Aphria stock has been showing stable movement since early August after Aphria Inc (TSX:APHA) (NYSE:APHA) reported solid results for the second quarter.
Earnings Provide Major Boost
Ever since marijuana was legalized in Canada, many of the biggest cannabis companies in the country enjoyed sustained growth, and even in its latest quarters, most of those companies recorded highly impressive growth in their revenues. While many of the Canadian firms have recorded excellent growth, most of them have not been able to turn a profit so far.
However, there is one exception, and that is Aphria, which generated a profit in Q2 2019. The primary reason why the company was able to turn a profit was due to its acquisition of the firm CC Pharma. The German firm, which is involved in the distribution of pharmaceuticals and medical cannabis, contributed in excess of 75% to the company’s revenues in the quarter.
Hence, investors must be wondering whether the company can continue to remain profitable over the foreseeable future. However, it is necessary to point out that Aphria is currently in an excellent position to further consolidate its position as a major player in the international markets. It has already acquired a cultivation license for medical cannabis in Germany.
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At the time of writing, Aphria stock is up 0.40% at $9.17 CAD.
Additionally, the company’s Chief Executive Officer has stated that Aphria is hoping to be awarded the European Union Good Manufacturing Certificate in early 2020. The certificate is for bulk as well as for finished products and will allow the company to export larger volumes to both South America and Europe.
However, investors will perhaps be more interested to know about the company’s plans for the United States. Ultimately, the United States is the most important market for the industry. In that regard, the company has stated that it is currently involved in inking partnerships in the country and hopes to drive significant growth through those partnerships.
Last but not least, the company is currently believed to be able to produce 255,000 kilos of cannabis ever year, and that will give Aphria a place among the biggest producers in the industry.
Aphria stock has gained over 30% since early August.
Featured image: Canva
