Skip to main content

Aphria Inc. announced second-quarter results on Tuesday.

GEOFF ROBINS

Aphria Inc. slashed its outlook after a delay in opening additional Ontario cannabis stores and a ban on vape products in Alberta.

The Leamington, Ont.-based cannabis company said Tuesday that it now expects net revenue for its 2020 financial year to be between $575 million and $625 million.

It had previously predicted that total would be between $650 million and $700 million.

Story continues below advertisement

Aphria also said its adjusted earnings before interest, taxes, depreciation and amortization will now amount to between $35 million and $42 million, rather than between $88 million and $95 million.

Shares in the company behind brands including Solei, Broken Coast Cannabis, RIFF and Good Supply were down 63 cents or about nine per cent at $6.47 in early trading on the Toronto Stock Exchange.

Aphria chief financial officer Carl Merton said the company was being hampered by a delay in opening another wave of cannabis stores in Ontario. The province recently announced it would abandon a controversial lottery-based system that allowed 25 Canadians to open pot stores in Ontario last April, but people hoping to open new stores might not get the go-ahead until spring.

“That certainly had the biggest impact,” Merton told a conference call to discuss the company’s latest financial results.

“The province of Alberta’s temporary ban was next in order of priority.”

Despite it becoming legal to sell vaping cannabis products in most provinces in December, Alberta is still studying its Tobacco and Smoking Reduction Act and has yet to allow such products.

“They’ve been a little bit tight-lipped on the full details of it. They just want to take the right steps for their consumers,” chief executive Irwin Simon said. “Based on those conversations, we feel that that’s an April decision, not something that’s going to happen in the next two, three weeks.”

Story continues below advertisement

Aphria was also weighed down by the cost of having to buy third-party cannabis to “meet current market demands.” Aphria didn’t receive its cultivation license from Health Canada for subsidiary Aphria Diamond until November.

The company reported a net loss of $7.9 million or three cents per share for the quarter ended Nov. 30 compared with a profit of $54.8 million or 22 cents per share in the same quarter a year ago.

Net revenue in the quarter totalled $120.6 million, up from $21.7 million a year earlier.

Aphria also announced that Simon, who has been serving as interim chief executive since last February, would drop the interim from his title.

Simon, who is also Aphria’s chairman, said he was optimistic about the company’s future given the demand the industry is experiencing and how quickly Aphria managed to roll out vape products, making them among the first to dive into that part of the industry.

He said the company was confident it can continue generating customers, especially those who would typically buy from the underground market.

Story continues below advertisement

“There’s lots of plans in place at Aphria how we continuously move consumers over from the illicit market into the regulated market,” he said.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies