Aphria Archives - Green Market Report

Debra BorchardtDebra BorchardtJanuary 11, 2019
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6min1580

Aphria Inc. (NYSE: APHA) reported net revenue rose 63% to C$21.7 million for the fiscal 2019 second quarter ending November 30, 2018 versus  C$8.5 million for the same time period a year earlier. The company said that the higher revenue in the quarter was driven by a 92% increase in kilogram equivalents of cannabis sold and an additional C$1.6 million of non-cannabis international sales.

The company delivered a net income of $54.8 million or $0.22 per share versus $6.5 million or $0.05 per share for the same period last year. Aphria said that the increase in net income  was due to gains on its long-term investment portfolio, primarily divestitures of positions in Hiku Brands and Liberty Health Sciences.

The quarter though wasn’t without problems. The company reported that medical cannabis sales declined marginally from 1,466.2 kilogram equivalents sold in the first fiscal quarter to 1,443.6 kilogram equivalents sold in the second quarter. Cannabis oil sales, as a percentage of volume, decreased to 19% of overall sales from 39% in the prior quarter, reflecting the higher percentage of dry bud sold in the adult-use market.

In addition to that, the average selling price, inclusive of the excise tax, declined to C$6.54 per gram in the quarter, compared to C$7.12 in the prior quarter. Sales to the adult-use market, which had a lower average selling price of C$6.32, inclusive of excise tax, compared to C$7.51 in the medical-use market.

“This is the first quarter to partially include adult-use sales, helping to drive 63% quarter-over-quarter net revenue growth, as did continued strength in sales to the medical-use market,” said Chief Executive Officer Vic Neufeld. “As expected, gross margins declined, reflecting lower effective selling prices in the adult-use market, as well as temporarily lower yields and higher production costs in the quarter as we moved aggressively to build out production facilities and implement new automation processes.”

The cash cost to produce a gram of dried cannabis rose from C$1.30 last year to C$1.76 in this past quarter. The “all-in” cost of goods sold also rose from last year’s C$1.83 to C$2.60.

Expenses in the quarter rose to $27.5 million, from $24.1 million in the prior quarter and $7.3 million in the prior year, which the company attributed to higher headcount and employee-related costs, following the acquisitions of Nuuvera Inc. and LATAM Holdings, and as a result of investing $2.6 million in brand development prior to the implementation of The Cannabis Act. It said that as a percent of net revenue, SG&A declined to 127% from 181% in the prior quarter, reflecting improved operating leverage on the Company’s growing revenue base.

New Leadership

The company did not address the issues it has had over the past few months with Hindenburg Research, the short seller who criticized company management. It did say that Aphria’s CEO Vic Neufeld, and Co-founder Cole Cacciavillani were both nearing the end of their five-years with the company and would transition out of their executive roles over the coming months but remain on the Board.

“Succession is the plan. Cole and I have informed the Board, and they have agreed, that we will begin the transition process immediately, and at the appropriate time, we will both step down from executive positions at Aphria,” said Neufeld.

Looking Ahead

“A top priority for Aphria is expanding production and automation to secure our long-term cost and scale advantages,” said Neufeld. “The Part IV and V expansions of Aphria One are now complete and awaiting Health Canada approval, while an application for a cultivation license at Aphria Diamond has been submitted and is awaiting pre-cultivation inspection. Based on this, we now expect to generate first sales from these new facilities later in the calendar year, pending Health Canada approvals, with our annualized harvest reaching 255,000 kilograms, compared to 35,000 kilograms currently, by the end of calendar 2019.”

He went on to add, “In the second quarter we also positioned the Company for long-term growth in key global markets with strategic alliances, targeted investments, and disciplined acquisitions. We’re excited to have just closed the previously announced acquisition of CC Pharma, based in Germany, which distributes pharmaceuticals and medical cannabis to over 13,000 pharmacies. This transaction positions Aphria to be a leading player in the European medical cannabis market. We’re equally optimistic about our recently announced alliances and acquisitions of highly strategic licenses and operations in Latin America and the Caribbean’s most attractive emerging cannabis markets, including Colombia, Argentina, Paraguay, and Jamaica.”

