What happened

Village Farms International (NASDAQ:VFF) was a smoking-hot stock on Tuesday, as it announced a key affiliate had begun shipping derivative products to select markets in its native Canada.

So what

Pure Sunfarms, the cannabis joint-venture of which Village Farms owns nearly 60%, has begun deliveries of its inaugural Cannabis 2.0 and bottled oil products. The first shipments will go to the western province of British Columbia, historically the site of some of the best cannabis growing operations in the country. At an unspecified point thereafter, these products will also be shipped to Alberta and Ontario.

Gloved hand holding marijuana leaf in front of the Canadian flag.

Image source: Getty Images.

Pure Sunfarms' stock in trade until now has been dried flower; Village Farms claims the joint-venture is leveraging this into attractive derivative products. 

"[W]e are confident consumers will embrace these new products as enthusiastically as they have Pure Sunfarms' dried flower products," said Village Farms CEO Michael DeGiglio.

Now what

Canadian marijuana companies have been excited about the prospects of Cannabis 2.0 since these products (derivatives such as gummies, beverages, etc.) were sanctioned in the final wave of recreational cannabis legalization last October. Generally speaking, they command higher prices, thus can be sold at higher margins, which would greatly benefit the typically loss-making cannabis industry.

It should be noted, however, that Village Farms/Pure Sunfarms is far from the only business selling such products. It will have its work cut out for it establishing meaningful share in the category.