Aphria stock is trading down on Tuesday morning after the cannabis firm issued a voluntary recall on its new line of vape pens due to an issue with leaking cartridges.
Vapes Recalled Out of Caution
Tamara McGregor, Chief Corporate Affairs Officer of Aphria Inc (TSX:APHA) (NYSE:APHA), told The Growth Op that the company has asked provincial customers to return certain initially shipped '510 Cartridges' that have failed to meet its intended customer experience "out of an abundance of caution." She went on to add that, “we expect to resume shipment of these products shortly.” Aphria stock had been one of the Canadian market's better performers in 2019; however, this rocky start to the New Year has seen it drop about 1.3% in New York at the time of writing.
Like nearly all of its compatriots on the Canadian market, Aphria has bet heavily on the imminent arrival of the cannabis 2.0 market to secure big gains in 2020 after a difficult first full year of legalization. Cannabis 2.0 will open the market for a vast array of cannabis derivative products such as edibles, infused beverages, and vapes, with these products expected to arrive in stores in the coming weeks. Aphria shares are currently trading for $6.18 in Toronto and $4.75 in New York.
Vape Crisis Weighs on Aphria Stock
Back in October, one journalist described Aphria's vapes as having “enough high-potency THC in those containers to keep everyone in Windsor stoned for a month.” However, at that time, the vape crisis was taking aim at the cannabis market after the Centre for Disease Control and Prevention (CDC) discovered that THC was a key culprit in the crisis, which has claimed over 54 lives as of last week. The publication of that CDC report coincided with a 3.5% decline in Aphria stock as the long-term viability of vape products weighed on the minds of investors.
Despite the concern over its range of vapes, Aphria stock remains one of the biggest outperformers in 2019 after surprising investors in October with a second consecutive quarter of profitability. With Q2 fiscal 2020 results expected next week, we wait to see if investors will still be cheering.
Featured Image: Canva