 

 


StaffStaffDecember 31, 2018
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6min1900

The hostile bid for Aphria Inc. (APHA) by Green Growth Brands Ltd., also known as Xanthic Biopharma Inc. (CSE: GGB) caused the stock to finally move higher rising over 12% to trade at $6.26 after a month of heavy selling. Aphria has faced a storm of negative attacks by the short seller Hindenburg Investment Research (HIR)  which questioned the company’s Latin American investments.

When HIR issued a report detailing the issues it had with Aphria’s investments as a justification to short the stock, the stock fell. This is a typical move by short sellers. They issue a highly negative report on the company it has shorted and if it gets some attention and the stock falls then the goal is accomplished. Supporters of Aphria fought back refuting parts of the report, but the stock continued to slide as wary shareholders decided it was best to sell. Aphria said it was also going to address HIR’s report in detail, but so far it hasn’t.

Aphria said in a statement, “The (HIR) report makes reference to the Company’s LATAM acquisition which closed on September 27, 2018. In connection with this transaction, the Board of Directors of Aphria confirmed that it received financial advice and a fairness opinion from a reputable firm that the consideration to be offered by Aphria in respect of the transaction was fair, from a financial point of view to Aphria and its shareholders.”

The company went on to add, “Investors should exercise caution in relying on the misrepresentations and distortions contained in the report and recognize that, by their own admission, Hindenburg Research “…stands to realize significant gains in the event that the price of any stock covered herein declines.”

On Thursday after the market close, Green Growth announced it would an acquisition that would “Provide 1.5714 common shares of Green Growth representing premiums of 45.5% over Aphria’s closing price on the Toronto Stock Exchange on December 24, 2018, and 46.0% over Aphria’s volume weighted average price on the TSX for the last 10 trading days ended December 24, 2018.  The offer values Aphria at approximately C$2.8 billion (US$2.1 billion) based on a valuation of C$7.00 per share for Green Growth Shares.” It didn’t take long for the market to point out that Green Growth’s shares were trading at C$7 and even though the share price did rise on Friday, it only went to C$5.11.

Aphria addressed this in its statement saying, “Aphria shareholders should be aware that the value of GGB’s per-share offer is based on a hypothetical valuation of its own shares, with no relation to the current price.”

Irwin Simon, the new Chair, said, “While we appreciate GGB’s interest in the value we have created at Aphria and our significant growth prospects, their proposal falls short of rewarding our shareholders for participating in such a transaction.  Further, the proposed offer is quite risky given GGB’s condition to complete a brokered financing at a price that is more than double the recent average of their share price, as a key term to the proposal.”

It’s worth noting that Simon has just replaced the CEO Vic Neufeld as Chair as of December 27, right after the bid was made public. Aphria issued a press release removing Neufeld from his role as Chairman but retaining him as CEO. He will also remain on the board as a Director. Neufeld has been identified by HIR as part of the problems at Aphria.

Simon added, “The Board has determined that the GGB proposal, as it currently stands, significantly undervalues the company.  Aphria has a tremendous market opportunity as a leader in the sector and a strategic vision to meet those opportunities.  Our focus is to realize that value for the benefit of all our shareholders.”

The deal has been criticized by HIR, which was expected since it caused the stock to go higher, which is exactly what HIR doesn’t want to happen. However, other cannabis industry investors have criticized the deal as well. Most point to the wished for valuation of C$7 for GGB shares. The deal has been characterized as “hostile,” but it is hardly hostile if the two companies share executives on advisory boards and have shared investors.

Whether the two companies combine or not will be up to the remaining shareholders. Green Growth’s CEO Peter Horvath says he has 10% of the support of Aphria’s shareholders. If this was just a publicity stunt (as some believe) to gin up both company’s stock prices, it worked.

