Aphria Inc (TSX: APHA) (NYSE: APHA) announced this morning that its subsidiary, ARA – Avanti Rx Analytics, has received its much awaited European Good Manufacturing Practices (EU-GMP) certification. The certification, which was acquired via the Maltese government, enables the company to begin shipping certain cannabis products to the European Union in the near term.
The certification is critical for Aphria, who aims to capitalize on its recent acquisition of CC Pharma, a European medical distributor. The company aims to ship product, both bulk cannabis flower and cannabis oils, from Canada to that of the EU to capitalize on the growing German and European cannabis opportunity. The cannabis cultivator will now be able to ship product from one subsidiary to another thanks in part to receiving the certification.
The company identified that it intends to begin shipping product from Avanti to CC Pharma in the fourth fiscal quarter of 2020.
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While good news for Aphria, this mornings news release was a bit murky surrounding key details. Chief Executive of Aphria Irwin Simon was quick to highlight the value of international distribution for the company, stating “with 2.4 million square feet of licensed production capacity of up to 255,000 kilograms, state-of-the-art greenhouses and labs, and our global infrastructure, we believe Aphria is well positioned to lead in the Canadian and international markets.” However, this quote is a bit misguided.
While one subsidiary of Aphria now has the appropriate licensing to be able to export product to the EU, this does not certify all of the product grown by the firm company wide for European export. The only Aphria products that will be able to be exported via Avanti are those produced at the facility, provided their point of origination is from an EU-GMP certified cultivator. Avanti itself currently consists of an analytical lab, as well as extraction and processing functions. The bulk cannabis shipped via the subsidiary to European markets will still be required to have been cultivated in a certified facility, which Aphria is currently working towards obtaining. The firm would also be eligible to export third party-sourced EU-GMP products via Avanti.
Aphria Inc last traded at $5.27 on the NYSE.
Information for this briefing was found via Sedar and Aphria Inc. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
