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As the cannabis industry continues to navigate macroeconomic headwinds and regulatory uncertainty, a number of U.S. and Canadian operators reported first-quarter 2025 earnings this week. From margin stabilization and restructuring efforts to international expansion and asset divestitures, the results show a sector trying to find a sustainable footing.
One standout: Village Farms International, which saw its stock surge nearly 33% on Tuesday following its earnings and a major divestiture announcement. Here's how four key players performed.
Hydrofarm (NASDAQ:HYFM), a leading supplier of hydroponic equipment, reported net sales of $40.5 million, down 25.2% year-over-year. The company cited continued oversupply in the cannabis industry as the main driver. Gross profit dropped to $6.9 million (17.0% margin), while adjusted gross profit fell to $8.5 million (21.0% margin).
Hydrofarm posted a net loss of $14.4 million, widening from $12.6 million in Q1 2024. Adjusted EBITDA came in at negative $2.4 million, compared to a slight gain in the same period last year.
Still, management highlighted progress in shifting toward higher-margin proprietary products and trimming SG&A costs, which declined by 11% on an adjusted basis. The company ended the quarter with $13.7 million in cash and is withdrawing its full-year 2025 guidance due to ongoing market volatility and tariff risks.
iAnthus (OTCQB:ITHUF) reported Q1 revenue of $38.1 million, down from $42.7 million in Q4 and $41.6 million year-over-year. Despite lower topline figures, the company recorded a net income of $5.1 million, compared to a $14 million net loss a year earlier. The swing to profitability was largely due to a $12.1 million gain from the sale and deconsolidation of assets in Nevada and Arizona.
Adjusted EBITDA held steady at $3.2 million, flat year-over-year but down from $6.4 million in Q4. Gross margin improved to 50%, up from 41.4% a year ago. iAnthus continues to operate under constrained capital conditions but has maintained positive gross profit and controlled operating expenses amid divestiture activity.
Ascend (OTCQX:AAWH) reported Q1 revenue of $128.0 million, down 5.9% sequentially. Retail sales fell 6.6% to $84.4 million, while wholesale revenue dropped 4.4% to $43.6 million. The decline was attributed to pricing and volume pressure in Illinois, Michigan, New Jersey, and Massachusetts, partly offset by new adult-use sales in Ohio and the expansion of partner stores.
Adjusted EBITDA was $27.0 million, representing a 21.1% margin. Net loss widened slightly to $19.3 million, up from $16.8 million in Q4. Still, the company generated $5.9 million in cash from operations, marking its ninth consecutive quarter of positive operating cash flow. Cash on hand rose to $100 million. Management reiterated its focus on densification, cost discipline, and strategic retail growth.
Village Farms (NASDAQ:VFF) reported consolidated sales of $77.1 million, essentially flat year-over-year. The company posted a net loss of $6.7 million and adjusted EBITDA of $81,000, down sharply from $3.6 million in Q1 2024. A $4.3 million inventory impact from dust storms in Texas weighed heavily on produce margins.
Canadian cannabis was a bright spot, with adjusted EBITDA rising 64% year-over-year to $6.7 million and net income jumping 258% to $3.0 million. Gross margin in the segment improved to 36%, driven by a 285% increase in international medical exports. Village Farms also commenced adult-use cannabis sales in the Netherlands through its Leli Holland subsidiary and announced a deal to spin off its Fresh Produce division into a private joint venture, unlocking $40 million in cash and a long-term cannabis focus.
On Tuesday afternoon, Village Farms stock was trading up nearly 33%, bucking the broader trend of cannabis equities, which were mostly in the red following earnings.
Photo: Shutterstock
