cash working capital items and $33,080 in changes before non-cash working capital items, while operating activities for the nine months ended September 30, 2024 consisted of ($3,911) in changes in non-cash working capital items and $6,714 in changes before non-cash working capital items.

The improvement when comparing the change in before non-cash working capital items for 2025 with 2024 was primarily due to improvements in Canadian Cannabis gross margins in 2025 compared with 2024.

For the three months ended March 31, 2026 and 2025, cash used in operating activities were ($16,763) and ($3,767), respectively.

The operating activities for the three months ended March 31, 2026 consisted of ($24,390) in changes in non-cash working capital items and $7,672 in changes before non-cash working capital items, while operating activities for the three months ended March 31, 2025 consisted of ($5,729) in changes in non-cash working capital items and $1,962 in changes before non-cash working capital items.

The decrease when comparing the change in non-cash working capital items for 2026 with 2025 was primarily due to income tax payments of approximately $15 million.

Investing Activities - Continuing Operations

For the nine months ended September 30, 2025 and 2024, cash used in investing activities were ($7,117) and ($5,607), respectively.

The increase in investing activities for the nine months ended September 30, 2025 was primarily due to capital expenditures made for the Leli Phase II indoor cultivation facility in the town of Groningen.

For the three months ended March 31, 2026 and 2025, cash used in investing activities were ($9,227) and ($1,549), respectively.

The increase in investing activities for the three months ended March 31, 2026 was primarily due to capital expenditures made for the conversion of the Delta 2 greenhouse for cannabis cultivation and VFN Phase II indoor cultivation facility in the town of Groningen.

Financing Activities - Continuing Operations

For the nine months ended September 30, 2025 and 2024, cash used in financing activities were ($3,611) and ($8,118), respectively.

For the nine months ended September 30, 2025, cash used in financing activities consisted of debt repayments of ($6,612), partially offset by $3,544 in proceeds from the exercise of warrants and options.

For the nine months ended September 30, 2024, cash flows used in financing activities consisted of debt repayments of ($4,301) and cash used for the acquisition of an additional 10% ownership of Rose LifeScience of ($3,817).

For the three months ended March 31, 2026 and 2025, cash used in financing activities were ($3,704) and ($1,384), respectively.

For the three months ended March 31, 2026, cash used in financing activities consisted of share repurchases of ($6,368) and debt repayments of ($1,208), partially offset by proceeds from borrowings of $3,589 and $469 in proceeds from the exercise of warrants and options.

For the three months ended March 31, 2025, cash flows used in financing activities consisted of debt repayments of ($1,384).

Contractual Obligations and Commitments

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Non-GAAP Measures

References in this Management’s Discussion and Analysis to “Adjusted EBITDA” are to earnings before interest, taxes, depreciation, and amortization (“EBITDA”), as further adjusted to exclude foreign currency exchange gains and losses, share-based compensation, gains and losses on asset sales and the other adjustments set forth in the table below.

In addition, we present below “Adjusted EBITDA – Constant Currency” which excludes the effect of foreign currency rate fluctuations.

References in this Management’s Discussion and Analysis to “Adjusted EBITDA from continuing operations” are to earnings before interest, taxes, depreciation, and amortization (“EBITDA”), as further adjusted to exclude foreign currency exchange gains and losses, share-based compensation, gains and losses on asset sales and the other adjustments set forth in the table below.

In addition, we present below “Adjusted EBITDA from continuing operations – Constant Currency” which excludes the effect of foreign currency rate fluctuations.

See “—Constant Currency” below.

Adjusted EBITDA and Adjusted EBITDA - Constant Currency are measures of operating performance that are not recognized under GAAP and do not have a standardized meaning prescribed by GAAP.

Adjusted EBITDA from continuing operations and Adjusted EBITDA from continuing operations - Constant Currency are measures of operating performance that are not recognized under GAAP and do not have a standardized meaning prescribed by GAAP.

Therefore, these non-GAAP measures may not be comparable to similar measures presented by other issuers.

Investors are cautioned that our non-GAAP measures should not be construed as an alternative to net income or loss determined in accordance with GAAP as an indicator of our performance.

Our non-GAAP measures are used as additional measures to evaluate the operating and financial performance of our segments.

Our non-GAAP measures are used as additional measures to evaluate our operating and financial performance.

