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Written by
Richard Sandle
Published on
June 25, 2017
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When we last reviewed APHRIA INC COM NPV (OTCMKTS:APHQF), the stock had exhibited a noticeable break-down of an uptrend that had started back in early-July of last year. The stock maintained a steady upward trend until May 21, 2017 when it broke through the trend line support level. It has since dipped down to $3.40 and has started trading upward again. The stock is currently trading at $4.14.

Aphria Inc. has managed to maintain most of the gains it made from its uptrend trading, even though most of the stocks in the cannabis sector have been trading down. There is a case to be made that the current price dip that APHQF stock is exhibiting is a discounted opportunity.First, a little background on the company, Aphria Inc, one of Canada's lowest cost producers, produces, supplies and sells medical cannabis. Located in Leamington, Ontario, the greenhouse capital of Canada. Aphria is truly powered by sunlight, allowing for the most natural growing conditions available. Aphria is committed to providing pharma-grade medical cannabis, superior patient care while balancing patient economics and returns to shareholders. Aphria was the first public licensed producer to report positive cash flow from operations and the first to report positive earnings in consecutive quarters.In recent news, Aphria Inc announced on June 15, 2017, its first collaborative initiative with Labourers' International Union of North America (LiUNA). The company is partnering with LiUNA Local 625 as its primary provider of medical cannabis to members in Essex and Kent counties. Local 625's membership approximates 1,600 plus eligible dependents, who will have immediate access to full coverage for certain medical cannabis products under the Aphria brand. LiUNA Local 625 members will have access to a range of fulfillment activities provided by a nationally recognized Benefits Administrator as a result of this partnership. Natural Health Services, one of Canada's leading patient-centric medical cannabis clinics will assist LiUNA members with on-site cannabis education and physician services. Vic Neufeld, CEO of Aphria commented:

"Aphria is thrilled to be entering into a partnership with LiUNA, one of Canada's fastest growing unions, We're always looking for new and innovative ways to support patients and, in joining forces with Local 625, we'll be able to provide some of the hard-working Canadians in Essex and Kent counties access to our high-quality products at affordable pricing."

Rob Petroni, Business Manager of Local 625 also commented the following:

"The health and wellness of our members is of critical importance to LiUNA, and in launching this partnership with Aphria, we are taking a major step forward in improving the lives of our members, Workplace injuries are far too often treated with opioids and their related effects, and medical cannabis will provide another treatment option."

On the financial front, not much has changed since our last review of the Company on May 25, 2017. The Company has a history of steady revenues, and a strong balance sheet with very little debt that enables it to continue its strategy of expanding in Canada and the United States. Current market capitalization stands at $517.25 million, on 124.94 million shares outstanding as of June 23, 2017. The U.S. election of November 2016 provoked a level enthusiasm for the cannabis sector reminiscent of the “dot com” era back in the mid-nineties when the tech sector experienced an extraordinary level of “irrational exuberance.” At the time, it was not uncommon for stock prices of tech stocks to be unreasonably overvalued based solely on the fact that the tech company’s name had the characters “.com” attached the end of it. The cannabis sector can be viewed as a similar microcosm of this phenomenon. In much the same way that internet related companies in the mid-nineties were over-valued because they were considered part of a revolutionary new up-and-coming industry, cannabis related businesses are similarly regarded as part of a new and emerging industry on which to capitalize on.Currently, many of the cannabis stocks are on a downward trend trading off the “highs” they enjoyed (no pun intended) from the brief period of excitement after the election which elevated cannabis stock prices for just about the entire sector. The excitement did not last very long. Profit-taking, short-selling, and a general sense that the initial hysteria caused many of the stock to be over-bought.Add to that the uncertainty and downward market pressure generated by the mixed signals that the incoming Trump administration has been putting out regarding the enforcement of federal marijuana laws, and it’s no wonder investors are becoming a bit uneasy about initiating any new investments in the sector.However, just like some of tech giants that that exist today that emanated from the dot-com era after its “shakeout,” so too will there be good thing to be had by the cannabis companies that remain standing when the “new-industry” cycle runs its course. Aphria Inc is very well positioned to remain standing after the inevitable cannabis “shakeout” to eventually come. We will be updating our subscribers as soon as we know more. For the latest updates on APHQF, sign up below!Image courtesy of FlickrDisclosure: We have no position in APHQF and have not been compensated for this article.

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