 

 


William SumnerWilliam SumnerDecember 12, 2018
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5min1120

It’s time for your Daily Hit of cannabis financial news for December 12, 2018

On the Site

Aphria Continues International Push With Paraguay Despite Criticism

Aphria Inc.  (TSX: APHA) (NYSE: APHA) continues to forge ahead with its international expansion despite coming under fire from a short seller recently. Recently, Hindenburg Investment Research and Quintessential Capital Management released their short report on the company and questioned some of Aphria’s overseas investments causing the stock to plunge and triggering price target reductions by analysts.

Senate Votes To Pass 2018 Farm Bill, Next Stop Is The House

The 2018 Farm Bill has passed in the U.S. Senate with a vote of 87-13. The legislation goes to the House next for a vote and if it passes there, it will head to the President’s desk to be signed. Hemp will be switched for review to the Department of Agriculture and away from the Justice Department.

LeafLink Says Alaska, Maryland Most Expensive Place To Buy Cannabis

Earlier this week, the cannabis technology platform LeafLink released its 2018 Wholesale Cannabis Pricing Guide and the company learned that Alaska and Maryland are the two most expensive states to buy legal cannabis, followed by Nevada and California.

In Other News

GTEC Holdings Ltd.

GTEC Holdings Ltd. (TSXV: GTEC), a vertically integrated cannabis company, announced today that it had been approved for up-listing of trading onto the OTCQB Venture Market. Effective immediately, the company will start trading on the OTCQB under the symbol GGTTF.

mCig Inc.

mCig Inc. (OTCMKTS: MCIG) announced that Cal Acres Inc., a California company with majority ownership by MCIG, has received its Type-11 Distribution Temporary license from the state of California. Though the company has not completed construction on its distribution facility, Cal Acres may use its license to purchase and store product in a rented facility for the time being. Cal Acres expects that it will receive its cultivation and manufacturing licenses over the next several weeks. “Obtaining a temporary distribution license allows us to interact with the thousands of California Cultivators, Manufacturers, and Distributors… It’s a new launching pad for our future brands,” said Paul Rosenberg, CEO of MCIG Inc.

Mary’s Tech CA

Mary’s Tech CA has announced the opening of a 1,500 square foot manufacturing and distribution facility in Grover Beach, California. The climate-controlled facility utilizes proprietary automation equipment and a high-performance liquid chromatography machine for in-house testing. “We are pleased to officially be operating under our own BCC manufacturing and distribution license and to be in full control of the operations pipeline,” said Lynn Honderd, CEO of Mary’s Tech CA, Inc. “Partnering with EVIO Labs, a premier provider of analytical testing and research, as well as utilizing a robust distribution team, will result in improved efficiencies across the board. Ensuring that patients and consumers in California have consistent access to clean, reliable and accurately dosed products is the utmost importance to us.”


Debra BorchardtDebra BorchardtDecember 12, 2018
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9min3550

Aphria Inc.  (TSX: APHA) (NYSE: APHA) continues to forge ahead with its international expansion despite coming under fire from a short seller recently. Recently, Hindenburg Investment Research and Quintessential Capital Management released their short report on the company and questioned some of Aphria’s overseas investments causing the stock to plunge and triggering price target reductions by analysts.

On Wednesday, Aphria said it signed a Letter of Intent with Insumos Medicos S.A.  a Paraguayan pharmaceutical manufacturing, import, and distribution company, to enter into an exclusive supply and distribution agreement to provide medical cannabis in Paraguay.

“Latin America continues to represent an important growth opportunity within the global medical cannabis industry, and we are excited to be among the first to enter the rapidly emerging market in Paraguay,” said Jakob Ripshtein, President of Aphria. “Our strategic partner, Insumos, is well-positioned to establish a leading presence for the Company’s products throughout the country. Aphria will continue to expand its footprint in the most strategic markets in Latin America and around the world through its diversified approach to innovation, partnerships, and expansion.”

