Hi,
The reason you cannot extend is because there is a "Recovery Partition" between the normal disk and the free space area.
In order to be able to extend the disk you have to delete the recovery partition.
After that you can extend as normal.
FWIW, a recovery partition makes less sense in the virtual world as it is so easy to make backups.
With the virtual machine shut down, VMware Fusion not running and preferably with all the snapshots committed, make a copy of your VM bundle to an external disk.
You can also use my tool in the signature of my reply, but I advise against using Time Machine ( https://www.vimalin.com/why-is-time-machine-not-a-good-backup-for-virtual-machines/ )
Copying manually to an external disk works just fine though.
Hope this helps,
--
Wil