Aphria stock is down slightly despite the company announcing that it has received a cultivation license from Health Canada for its Aphria Diamond facility, bringing its total production capacity to 255,000 kilograms.
Long-Awaited Licensing Approval
Aphria Inc (TSX:APHA) (NYSE:APHA) originally announced plans for the 1.3 million square foot facility almost two years ago in January 2018, with first sales initially expected in January of this year. The licensing application was originally submitted in March 2018, before Health Canada changed its regulations in an effort to fast-track approval for companies that had already completed construction. While the receipt of the license represents a landmark moment for the company, Aphria stock is mostly unmoved, trading down 0.1% at the time of writing.
The site is actually a joint venture between Aphria and Double Diamond Farms, an Ontario-based greenhouse operator. Aphria owns 51% of the project, while Diamond Farms controls the remaining 49% of the $109.5 million CAD facility. Aphria Diamond is expected to produce over 140,000 kilograms of cannabis per year, more than double the company's current capacity of 115,000 kilograms, which should be a major boost for Aphria shares heading into the 2.0 market next year.
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"We are extremely pleased to receive the licence for our long-awaited Aphria Diamond facility, which more than doubles our Canadian production capacity," said Irwin D. Simon, interim CEO. "Reaching industry-leading production levels coinciding with the expansion into new categories and new opportunities for cannabis in Canada and around the world is a transformative moment for Aphria Inc." Aphria stock is currently trading at $5.18 on the New York Stock Exchange.
Vape Crisis Weighing on Aphria Stock?
Perhaps a driving factor in the lack of movement in Aphria shares today could be the increasing concerns that the vaping crisis is linked specifically to THC products. Last week, the Centre for Disease Control and Prevention linked a number of injuries, and even 19 deaths, to vapes containing the psychoactive component in cannabis, THC. Aphria Inc recently rolled out its new range of THC vapes ahead of the launch of the 2.0 market in Canada in December, which the cannabis industry as a whole has been banking on to provide a catalyst for change in the floundering market.
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