It is now a well-established fact that 2019 was a bit of a horror year for the cannabis industry due to a range of structural issues, and stock prices plunged considerably as well. Aleafia Health (TSX:ALEF) (OTCQX:ALEAF) could not escape the sector-wide slowdown either, and over the course of 2019, Aleafia stock lost as much as 80% of its value.
Aleafia stock hit its highest level in 52 weeks of US$2.23 back in February last year. While it is true that the company’s stock fared poorly last year, there are some reasons for optimism as well.
Q3 Results Review
It is necessary to point out that back in the third quarter, Aleafia Health emerged as one of the very few companies that managed to surpass analysts’ expectations.
In that quarter, the company generated C$5.3 million in revenue, which not only beat analysts’ estimates but also managed to deliver robust sequential growth. In the previous quarter, the revenue was C$4 million. Cannabis revenue soared by a much as 64% to hit C$4.2 million and continued to post a low cost of production of C$0.08 per gram.
Aleafia stock is down 4% at $0.46 in the early morning session on Friday.
The company is working towards raising its capabilities significantly and hopes to produce 129,500 kilos annually once it gets the approvals for its Niagara Greenhouse. It is also necessary to point out that Aleafia Health managed to reduce its EBITDA losses significantly to just C$2.5 million in the third quarter.
Recently, the company provided an update with regards to the issue related to its stolen consignment. Aleafia revealed that the cannabis products were stolen in transit from the property of its third-party transportation company. The transportation company has also filed a complaint with the police with regard to the material that was stolen. The incident took place prior to December 20.
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Featured image: Canva