The Canadian cannabis sector continues to see sales expand while the related stocks haven’t generally rallied. Aphria (APHA) is a prime example of a sector stock unable to generate any momentum due to a reset of expectations to more reasonable levels. My investment thesis remains bullish on the stock here around $6 after urging investors to buy below $4 during the COVID-19 crisis.
The main Canadian LPs have suffered from an inability to reach positive EBITDA due to over production and expense structures built for global companies multiple the size of current business. Aphria is one of the only companies to already generate EBITDA profits and the soon-to-be released quarter is the potential breakout quarter for the stock and the sector.
Aphria had previously promoted some very aggressive EBITDA numbers while the other large Canadian cannabis LPs like Aurora Cannabis (OTC:ACB) and Canopy Growth (OTC:CGC) can’t even figure