Canadian cannabis company Aphria eyes U.S. market as Biden presidency approaches
Leamington, Ont.,-based company's chief executive says sentiment about cannabis changing in U.S.
Aphria Inc. chief executive Irwin Simon is seeing green as Democrat Joe Biden prepares to be sworn in as president of the United States next week.
Simon said Thursday that he has his sights set on the burgeoning U.S. pot market for the Leamington, Ont.,-based cannabis company.
"The recent election will likely provide a stronger near-term potential for change of federal cannabis regulations and at Aphria we are ready and well-positioned for it," he told a conference call with financial analysts to discuss the company's latest financial results.
"We expect change to happen faster and decisions to be made sooner under the new Democratic leadership."
Brimming with anticipation
Simon's excitement around the market matches many of Aphria's competitors who have been brimming with anticipation ahead of Biden's inauguration.
Biden's party is behind the Safe Banking Act, a bill that will allow financial institutions to work with cannabis companies without retribution, and he and running mate Kamala Harris have spoken in favour of decriminalizing pot and expunging criminal records related to its possession.
Through U.S. ballot questions, five states — Arizona, New Jersey, South Dakota, Mississippi and Montana — also recently voted in favour of legalizing recreational or medical cannabis.
Simon is positioning Aphria to take advantage of these developments with scalable infrastructure it got its hands on through a $300-million US acquisition of Atlanta-based SweetWater Brewing Co. in November.
Healthy majority of Americans favour legalization
Sweetwater has also given Aphria access to a network of mostly U.S. relationships that include 29,000 retailers, more than 10,000 restaurants and bars and even Delta Air Lines.
Simon believes both will come in handy as sentiment around cannabis changes in the U.S. He says at least 68 per cent of Americans are already in favour of legalization.
Simon's remarks came roughly a month after he announced his company will soon merge with Nanaimo-based rival Tilray Inc. and together become the biggest cannabis company by revenue.
If the deal closes as expected in the second quarter of 2021, Simon will lead the new company, which will use the Tilray name and will trade on the Nasdaq under the ticker symbol TLRY.
In the months leading up to the deal, Aphria said Thursday that it incurred a loss of $120.6 million Cdn or 42 cents per share, compared with a loss of $7.9 million or three cents per share a year earlier.
Net revenue in what was the second quarter of Aphria's financial year totalled $160.5 million, up from $120.6 million.
On an adjusted basis, Aphria says it earned $3.2 million a penny per share for the three months ended Nov. 30 compared with an adjusted loss of $48.8 million or 19 cents per share in the same quarter a year earlier.
Analysts on average had expected an adjusted loss of three cents per share and $154 million in revenue, according to financial data firm Refinitiv.