Stock To Watch: Can Aphria Get You High?

Cannabis stock Aphria Inc. (APHA) has taken a beating just like the rest of its peers. However, this company has been adjusted EBITDA positive in the last three quarters, which sets it apart from the pack. The low-cost marijuana producer benefits from a margin-accretive portfolio that ranges from flower to derivative products. As countries across the globe continue to change their stance against weed, the company believes that it is well-positioned to benefit from the legalization of adult-use markets.

Late January, the company got its second European Union Good Manufacturing Practices certification (EU-GMP) as an active substance manufacturer, for yet another manufacturing facility, which Aphria believes will bolster its international export capabilities.

In addition to Canada, the marijuana maker plans to focus on, Germany and Latin American countries, as part of its global strategy. A deal with Canadian retail pharmacy chain Shopper’s Drug Mart places Aphria as ‘the first and preferred supplier of medical cannabis’ to the retail chain with more than 1,300 stores across Canada. The company estimates a Canadian adult-use market opportunity of $6 billion plus by 2024.

In Germany, one of the sought-after cannabis-ready markets, the company projects a market opportunity of more than 6 times the Canadian medical market due to payer reimbursement opportunity.

Through a mix of acquisitions and partnerships with Colombia, Argentina, Brazil and Paraguay- the company has a definite strategy for Latin America, which it estimates to be a market opportunity of more than 54 times the Canadian medical market due to payer reimbursement opportunity.

APHA closed Thursday’s trade at $4.16, up 1.22%. In the past 52 weeks, the stock has traded between $3.76 and $10.68.

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