According to Aphria, Insumos is a distributor of pharmaceuticals to hospitals within Paraguay. Insumos has the network, relationships, and reach to bring Aphria’s products to patients in need across the country. As part of the proposed agreement, Insumos will undertake the registration of Aphria’s products with Paraguay’s Ministry of Public Health and Social Welfare and appropriate licensing for the import of medical cannabis.

The company said that once the deal is closed Paraguay will become the third market in Latin America, following Argentina and Colombia in which Aphria products will be distributed.

Short Seller Response

With regards to the short seller report, Aphria said in a statement, “Investors should exercise caution in relying on the misrepresentations and distortions contained in the report and recognize that, by their own admission, Hindenburg Research “…stands to realize significant gains in the event that the price of any stock covered herein declines.”

The company went on to add, “The report makes reference to the Company’s LATAM acquisition which closed on September 27, 2018. In connection with this transaction, the Board of Directors of Aphria confirmed that it received financial advice and a fairness opinion from a reputable firm that the consideration to be offered by Aphria in respect of the transaction was fair, from a financial point of view to Aphria and its shareholders.”

LATAM Defence

Aphria also fired back with regards to the points that Hindenburg made about the LATAM investments. The company said that its Board of Directors received financial advice and a fairness opinion from Cormark Securities Inc., the company’s independent and qualified financial advisor, which said the transaction was fair, from a financial point of view to Aphria. Aphria also said that it believes that the purchase price paid under the transaction was comparable with similar Latin America acquisitions by other large-cap, Canadian licensed producers.

The company also said that it retained counsel in each jurisdiction that completed extensive legal due diligence on the assets, licenses and businesses in each jurisdiction. Aphria said it sent executives to Colombia, Argentina, Jamaica, and Brazil to conduct due diligence regarding the assets to be acquired which included management meetings. Plus the company said it made site visits in each country and met with local authorized representatives.


Debra BorchardtDebra BorchardtNovember 8, 2018
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3min4161

Aphria Inc. (NYSE: APHA)  is acquiring German-based CC Pharma GmbH, a leading distributor of pharmaceutical products to more than 13,000 pharmacies in Germany. Aphria considers the country a key part of its international expansion.

According to the company statement, Aphria will pay €24.5 million in cash to CC Pharma at closing, with an earn-out multiple on future EBITDA of up to another €23.5 million following closing, if certain performance milestones are met. The acquisition is expected to close in January 2019.

Aphria International had previously signed a deal with CC Pharma to export roughly 1,200 kilograms of medical marijuana from Canada to Germany. CC Pharma was founded in 1991 and is a leading importer and distributor of EU-pharmaceuticals for the German market, with over €200 million in annual revenue.  A new division will be created in CC Pharma dedicated to medical cannabis.

“This acquisition strengthens our foothold in Germany, one of the most highly sought-after medical cannabis markets in the world,” said Vic Neufeld, CEO of Aphria. “CC Pharma is cash-flow positive and has significant experience with regulatory requirements and international logistics. It will be a strong addition to Aphria’s presence in Germany, providing deeper access to the important pharmacist channel and advancing our ambitious global growth strategy.”

This isn’t the first effort made by Aphria in Germany. Earlier this year, the company acquired a 25.1% interest in Berlin-based Schöneberg Hospital to support education about the benefits of medical cannabinoids. This was the first step in Aphria’s plans to build and operate pain treatment centers throughout Germany.

“We are focused on leading the way in the medical cannabis market in Germany,” said Hendrik Knopp, Managing Director of Aphria Germany. “By combining Aphria’s expertise with CC Pharma’s established local market presence, we are well positioned to continue on that journey.”

In order to maintain consistent medical marijuana deliveries, Aphria plans to build one of the biggest state-of-the-art GMP certified cannabis vaults in Bad Bramstedt, northern Germany, with a storage capacity of 5,000 kilograms. In addition to that, Aphria is planning on building a Research and Development indoor growing facility in Neumünster, Germany.


Debra BorchardtDebra BorchardtOctober 30, 2018
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4min7951

The New York Stock Exchange (NYSE: ICE) is delisting self-described cannabis company India Globalization Corp. (NYSE: IGC). In a short statement, the NYSE said that trading of the common stock would be suspended immediately.