Management believes that our non-GAAP measures are important measures in evaluating the historical performance of the Company because it excludes non-recurring and other items that do not reflect our business performance.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

The following table reflects a reconciliation of net income (loss) to Adjusted EBITDA, as presented by the Company:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Reconciliation of Adjusted EBITDA from Continuing Operations to Net Income (Loss)

The following table reflects a reconciliation of Adjusted EBITDA from continuing operations to net income (loss), as presented by the Company:

For the Three Months Ended March 31,

(in thousands of U.S.

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Foreign currency exchange loss (gain)

Interest expense, net

Provision for income taxes

Share-based compensation

Deferred financing fees

Goodwill and intangible impairments

Other impairments

Adjustments attributable to non-controlling interest

Adjusted EBITDA from continuing operations

Adjustments attributable to discontinued operations

Adjusted EBITDA (1)

(1) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP.

Therefore, Adjusted EBITDA presented for these segments may not be comparable to similar measures presented by other issuers.

Reconciliation of Segmented Net Income (Loss) to Adjusted EBITDA

The following table reflects a reconciliation of segmented net income (loss) to Adjusted EBITDA, as presented by the Company:

For The Three Months Ended September 30, 2025

(in thousands of U.S.

Cannabis Canada

Cannabis U.S.

Cannabis Netherlands

Net income (loss) from continuing operations

Amortization and depreciation

Foreign currency exchange (gain) loss

Interest expense, net

Interest (income) expense, net

Provision for income taxes

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Deferred financing fees

Adjustments attributable to non-controlling interest

Adjusted EBITDA from continuing operations

Adjustments attributable to discontinued operations

Adjusted EBITDA (2)

For The Three Months Ended September 30, 2024

(in thousands of U.S.

Cannabis Canada

Cannabis U.S.

Cannabis Netherlands

Net income (loss) from continuing operations

Amortization and depreciation

Foreign currency exchange loss (gain)

Interest expense, net

Provision for (recovery of) income taxes

Share-based compensation

Loss on disposal of assets

Adjustments attributable to non-controlling interest

Adjusted EBITDA from continuing operations (1)

Adjustments attributable to discontinued operations

Adjusted EBITDA (2)

For The Nine Months Ended September 30, 2025

(1) Adjusted EBITDA from continuing operations is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP.

Therefore, Adjusted EBITDA from continuing operations presented may not be comparable to similar measures presented by other issuers.

Reconciliation of Adjusted EBITDA from Continuing Operations for the Cannabis Segment to Segmented Net Income (Loss) for the Cannabis Segment

The following table reflects a reconciliation of Adjusted EBITDA from Continuing Operations for the Cannabis segment to net income (loss) for the Cannabis segment, as well as reconciliation to such measures for the Company on a Consolidated basis:

For The Three Months Ended March 31, 2026

(in thousands of U.S.

Cannabis Canada

Cannabis U.S.

Cannabis Netherlands

Net income (loss) from continuing operations

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Foreign currency exchange gain

Interest expense, net

Interest expense (income), net

Provision for income taxes

1 unchanged sentence

Deferred financing fees

Other impairments

Loss on disposal of assets

Adjustments attributable to non-controlling interest

Adjusted EBITDA from continuing operations (1)

Adjustments attributable to discontinued operations

Adjusted EBITDA (2)

For The Nine Months Ended September 30, 2024

For The Three Months Ended March 31, 2025

(in thousands of U.S.

Cannabis Canada

Cannabis U.S.

Cannabis Netherlands

Net (loss) income from continuing operations

1 unchanged sentence

Foreign currency exchange loss (gain)

Interest expense, net

Interest expense (income), net

Provision for (recovery of) income taxes

Share-based compensation

Deferred financing fees

Goodwill and intangible impairments (1)

Adjustments attributable to non-controlling interest

Adjusted EBITDA from continuing operations (1)

Adjustments attributable to discontinued operations

Adjusted EBITDA (2)

(1) Reflects impairment to goodwill and intangibles of $11,939 in U.S.

Cannabis that was based on recent historical performance, near-term forecasts, and the state of the CBD industry in the United States.

See “Critical Accounting Estimates and Judgments” below for more information.

(2) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP.

Therefore, Adjusted EBITDA presented for these segments may not be comparable to similar measures presented by other issuers.

