Aphria (APHQF) signed a manufacturer’s representative agreement with We Grow BC, a Vancouver-based licensed producer of premium cannabis, to become the exclusive sales representative across Canada. The agreement adds a second brand of premium B.C.-bud to be sold alongside Aphria’s expanding portfolio of adult-use brands, which includes celebrated bud from Broken Coast Cannabis through the company’s coast-to-coast sales distribution network.
Aphria’s sales team is supported by Great North Distributors, a subsidiary of Southern Glazer’s Wine & Spirits as Aphria’s exclusive cannabis representative in Canada, providing 100% coverage of all cannabis retailers, whether provincially or privately operated, from the first day of legal adult-use sales.
A significant announcement from Aphria. They are executing superbly on their recreational strategy aiming to take advantage of the demand that will be created after October 17. Their stock has been one of the poorest performers of 2018, but we are putting this down to a lack of confidence in management. Although a little unfair, the fact remains that they were slow to compete with Canopy Growth in their Canadian expansion, and their reliance on “Greenhouse only” strategy was shown to be a little short-sighted when they bought (and paid a premium for) Broken Coast. However, one also cannot discount their aggressive international expansion strategy (powered by their Nuuvera deal).
We continue to remain bullish on Aphria and are holding for the moment as we look for the stock to bottom out. We will keep you posted when we feel the time is right and will be looking to add to the portfolio.