How Aphria Inc (NYSE:APHA) is Laying the Foundation for an Empire

How Aphria Inc (NYSE:APHA) is Laying the Foundation for an Empire

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One of the themes we expect to truly define the next phase for the cannabis stocks is going to be about who is able to best establish dominant strongholds in overseas markets, which is another reason to have a close eye right now on Aphria Inc (NYSE:APHA). The company has been actively engaged in South America and has also started to ramp up its EU exposure profile.

To that end, the company recently announced its proposed acquisition of CC Pharma GmbH, a leading distributor of pharmaceutical products to more than 13,000 pharmacies in Germany. According to the release, the transaction, when closed, will strengthen the Company’s end-to-end medical cannabis operations and infrastructure in Germany, a key market in Aphria’s international expansion. It is anticipated that the transaction will close in January 2019.

Aphria Inc (OTCMKTS:APHQF) bills itself as a company that produces, supplies, and sells medical cannabis in Canada. Its cannabis products include dried flowers and cannabis oils. APHQF sells its products through its online store and telephone orders, as well as MMPR licensed producers.

The company offers sativa, indica, and hybrid medical marijuana products, as well as cannabis oils. It also provides support services in the form of medical consultations, group therapies, and rehabilitation to veteran and first responders.

The company sells its products through its online store or phones, as well as engages in the wholesale shipping of medical marijuana plant cuttings and dried buds to other licensed producers. Aphria Inc. is headquartered in Leamington, Canada.

According to press materials, “Aphria is a leading global cannabis company driven by an unrelenting commitment to our people, product quality and innovation. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria has been setting the standard for the low-cost production of safe, clean and pure pharmaceutical-grade cannabis at scale, grown in the most natural conditions possible. Focusing on untapped opportunities and backed by the latest technologies, Aphria is committed to bringing breakthrough innovation to the global cannabis market. The Company’s portfolio of brands is grounded in expertly-researched consumer insights designed to meet the needs of every consumer segment. Rooted in our founders’ multi-generational expertise in commercial agriculture, Aphria drives sustainable long-term shareholder value through a diversified approach to innovation, strategic partnerships and global expansion, with a presence in more than 10 countries across 5 continents.”

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As noted above, APHA recently announced its proposed acquisition of CC Pharma GmbH, a leading distributor of pharmaceutical products to more than 13,000 pharmacies in Germany. The chart shows a slide of about -7% over the past week. In addition, the stock has also seen a jump in recent trading volume to the tune of 86% above its longer-run average levels.

“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.”

Currently trading at a market capitalization of $2.18B, APHA has a significant war chest ($314M) of cash on the books, which compares with about $54.9M in total current liabilities. One should also note that debt has been growing over recent quarters. APHA is pulling in trailing 12-month revenues of $44.1M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 117.2%. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $APHA stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $APHA, either long or short, and we have not been compensated for this article.

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