Canadian cannabis producer Aphria (TSE:APH) has today announced the creation of Aphria International – a subsidiary of Aphria which will shift company focus away from Canada and into the global market.
Aphria International formerly existed as Nuuvera Inc., which Aphria announced it would acquire back in January. The new entity will manage opportunities in established regulated cannabis markets such as Germany, Spain, Italy, and Australia among others.
Aphria claims it already has ‘significant interests’ and assets in Europe, Africa and the Middle East, which will now fall under Aphria International’s purview. For example, Aphria is shortlisted for a government-issued cultivation license in Germany; it holds one of seven import licenses in Italy; and it is in existing supply agreements with MedLab in Australia for use in clinical drug trials.
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Vic Neufeld, Aphria CEO, said of the deal: “Today, Aphria is affirming its place as a global leader in medical cannabis, with the resources and vision for sustained growth in markets around the world.”
However, stocks in Aphria failed to be stimulated by today’s announcement, currently down -2.16% to $12.67 CAD at the time of writing. This brings their market cap to $2.25B. Despite Aphria’s consolidation of the cannabis industry at an alarming rate, the company has seen a fairly consistent droop in stock prices since January’s peak of nearly $23 CAD per share. This isn’t altogether too surprising though, given rival firms Aurora (TSE:ACB) and Canopy Growth Corp (TSE:WEED) also followed a general trend in the legal cannabis industry this year, with most firms deflating from a feverish cannabis market investment rush towards the end of 2017.
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Many investors are holding on for a market turnaround when cannabis is legalized recreationally across Canada this year. In addition, Aphria’s international coverage could be an alluring long-term prospect.
The news coincides with controversial reports this week regarding Aphria’s acquisition of Nuuvera. According to a report published in the Globe and Mail, prominent Aphria figures owned shares in Nuuvera before they purchased the company, but failed to disclose this publicly. Neufeld has dismissed the report as a non-issue, stating “this is not material”. The CEO notes that the Aphria figures in question were under no obligation to publicly reveal their shares in Nuuvera, and that Nuuvera approached them to offer the shares over a year ago. The Ontario Securities Commission is not yet taking action on the matter.
Featured image: Ganja.ca