Adjusted EBITDA – Constant Currency

(1) Adjusted EBITDA from continuing operations is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP.

Therefore, Adjusted EBITDA from continuing operations presented may not be comparable to similar measures presented by other issuers.

Adjusted EBITDA from Continuing Operations – Constant Currency

To supplement the consolidated financial statements presented in accordance with U.S.

GAAP, we have presented constant currency adjusted financial measures for sales, cost of sales, selling, general and administrative, other income (expense), income (loss) from continuing operations, income (loss) from consolidated entities, net income (loss), and Adjusted EBITDA for the three and nine months ended September 30, 2025, which are considered non-GAAP financial measures.

GAAP, we have presented constant currency adjusted financial measures for sales, cost of sales, selling, general and administrative, other income (expense), income (loss) from continuing operations, income (loss) from consolidated entities, net income (loss), and Adjusted EBITDA from continuing operations for the three months ended March 31, 2026, which are considered non-GAAP financial measures.

We present constant currency information to provide a framework for assessing how our underlying operations performed excluding the effect of foreign currency rate fluctuations.

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All growth comparisons relate to the corresponding period in 2025.

We have provided this non-GAAP financial information to aid investors in better understanding the performance of our segments without taking into account the effect of exchange rate fluctuations.

We have provided this non-GAAP financial information to aid investors in better understanding our performance without taking into account the effect of exchange rate fluctuations.

The non-GAAP financial measures presented in this Quarterly Report should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S.

The tables below set forth certain measures of consolidated results from continuing operations on a constant currency basis for the three and nine months ended September 30, 2025 compared with the three and nine months ended September 30, 2024 on an as reported and constant currency basis (in thousands):

As Adjusted for Constant Currency

For the Three Months Ended September 30,

As Reported Change

For the Three Months Ended September 30,

Constant Currency Change

Cost of sales

Selling, general and administrative expenses

Other (expense) income, net

Income (loss) before taxes and equity method investment income

Income (loss) from continuing operations

Income (loss) from discontinued operations, net of tax

Income (loss) including non-controlling interests

Net income (loss) attributable to Village Farms International, Inc.

Adjusted EBITDA - Constant Currency (2)

The tables below set forth certain measures of consolidated results from continuing operations on a constant currency basis for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 on an as reported and constant currency basis (in thousands):

As Adjusted for Constant Currency

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

As Reported Change

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Constant Currency Change

2 unchanged sentences

Other (expense) income, net

Goodwill and intangible asset impairments (1)

Income (loss) before taxes and equity method investment income

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Adjusted EBITDA - Constant Currency (2)

(1) Reflects impairment to goodwill and intangibles of $11,939 in U.S.

Cannabis that was based on recent historical performance, near-term forecasts, and the state of the CBD industry in the United States.

See “Critical Accounting Estimates and Judgments” below for more information.

(2) Adjusted EBITDA - Constant Currency is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP.

Therefore, Adjusted EBITDA - Constant Currency may not be comparable to similar measures presented by other issuers.

(1) Adjusted EBITDA from continuing operations- Constant Currency is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP.

Therefore, Adjusted EBITDA from continuing operations- Constant Currency may not be comparable to similar measures presented by other issuers.

Management believes that Adjusted EBITDA - Constant Currency is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect the underlying business performance of the Company.

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Our discussion and analysis of our financial condition and results of operations are based upon our Unaudited Condensed Consolidated Interim Financial Statements, which have been prepared in accordance with U.S.

GAAP and are included in Part I of this

Quarterly Report on Form 10-Q.

GAAP and are included in Part I of this Quarterly Report on Form 10-Q.

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses and related disclosure of contingent assets and liabilities.

As described in Note 5, Goodwill and Intangible Assets, in our Unaudited Condensed Consolidated Interim Financial Statements included in Part 1 of this Quarterly Report on Form 10-Q, during the nine months ended September 30, 2025 and 2024, the Company considered qualitative factors in assessing for impairment indicators for the Company’s U.S.

and Canadian Cannabis segments.

We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, including the potential future effects of macroeconomic trends and events, such as inflation and interest rate levels;

supply chain disruptions;

uncertainty from potential recessionary effects;

climate-related matters;

market, industry and regulatory factors;

global events, and public health matters.

