Aleafia Stock Recovers From 52-Week Low Ahead of Legalization 2.0

Aleafia stock

Aleafia stock is up over 8% on the day legalization 2.0 comes into effect, after Aleafia Health (TSX:ALEF) (OTCQX:ALEAF) hit a 52-week low of $0.77 at the close of trading last week.

How has Aleafia Stock Performed in the First Year of Legal Weed?

Aleafia stock, like pot stocks across the board, took a bit of a beating in the first year of legal cannabis. After hitting a peak of $2.77 in February, Aleafia Health lost over 70% of its value as it sank to a year-low last week. While most stocks sank throughout 2019 due to a combination of scandals, supply issues, underwhelming demand, and an uncertain regulatory environment, Aleafia actually engaged in a stock dilution in March in order to complete its $173 million CAD takeover of Emblem.

Don't let the decline in Aleafia stock fool you; operationally the company has actually performed pretty well in 2019. In August, the company reported a revenue increase of 159% from the previous quarter with CEO Geoffrey Bernic claiming, “the best is yet to come.” Then in September, the company announced the acquisition of an additional 60 acres of property for cultivation purposes, significantly increasing its production capacity; yet both announcements failed to move Aleafia’s shares any great deal.

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A Big Year Ahead?

Today's gains could be a result of investor optimism heading into the 2.0 market, and Aleafia stock could be one of the best bets for the next year after it became the first profitable cannabis company in Canada. Last month Aleafia Health issued an update to investors, stating it expects to turn a profit for the third quarter ended September 30. Aleafia will post its earnings report on November 14.

Another source of optimism for Aleafia stock going into the second year of legalization is the completion of the company's Paris, Ontario facility, which has been described as "The Crown Jewel" of Aleafia's operations. The recently completed phase II expansion features an initial annual extraction capacity of 115,000 kilograms of dried flower, which represents a 2,775% increase from the company’s current capacity of 4,000 kilograms. This means supply issues should be a thing of the past, and today's gains could be the start of a bright future for Aleafia Health.

>> Read More Aleafia News

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