The statement said that IGC has “Engaged in operations which, in the opinion of the Exchange, are contrary to the public interest. Section 1009(a) (ii) of the Company Guide states that it is necessary and appropriate for the protection of investors to immediately suspend trading in the Company’s common stock.”

The NYSE also said that “The issuer has substantially discontinued the business that it conducted at the time it was listed or admitted to trading and has become engaged in ventures or promotions which have not developed to a commercial stage or the success of which is problematical.

The Green Market Report recently highlighted the ways India Globalization Corp. claimed to be a cannabis company, but in reality, was earning money from legacy trading operations. Other outlets like MarketWatch have also dived into the company’s filings to uncover bad behavior. Mostly that IGC pretends to pivot its company to whatever new trend is moving the market, while not actually doing so.

Aphria Inc.

On a positive note, Aphria Inc. (TSX: APH)  said that its common shares have been approved for listing on the New York Stock Exchange and will begin trading at the open of markets on November 2, 2018. The new symbol will be APHA and the company said that it was changing its Toronto symbol from “APH” to “APHA.”

The shares that are currently trading on the OTCQB will move over to the NYSE. Shareholders will not need to do anything other than making sure their brokerages reflect the change in exchanges.

“Listing on the NYSE provides Aphria with access to the largest equity market in the world, with increased exposure to a vast array of US institutional and retail investors. This strategic move aligns directly with our growth ambitions as we enter an elite peer group of respected, high-profile corporate brands listed on the NYSE,” said Vic Neufeld , Aphria CEO.

Mr. Neufeld added: “We are excited to usher in a new era with the recent legalization of adult-use cannabis in Canada and as we aim to further expand our footing in exciting markets such as Latin America , the Caribbean and Europe . Aphria is well-positioned to capitalize on this fast-growing industry.”

 

 

 

 


Anne-Marie FischerAnne-Marie FischerOctober 12, 2018
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4min7550

Leamington, Ontario based Licenced Producer Aphria (APHQF) is reporting a solid start to the fiscal year 2019, and a 35% increase in grams sold in Q1-2018, despite some recent labor pool-related setbacks that resulted in a “rebalancing of inventory”.

Aphria reported revenue for the three months ending August 31, 2018, at C$13.2 million, representing a 10% increase over the prior quarter’s revenue of C$12 million and a 117% increase over the same period of 2017, which was C$6.1 million. They attribute this growth in revenue to an increase of wholesale orders and 100kgs of dried cannabis and cannabis oil that was sold to third-parties for clinical trial purposes.

Not all reports by Aphria were positive, showing a loss in the first quarter of 2019 due to a labor shortage in Leamington, Ontario. The first quarter of 2019 saw an adjusted gross margin of 63.6%, with an adjusted gross profit of C$8.4 million, compared to C$9.4 million with an adjusted gross margin of 78.7% in the prior quarter.

During this period, Aphria had to make the decision to dispose of 13,642 plants prior to harvest due to a “lack of qualified local labor”, leading one week’s crop rotation in the Aphria One greenhouse to outgrow its optimal harvest period. Without labor to harvest the plants, the company made the tough call to dispose of the affected plants to ensure that the next week’s harvest would be grown in optimal conditions.

Aphria acknowledges that had this loss not occurred, the gross profit margin would have been higher. This incident prompted Aphria to go on a hiring streak, doubling their greenhouse staff for their planned expansion to be fully operational by the end of Q2-2019.

Net income for the three months ending August 21, 2018 was C$21 million or C$0.09 per share as opposed to C$15 million or C$0.11 per share in the prior year, with the company attributing this increase to their long-term investment portfolio, including their investments in Liberty Health Sciences and Hiku Brands Company Ltd, as well as an increase in value of biological assets as a result of expansion projects.

