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Tuesday, October 20, 2020

APHRIA INC NPV (OTCMKTS:APHQF) Head of the Cannabis Class

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APHRIA INC NPV (OTCMKTS:APHQF) is a stock that’s been powering in an uptrend on the strength of legislative changes here and in Canada, and the anticipation of more to come. In addition, according to Benzinga.com, APHQF is currently at the top of the list “of all the stocks in the The Marijuana Index’s comprehensive list of North American marijuana-related stocks” as far as total performance this year.

Traders will note 52% added to share values of the company over the past month of action. Market participants may want to pay attention to this stock. APHQF is a stock whose past is littered with sudden rips. Moreover, the company has benefitted from a jump in recent trading volume to the tune of just shy of 490% above its longer run average levels.

APHRIA INC NPV (OTCMKTS:APHQF) trumpets itself as a company that produces, supplies, and sells medical cannabis in Canada. Its cannabis products include dried flowers and cannabis oils.

The company sells its products through its online store and telephone orders, as well as MMPR licenced producers. Aphria Inc. is headquartered in Leamington, Canada.

According to company press materials, “Aphria Inc., one of Canada’s lowest cost producers, produces, supplies and sells medical cannabis. Located in Leamington, Ontario, the greenhouse capital of Canada. Aphria is truly powered by sunlight, allowing for the most natural growing conditions available. We are committed to providing pharma-grade medical cannabis, superior patient care while balancing patient economics and returns to shareholders. We are the first public licensed producer to report positive cash flow from operations and the first to report positive earnings in consecutive quarters.”

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Clearly, with exposure to the cannabis marketplace in North America, this is another stock that greatly benefited from both the anticipation and outcome of the huge US referendum on pot legalization that took place across nine states on November 8 (last Tuesday). The voting went well, with 8 of 9 states moving forward on the legislative path toward greater legal sales. Industry analysts have posted expectations of somewhere on the order of a 3-4x growth in legal sales footprint in the US as a result.

However, the Canadian cannabis story may even be hotter right now than the US one, and in fact may provide a model for what we will eventually see here in the states. In Canada, legislation is likely to be on the table sometime next year to fully legalize pot on a national basis for all conceivable consumers, according to a promise made by the country’s PM Trudeau.

In addition, the company just announced that it has entered into an agreement with Clarus Securities Inc., on behalf of a syndicate of underwriters, pursuant to which the Underwriters have agreed to purchase, on a “bought deal” basis, 8,750,000 Common Shares of the Company at a price of C$4.00 per Common Share for aggregate gross proceeds to the Company of C$35,000,000.

The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 1,312,500 Common Shares at the Offering Price, exercisable in whole or in part at any time for a period ending 30 days from the closing of the Offering. In the event the over-allotment option is exercised in full, the aggregate gross proceeds of the Offering will be C$40,250,000.

According to the release, “The Company intends to use the net proceeds from the Offering for the development of infrastructure, purchase of capital equipment, capacity expansion, strategic investments, and general working capital purposes.”

At this time, carrying a capital value in the market of $319.3M, APHQF has a significant war chest ($39.63M) of cash on the books, in a pool of total assets approaching $63M, which leans against an appreciable load ($5.73M) of total accumulated debt.

The bottom line is; APHQF is making real money, with trailing revs already coming in at $8.79M. In addition, the company is starting to see major topline growth, with quarterly y/y revs increasing at 360%. In other words, this is a top performer with a great balance sheet, great financials, and likely strong catalysts ahead. We will continue to follow it closely. For continuing coverage on shares of $APHQF stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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