Aphria moves higher
On March 4, Aphria (APHA) was among the few cannabis stocks that ended in the green with an increase of almost 2.7% to 13.85 Canadian dollars. The stock was moving higher upon Aphria receiving a license from Health Canada for an additional facility that spans over 800,000 square feet.
A total 800,000 square feet of space was part of Aphria’s five-part expansion plan at Aphria One with 700,000 square feet in Phase IV and 100,000 Square feet in Phase V. Together, the additional capacity will result in Aphria’s production to increase by 80,000 kilograms, which would put the total production capacity at 110,000 kilograms at the Aphria One facility.
The company stated that this facility would bring automation to transplanting cuttings, transporting the plants through harvesting, rough trimming and de-budding, curing and drying, and disposal of waste.
While these functions will be automated, the company stated that the initial steps of cutting, trimming, and pruning of mature plants will be done by hand. These developments could take Aphria’s earnings higher and may squeeze out short sellers.
An increase in capacity is critical for companies (HMMJ) including Canopy Growth (WEED), Aurora Cannabis (ACB), and Tilray (TLRY), given that the Canadian market has faced a shortage. Take the recent Statistics Canada report on the cannabis supply in Canada, which showed that the majority of supply for cannabis in the fourth quarter came from the illegal market. See Illegal Cannabis Still Dominating Supply in Canada.
Read on to the next part of this series to see how Aphria’s short sellers got squeezed earlier.