It’s not going to make much of an impact on it’s balance sheet, but Canaccord Genuity analyst Matt Bottomley thinks Aphria’s (TSX:APH) moves to get out of the U.S. marijuana market is an ” incremental positive”.

On Friday, Aphria announced that it had entered into a definitive agreement with Liberty Health Sciences to sell its subsidiary Aphria (Arizona) Inc. and its sole holdings being the minority membership interests in Copperstate Farms LLC and Copperstate Farms Investors LLC t$20-million.

“The sale of Copperstate is an important step in our continued efforts to work collaborately with the [Toronto Stock Exchange] and Canadian securities regulatory authorities regarding the divestiture of our direct investment in a U.S. cannabis business,” said CEO Vic Neufeld. “We are assessing solutions that meet the needs of Aphria while protecting shareholder interests and maintaining shareholder value. On behalf of the Aphria team, I would like to acknowledge the great work being done by Copperstate to provide high-quality medical grade cannabis to Arizona patients. Liberty and its strong management team will be a great partner for Copperstate moving forward.”

Bottomley says this isn’t a huge development, but it is one that brings some clarity to Aphria’s story.

“Based on the terms of the transaction, we view this sale as neutral to our valuation (as Copperstate currently sits on APH’s balance sheet at C$34 million) and relatively immaterial to the company’s ~C$3.4 billion market cap and robust exposure to the Canadian market, and to its upwards of a dozen international opportunities after its recent acquisition of Nuuvera,” the analyst says. “Further, we believe Aphria’s decision to potentially divest all of its US assets represents an incremental positive as it could alleviate some investor concerns over how the TMX will ultimately respond to listed companies with US cannabis exposure.”

In a research update to clients Friday, Bottomley maintained his “Speculative Buy” rating and one-year price target of $26.50 on Aphria, implying a return of 71 per cent at the time of publication.

“We believe Aphria continues to remain attractive on its relative valuation, with a two year fwd EV/EBITDA multiple of 14.4x, versus its most comparable peers at 17.7x,” the analyst says. “As a leader in the Canadian cannabis market (and with what could now be the most robust international strategy amongt its peers), we would remain buyers of Aphria at current levels.”