Aphria Stock Struggling in 2019: How Vaping and Derivatives May Help

Aphria stock

In the middle of April, Aphria stock nosedived. It hasn’t recovered yet either, instead moving predominantly side-ways since. APHA stock now sells for $6.90 USD on the NYSE at a price that is just above a third of its all-time high of $16.50 achieved in September 2018 .

Aphria Stock 2019 Struggle

Aphria (TSX:APHA) (NYSE:APHA) is still repairing the damage from a controversial acquisition of Latin American assets. Concerns were raised about the value paid out for the purchase against the actual worth of the assets in question. The accusations suggested that management had a vested interest in the assets and were lining their own pockets by over-paying for them. The controversy led to the departure of APHA’s founder and then-CEO, Vic Neufeld.

The damage was extensive to Aphria stock; it lost over 75% in over three months following the event.

Since then, APHA stock has remained questionable due to uncertainty over the direction of the company. Aphria still remains without a definite CEO; currently, Irwin Simon is acting as interim. He has now held this position for nearly seven months.

Capitalize off Cannabis
Sign up now to start receiving our investing insights for FREE!

 

>> Aurora Stock Corrects from Highs: Why This May Not Be an Opportunity

Aphria stock is still struggling to regain pre-Canada-legalization highs, unlike some of its peers such as Canopy Growth (TSX:WEED) (NYSE:CGC). This is despite recently landing a lucrative vaping deal with Pax Labs, showing strong production numbers and becoming the third-largest cannabis producer in terms of annual yield.

Moving into Vapes and Concentrates

However, the move into vapes and concentrates should help to move Aphria stock higher eventually, though it may take more time. It is allocating sizeable amounts of its dried cannabis for use in Pax’s vaporizers and in other derivatives, helping the company to move away from dried cannabis sales and increasing its margins in doing so.

Vaping is a positive move for Aphria, although it won’t be alone. Pax is also working with Aurora Cannabis (TSX:ACB) (NYSE:ACB), OrganiGram Holdings (TSXV:OGI) (NASDAQ:OGI), and Supreme Cannabis (TSX:FIRE) (OTCQX:SPRWF). However, estimations abound that “vapes and concentrates will take up to 30% of the recreational market by 2021.”

With a market share that large, there is plenty to go around. At current prices, Aphria stock still trades almost 60% below its all-time high. 2019 has been a difficult year thus far, but operations appear to be moving in the right direction.

What are your thoughts on Aphria stock?

>> Read More Aphria News

Featured Image: Canva