Edible Garden Targets Herb Margins Above 19% in Tennessee Farm Deal

Edible Garden AG Incorporated (EDBL) announced Oct. 23 that it plans to shift selected herb-growing work to Caney Fork Farms, LLC, under a Tennessee supply agreement targeting lower costs and higher margins for the transferred production.

Production costs for those activities are projected to decline by more than 12%, with gross margin rising from about 4% to above 19%. The estimates apply only to output moved under the plan. The deal’s effect on results will hinge on rollout timing, production volume, customer demand, product mix and other operating conditions.

Caney Fork Farms is a certified organic, regenerative farm in Carthage, Tennessee. The transition is expected to start in the fourth quarter of 2026 and become substantially complete during 2027.

The supply agreement covers fresh produce for Edible Garden’s core herb business. It was signed Oct. 16 and took effect Oct. 15. Individual purchase orders will set the products, quantities, delivery dates and locations, and payment terms.

Prices are fixed through Jan. 31, 2027. After Jan. 31, 2027, the parties may approve annual increases, each capped at the smaller of the applicable Producer Price Index rise and 10%. The initial contract term ends Oct. 15, 2028, followed by automatic one-year renewals unless either party gives at least 60 days’ notice of nonrenewal.

The contract has no general minimum purchase or take-or-pay requirement. If Edible Garden reduces orders below scheduled minimums with less than 90 days’ notice, it may owe for crops and packaging specific to the company.

The move comes as cut herbs account for a larger share of sales. In the quarter ended June 30, 2026, cut-herb sales increased 50.5% year over year and represented about 42% of gross sales, up from about 30%. Cost of goods sold, excluding depreciation, rose 17.6%; higher sales and a shift toward cut herbs, primarily sourced from third-party growers at higher cost, contributed to the increase.

Quarterly revenue was $3.550 million, compared with $3.146 million a year earlier. The net loss narrowed to $3.259 million from $4.043 million.