The brightest news in the cannabis sector by far in the last week has been Aphria (NYSE:APHA), (TSX:APHA), beating expectations and reporting a profit in its first quarter of fiscal 2020.
The Ontario-based marijuana grower last week reported C$16.4 million (US$12.5 million) in net income for the three-month period that ended Aug. 31, marking the second straight profitable quarter — somewhat of a unicorn landmark in the cannabis sector.
Shares of the company jumped about 17% on the news. But the high was short-lived. Share values adjusted downward throughout the rest of the week, closing last Friday down to just a few cents above where it started the week. Aphria gained almost 1.5% yesterday in New York and was up almost half a percent in Toronto, closing at US$4.82 (C$6.27).
“This solid start to the year keeps us on track to achieve our fiscal year 2020 financial outlook,” said Irwin D. Simon, Aphria’s interim chief executive officer and chairman, in a statement.
In its latest earnings report, Aphria recorded C$30.8 million (US423.5 million) in revenue, up from C$28.6 million (US$21.9 million) in the previous quarter. The company also reaffirmed its guidance for projected revenues for the year of between C$650 million (US$496.6 million) and C$700 million (US$534.8 million). Its German operations are expected to account for a little more than half of its total net revenues.
Canopy Growth Expands Global Footprint in UK, Luxembourg
Canopy Growth Corp (NYSE:CGC), (TSX:WEED) continues to expand its global footprint, announcing yesterday that it has secured the first licence to supply medical cannabis in the United Kingdom and winning an exclusive contract to supply medical cannabis in Luxembourg.
Canopy’s subsidiary, Spectrum Therapeutics, has secured both deals, expanding its operation in Europe.
In the UK, the contract – the first of its kind in that country – will allow Spectrum to store and distribute cannabis-based medicinal products.
“Medicinal cannabis has been available in the UK for less than 12 months, and in that time, we have established cost-effective UK infrastructure to meet the needs of patients,” said Cosmo Fielding Mellen, managing director of Spectrum Therapeutics in the UK.
Spectrum’s contract in Luxembourg runs until the end of 2021. Last year, the government of Luxembourg decriminalized medical cannabis for patients with severe needs. Now, specially trained general practitioners and specialists are able to prescribe cannabis to patients living with cancer, neuro-degenerative and chronic diseases.
“Luxembourg is a country with big ambitions when it comes to medical cannabis, and we are excited to have earned the opportunity to supply this new market,” said Paul Steckler, co-managing director for Canopy Growth in Europe.
Shares of Canopy were up 0.69% yesterday in New York, closing at US$20.35, and were unmoved for the day at C$26.57 in Toronto.
Hexo Reports Thursday
Investors in the cannabis space will be watching closely as Hexo Corp (NYSE:HEXO), (TSX:HEXO) unveils its fourth-quarter earnings on Thursday. It’s been a very tough month for the Quebec-based grower, which saw its stock price drop more than 27% since Oct. 8.
The downward slide reflected the worrisome news from the company, which included the unexpected resignation of its CFO after only a few months, and its downgrading of its guidance last week.
In a statement in advance of this week’s earnings report, HEXO said fourth-quarter revenue will be between C$14.5 million (US$10.96 million) and C$16.5 million (US$11.04 million), below its previous predictions that had pegged revenues being twice as much as its third-quarter figures of C$13 million (US$9.83 million).
Author's Note: The who’s who of cannabis entrepreneurs and investors from Canada and the U.S. are in Chicago today and Wednesday for the Benzinga Cannabis Capital Conference. I will be representing Investing.com, moderating panel discussions during the two-day convention. Among those who will be speaking: former Canopy Growth CEO Bruce Linton, Acreage Holdings Inc (OTC:ACRGF), (CSE:ACRGu) CEO Kevin Murphy, Cresco Labs Inc (OTC:CRLBF), (CSE:CL) co-founder and CEO Charlie Cachtell, Cowen analyst Vivien Azer and actor, comedian and founder of Belushi’s Farm, Jim Belushi.