Earlier this week, Aphria was in the news as rumors that tobacco giants Altria (makers of Marlboro cigarettes) were in talks with Aphria for a partnership, which Aphria later denied. “That there is no agreement, understanding or arrangement in place with a potential investor at this time. Aphria will advise the investment community of any material changes, if and when they occur, in accordance with applicable disclosure requirements,” they said in a statement.

This morning, Aphria invited those interested to attend a conference call, for which an audio replay will be available until November 9. For more information visit www.aphria.ca.

 


Debra BorchardtDebra BorchardtOctober 10, 2018
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3min5920

It has long been expected that big tobacco would want to get into the cannabis business. The legal status in the U.S. has been the one thing holding back tobacco companies. While it hasn’t seemed to matter to alcohol brands, tobacco has mostly remained on the fringes until today’s report from The Globe and Mail.

The Canadian publication reported that Altria (MO), which is the maker of Marlboro cigarettes was considering an equity stake in Aphria (APHQF). However, the story source cautioned that a deal could take time to reach and that it could possibly end up not occurring. The Globe’s source said that the leadership teams from Altria and Aphria have met on several occasions and most recently on Monday. It is rumored that Altria would start with a minority stake and then ultimately push it to a majority stake.

Aphria issued a statement saying, “That there is no agreement, understanding or arrangement in place with a potential investor at this time” and then added, “Aphria will advise the investment community of any material changes, if and when they occur, in accordance with applicable disclosure requirements.”

Aphria is a leading global cannabis company headquartered in Leamington, Ontario – the greenhouse capital of Canada. The company is known for its low-cost production of safe, clean and pure pharmaceutical-grade cannabis at scale, grown in the most natural conditions possible. Aphria has strategic partnerships with a presence in more than 10 countries across 5 continents.

Aphria stock jumped over 14% on Wednesday to lately trade at $15.30 on the OTC Markets. This is lower than its 52-week high of $19.86. Altria stock fell slightly during the day and closed down 19 cents to $62.91.

Traditional beverage brands have also been eyeing cannabis. Constellation Brands (STZ) made an almost $5 billion investment into Canopy Growth not long ago. Last week. Molson Coors (TAP) agreed to a joint venture with The Hydropothecary Corp. or Hexo (HEXO) to develop non-alcoholic cannabis drinks.

 

 


William SumnerWilliam SumnerSeptember 27, 2018
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4min2770

It’s time for your Daily Hit for cannabis financial news for September 27, 2018:

On the Site

GW Pharmaceuticals

The Acting Administrator of the Drug Enforcement Administration has placed FDA-approved drugs that contain CBD derived from cannabis and no more than 0.1 percent tetrahydrocannabinols  (THC) in schedule V. GW Pharmaceutical’s (GWPH) Epidiolex had been a schedule I controlled substance, with this new directive Epidiolex (and any generic versions of the same formulation that might be approved by the FDA in the future) will be a schedule V controlled substance.

Khiron Life Sciences

The medical cannabis producer Khiron Life Sciences (KHRNF) is positioned to secure a significant share of the cannabis market in Latin America, according to a report released Canaccord Genuity, initiating coverage on the company with a speculative buy rating at a C$3.00 per share target rate. This comes right as the company announced that it signed a non-binding memorandum of understanding (MOU) with Fundacion Daya, Chile’s leading medical cannabis institution and the holder of Chile’s only medical cannabis license

In Other News

Supreme Cannabis Company Inc.

Supreme Cannabis Company Inc. (FIRE) announced that it has entered into an agreement with a group of underwriters, led by GMP Securities and BMO Capital Markets, on a bought deal basis. Under the agreement, the underwriters will purchase C$90 million of convertible debentures, at a price of $1,000 per debenture.  The convertible debentures will yield an interest rate of 6% per annum, payable bi-annually on June 30 and December 31; starting this coming December. The offering is expecting to close on or around October 19, 2018.

Aphria Inc.

