Aleafia stock is trading higher on Wednesday after the recent slump. Over the past year or so, Aleafia Health (TSX:ALEF) (OTCQX:ALEAF) has emerged as one of the better-known companies in the cannabis industry, and it is only natural that its Q3 2019 is highly anticipated among market watchers.
Earnings Due on November 12
It has now emerged that the company is going to release its third-quarter results on November 12 prior to the opening of the markets. The conference call will be hosted on the same day at 8:30 a.m. EST. The recent weeks have been quite eventful for the company, and it is worthwhile taking a look at one of the more important events that took place earlier on in October.
Aleafia Health had earlier signed a supply deal with fellow cannabis company Aphria Inc (TSX:APHA) (NYSE:APHA), but on October 8, Aleafia announced that the deal was being terminated. According to the provisions of the deal, Aphria was going to supply Aleafia Health’s subsidiary Emblem with 175,000 kilos of cannabis products over the course of five years—a sure benefit for both Aphria and Aleafia stock. The companies had formalized the deal in September 2018, and it became active in May this year.
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However, things did not quite work out as Aleafia thought they would, and in a statement, the company blamed Aphria. In its statement, Aleafia said, "Following Aphria's failure to meet its supply obligations under the Supply Agreement, Emblem has exercised its contractual right to terminate the Supply Agreement in accordance with its terms."
Now, several weeks later, Aleafia stock is up 3% at $0.81 on the TSX.
The cannabis sector has suffered a lot over the past months, and much of the problems emanating from the sector have had a highly damaging effect on smaller companies. Aleafia Health has been particularly affected by the troubles in the sector, and that is reflected in the path taken by its stock over the past months. That being said, Aleafia Health does present an opportunity for investors who have a high-risk tolerance.
At the end of the day, the company boasts of having the biggest referral-only medical cannabis clinics in the whole of Canada, and its base of patients has been increasing steadily as well. Its production capabilities have also been boosted through investment, and Aleafia hopes to produce 98,000 kilos this year.
Moreover, the legalization of derivative products in Canada could well prove to be the trigger that takes Aleafia stock higher.
Featured image: Canva
