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Aphria Stock Accelerates In 2021

By Investing.com (Brenda O'Farrell/Investing.com)Stock MarketsJan 19, 2021 07:15AM ET
www.investing.com/analysis/aphria-stock-accelerates-in-2021-200556280
Aphria Stock Accelerates In 2021
By Investing.com (Brenda O'Farrell/Investing.com)   |  Jan 19, 2021 07:15AM ET
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The new year is off to an excellent start for the cannabis sector, and among the big winners is Aphria (NASDAQ:APHA) (TSX:APHA).

Last week, the Canadian-based marijuana grower recorded $160.5 million in net sales, a 33% jump compared to the same period last year as it unveiled its latest quarterly earnings. 

Aphria Daily
Aphria Daily

Among the reasons for the improved performance, the company pointed to an increase in recreational sales—a trend that many of the major companies in the sector have seen during the pandemic. Gross revenues from recreational cannabis hit $72.1 million, a new company record, which represents a 149% year-over-year increase.

The company also reported an upturn in its medical marijuana division.

The news sent the stock up an impressive 18%. The value of the company’s stock continued to rise over the rest of the week, closing last Friday on the NASDAQ at $12.42, and at C$16.42 yesterday on the Toronto Stock Exchange. Since the beginning of 2021, the company’s stock has gained almost 80%. In the last year, shares have gained more than 130%.

Although Aphria reported a sales increase for its seventh-straight quarter, its latest three-month period, which ended Nov. 30, also included a $120.6-million loss, a sharp increase to the previous quarter’s loss of $5.1 million. The increase in losses, according to the company, was due to merger and acquisition transaction costs and what it termed “increased share-based compensation.”

Last November, Aphria acquired SweetWater Brewing in a cash-and-stock deal to position itself in the U.S. cannabis beverage market.

That move was followed with Aphria announcing the $5-billion all-stock deal to acquire another Canadian cannabis producer, Tilray (NASDAQ:TLRY) in December. That deal is scheduled to close later this year.

The purchase of SweetWater gave the company immediate access to a vast distribution network, which includes 29,000 U.S. retailers, more than 10,000 bars and restaurants and one major airline, Delta Air Lines (NYSE:DAL).

And the cannabis-infused drink market, particularly in the U.S. is heating up, spurred by the prospect of a more favourable regulatory climate as the new Biden administration takes office in Washington.

Miller Time Makes Room For CBD

Another sign of the expansion of the U.S. cannabis-infused adult beverage market came late last week as Molson Coors (NYSE:TAP) announced its entry. The multinational beer-maker, known for its Coors and Miller High Life brands, has launched a non-alcoholic sparkling water infused with cannabidiol.

The company will sell the canned drinks in Colorado only on a test basis. Made by Truss CBD USA, a joint venture between Molson Coors and Canadian cannabis grower Hexo Corp (NYSE:HEXO) (TSX:HEXO), the beverages will be marketed under the Veryvell brand. Unlike, the Veryvell line marketed in Canada, the U.S. version will not contain THC, the psychoactive ingredient found in cannabis.

Truss Beverages was founded in 2018. 

Aphria Stock Accelerates In 2021
 

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Aphria Stock Accelerates In 2021

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Comments (1)
Tana Tan
Tana Tan Jan 19, 2021 7:34AM ET
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Stocks crashing soon. Stay alert
Tommi Nuutinen
Tommi Nuutinen Jan 19, 2021 7:34AM ET
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