Today Aphria Inc.  (APH) announced that it had closed the acquisition of LATAM Holdings Inc. from Scythian Biosciences (SCYB). The acquisition was funded by Aphria assuming $1 million of debt held by LATAM Holdings and through the issuance of 15.6 million shares. Included in the acquisition is a 90% ownership of Colcanna S.A.S., a medical cannabis company located in Colombia’s “Coffee Zone”; the pharmaceutical import and distribution company ABP, S.A.; a 49% ownership in Marigold Projects Jamaica Limited; and the right of first offer and refusal in an unnamed Brazilian entity.

MedMen Enterprises Inc.

MedMen Enterprises Inc. (MMEN) reports that it has closed its previously announced bought deal financing through a group of underwriters led by Eight Capital and Cormark Securities Inc. The offering sold 15,681,818 units of the company, at a price of C$5.50 per unit, for a total of C$86.25 million. This sum includes the full exercise of the underwriters’ over-allotment option. The proceeds of the offering will be used for general and working capital, developing the company’s cultivation and production facilities, and expanding its retail dispensary network.

 

 


StaffStaffAugust 1, 2018
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5min6700

Canadian-based cannabis company Aphria Inc. (APHQF) reported increasing sales for its fourth quarter and year ending May 31, 2018. Revenue for the quarter rose 17% sequentially to $12,026. The increase in the quarter was driven primarily by reporting Broken Coast results for a full quarter versus only one month of revenue in the prior quarter.

Adjusted gross profit for the fourth quarter was $ 9,468, with an adjusted gross margin of 78.7%, compared to $4,903 with an adjusted gross margin of 85.7% in the prior year’s fourth quarter, representing an increase of over 90%. The increase in the adjusted gross margin from the prior quarter was consistent with the increase in revenues combined with improved cost structures.

Net loss for the fourth quarter was $4,992 or $0.06 per share versus the net loss of $2,593 or $0.02 per share in the prior year. The decrease in net income for the quarter relates to $6.5 million in incremental share-based compensation, $3.3 million of costs associated with Aphria International, $8.6 million in net losses on the company’s investment portfolio, all offset by almost $13.0 million in incremental gross profit.

Annual Results 

For the year revenue increased 81% to $36,917 versus $20,438  for 2017. Adjusted gross profit for the year was $27,912 , with an adjusted gross margin of 75.6%, compared to $15,854 , with an adjusted gross margin of 77.6%, representing an increase of over 75%. The increase in adjusted gross profit for the year is consistent with the company’s increase in revenue over the period.

Net income for the year was $29,448 or $0.18 per share, as opposed to $4,198 or $0.04 in the prior year. The increase in net income for the year relates to fair value adjustments associated with biological assets and unrealized gains on the company’s investment portfolio.

Management Comments

“We had a healthy fourth quarter and a solid year with many achievements we are proud of,” said Vic Neufeld , Chief Executive Officer, Aphria. “We are excited and ready to hit the ground running on the first day of legal adult-use. It won’t be without its challenges but we have a plan and the team in place to get it done. We continue to sign supply agreements with provinces and territories, and our Southern Glazer’s sales network partnership is unmatched, ensuring our brands and products are available and represented by retailers across the country.”

“Beyond that, we will continue to extend our industry-leading expertise and experience into global markets. We’ve had an exciting year adding more depth and experience to our senior leadership team that has helped expand our international operations and presence outside of Canada, US and Australia to an additional eight countries, and look forward to continued expansion within LATAM,” continued Neufeld.

Preparing For Adult Use Sales

Aphria suggested that revenue could dip due to its “previously announced decision to discontinue wholesales sales to other licensed producers, to provide increased inventory for the eventual pipeline fill for adult-use and international market opportunities over the next six to nine months.” Aphria has signed MOU‘s with British Columbia, Alberta, Manitoba, Quebec, New Brunswick and the Yukon Territory, with more agreements to be announced in the short-term.

Aphria believes that its low cost of production will help it to be successful against its peers as adult use sales begin. The company reported improved cash costs to produce dried cannabis per gram to $ 0.95, a decrease of $0.01 in the quarter, remaining below $1.00 for the second consecutive quarter.



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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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