Aphria stock jumped as much as 6.65% to $9.94 USD on the NYSE in Monday’s session after Aphria Inc (TSX:APHA) (NYSE:APHA) announced the launch of CannRelief, its first CBD-based nutraceutical and cosmetics product line for the German market.
After losing a third of its value in the past six months, Aphria stock investors reacted positively following the news.
Footprints in Germany
CannRelief becomesAphria’s first CBD-based nutraceutical and cosmetic product to be sold in the German market. The company plans to roll out an array of skincare and other products like creams, serums, and masks in phases under the CannRelief brand in the course of 2019.
Aphria has been plagued by a string of unfortunate news including last year’s short-sellers report from Hindenburg Research, a quintessential Capital Management and Forensic Analysis firm calling out Aphria for acquiring three Latin American properties at exorbitant prices—a transaction that benefited a few insiders. However, an independent analysis released in February indicated that the properties were acquired within a reasonable price range, contradicting the whistleblowing report.
Even with optimistic analyst projection suggesting a thriving cannabis market, things are not all roses for industry leaders like Aphria. By all measures Aphria stock may look great in the eyes of any investor, given the company boasts a production capacity of 255,000 kilos annually powered by its Aphria One Campus, the Double Diamond Farms partnership, and its Broken Coast Cannabis acquisition. With the said peak output, Aphria is estimated to be worth about $2.3 billion—a great valuation, until you find out that the company is currently producing only 35,000 kilos annually, a far outcry from its peak.
Aphria, like most of its peers, is being derailed by the licensing hurdle. The company is awaiting additional cultivation and sales licensing from Health Canada before it can operate at full potential.
Recently, in an interview with Bloomberg, Aphria Inc’s CEO Irwin Simon, while speaking of the company’s future prospects, stated that Aphria will hit $1 billion CAD in revenue by 2020.
Aphria stock is expected to be volatile in the coming weeks as the company is scheduled to release its fiscal third-quarter results on April 15th, 2019, before market open.
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