These estimates form the basis for making judgments about our operating results and the carrying values of assets and liabilities, that are not readily apparent from other sources.

Given that management estimates, by their nature, involve judgments regarding future uncertainties, actual results could differ materially from these estimates if conditions change or if certain key assumptions used in making these estimates ultimately prove to be inaccurate.

Our accounting policies and critical accounting estimates are reviewed periodically by the Audit Committee of the Board of Directors.

As described in Note 5, Goodwill and Intangible Assets, in our Unaudited Condensed Consolidated Interim Financial Statements included in Part 1 of this Quarterly Report on Form 10-Q, during the three months ended March 31, 2026 and 2025, the Company considered qualitative factors in assessing for impairment indicators for the Canadian Cannabis reporting unit.

As part of this assessment, the Company considered both external and internal factors, including overall financial performance and outlook.

At September 30, 2025, the Company concluded that no impairment indicators existed as no events or circumstances occurred that would, more likely than not, reduce the fair value of the goodwill and intangible assets for its reporting units to be below their carrying amounts.

At September 30, 2025, the carrying value of goodwill associated with our Cannabis – Canada segment was $43.7 million and the carrying value of intangible assets associated with our Cannabis – Canada segment was $20.5 million.

At March 31, 2026, the Company concluded that no impairment indicators existed as no events or circumstances occurred that would, more likely than not, reduce the fair value of the goodwill and intangible assets for its operating unit to be below their carrying amounts.

At March 31, 2026, the carrying value of goodwill associated with our Canadian Cannabis reporting unit was $43.7 million and the carrying value of intangible assets associated with our Cannabis reporting unit was $22.5 million.

We believe that the estimates, assumptions and judgments involved in the accounting policies described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K have the greatest potential impact on our financial statements, so we consider these to be our critical accounting policies.

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Interest Rate Risk

As of September 30, 2025, our variable interest rate debt was primarily related to our Credit Facilities and Term Loans.

As of March 31, 2026, our variable interest rate debt was primarily related to our Credit Facilities and Term Loans.

Outstanding borrowings under our Credit Facility and Term Loans bear interest at either the (a) Secured Overnight Financing Rate (“SOFR”) or (b) Canadian Prime Rate, as defined in the agreement, plus an applicable margin.

As of September 30, 2025, we had approximately $34,594 in aggregate principal amounts of our Term Loans with a weighted average interest rate of 6.3%.

As of March 31, 2026, we had approximately $35,749 in aggregate principal amounts of our Term Loans with a weighted average interest rate of 5.7%.

The current interest rates for outstanding revolving loans under our Credit Facility and Term Loans reflect basis point decreases of approximately 2.1% over the comparable period in 2025.

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This risk increases in the current inflationary environment, in which the Federal Reserve may increase interest rates, resulting in an increase in our variable interest rates and related interest expense.

An additional 50 basis point increase in the applicable interest rates under our Credit Facility and Term Loan would have increased our interest expense by approximately $47 and $141 for the three and nine months ended September 30, 2025, respectively, and $57 and $171 for the three and nine months ended September 30, 2024, respectively.

An additional 50 basis point increase in the applicable interest rates under our Credit Facility and Term Loan would have increased our interest expense by approximately $43 and $50 for the three months ended March 31, 2026.

While we cannot predict our ability to refinance existing debt or the significance of the impact that interest rate movements will have on our existing debt, management evaluates our financial position on an ongoing basis.

Foreign Exchange Risk

As of September 30, 2025 and 2024, the Canadian/U.S.

As of March 31, 2026 and 2025, the Canadian/U.S.

foreign exchange rate was C$1.00 = US$0.7177 and C$1.00 = US$0.6966, respectively.

If all other variables remain constant, an increase of $0.10 in the Canadian dollar would have the following impact on the ending balances of certain statements of financial position items at September 30, 2025 and 2024 with the net foreign exchange gain or loss directly impacting comprehensive income (loss):

September 30, 2025

September 30, 2024

If all other variables remain constant, an increase of $0.10 in the Canadian dollar would have the following impact on the ending balances of certain statements of financial position items at March 31, 2026 and 2025 with the net foreign exchange gain or loss directly impacting comprehensive income (loss):

March 31, 2026

March 31, 2025

Financial assets

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis