Aphria boosted by results
Aphria reported quarterly revenues of $10.3 million, more than double compared to a year ago. Ontario-based medical pot producer’s stock rose more than 7% Monday
Shares of licensed medical marijuana producer Aphria Inc. surged Monday on better than expected quarterly results and after news of a changing political tone on cannabis south of the border.
Aphria reported a $12.9-million profit in its latest quarter, boosted by the sale of some of its shares in U.S. company Liberty Health Sciences.
The Leamington, Ont.-based producer’s stock rose 7.37 per cent to $12.24 on the Toronto Stock Exchange in trading Monday.
Aphria’s chief executive Vic Neufeld said Monday the company is “very excited” about political developments south of the border, where cannabis is illegal under U.S. federal law, including U.S. President Donald Trump’s commitment last week to support congressional efforts to protect states that have legalized cannabis.
Neufeld said Liberty Health Sciences, which has interests in states where pot is legal and in which Aphria has a 28-per-cent stake, has been “given a stamp of validation by key political leaders.”
Aphria moved to reduce its stake in Liberty earlier this year after Canada’s biggest exchange operator warned in October that U.S. federal law takes precedence over state laws, and cannabis firms with cross-border activities may face delisting.
In January, U.S. Attorney General Jeff Sessions rescinded an Obama-era memo that suggested that the federal government would not intervene in states where cannabis is legal, and said he was leaving it to federal prosecutors in those states to decide how aggressively to enforce federal law.
Aphria sold 26.7 million Liberty shares at a price of $1.25 per share, representing all its shares in the company that are not subject to Canadian Securities Exchange escrow requirements and maintained a 28.1 per cent interest after the transaction.
But on Friday, Colorado Senator Cory Gardner said he received a commitment from Trump that the memo’s rescission would not impact Colorado’s legal marijuana industry. While Neufeld viewed this as positive, he told analysts Monday he did not expect the TMX Group, which operates the Toronto Stock Exchange and the Venture exchange, to change its stance soon.
Aphria does not anticipate “enough advancement” between now and late July, when the licensed producer is due to reduce its stake in Liberty Health Sciences further to 20 per cent, Neufeld said.
“This is just another advancement of eventually getting to the position of where medical cannabis moves to Schedule 2,” he told analysts.
“That journey is still a long way off.”
Meanwhile, Aphria reported quarterly revenues that more than doubled to $10.3 million, compared with a year ago, and an improvement in its all-in costs of sales of dried cannabis per gram to $1.56, down from $2.13 in the previous quarter.
The company said the its latest quarterly profit amounted to eight cents per share for the quarter ended Feb. 28 compared with a profit of nearly $5 million, or four cents per share, a year ago when it had fewer shares outstanding.