Aphria Reports Record Sales in Q2 but Net Loss Widens
LEAMINGTON, Ontario – Aphria (APHA) the biggest company in Canadian recreational pot shares climbed more than 18 per cent after the major LP reported a record-breaking quarter for recreational cannabis sales, confirming analyst expectations for continued domination in the Canadian non-medical market. Aphria CEO Irwin Simon said his company are targeting 30 per cent of Canadian consumer sales, doubling its current share. Simon highlighted the incoming cannabis-friendly Biden administration cannabis reforms will benefit Aphria who recently purchased a craft brewery as a launch pad for cannabis expansion, getting ready for federal legalization.
“The recent election will likely provide a stronger near-term potential for change of federal cannabis regulations and at Aphria we are ready and well-positioned for it,” he told a conference call with financial analysts on Thursday. “We expect change to happen faster and decisions to be made sooner under the new Democratic leadership.”
The Leamington-based Aphria booked $160.5 million in net sales in its fiscal second quarter of 2021, a 33 per cent jump from the same period a year earlier. Aphria attributed the increase to an overall uptick in cannabis sales, rebounding revenue at its German medical unit hit by COVID-19, and sales by its newly acquired American craft brewery. Gross revenue from recreational cannabis hit a company record of $72.1 million, a 149 per cent year-over-year increase.
Speaking to analysts on the post-earnings call, Simon detailed the ways in which Aphria has secured a top spot in the legal cannabis market.
“According to OCS (Ontario Cannabis Store) data for the rolling three months of October, November, and December 2020, Aphria again is the number one LP [across] all categories, with a 16.2 per cent market share. Aphria is also the number one LP in the vape category, with 21 per cent market share. And our brands… were number one in dried flower with a 16.8 per cent market share,” he said.
In November, Aphria paid US$250 million in cash and US50 million in stock to buy SweetWater Brewing. Aphria’s plan is to wade into the American market ahead of potential federal legalization by selling cannabis-inspired drinks through SweetWater. The company announced an all-stock deal to acquire rival Canadian licensed producer Tilray in mid-December.
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