Aphria Spends $1+ Billion to Become A Global Cannabis Leader

In late 2017, leading Canadian licensed marijuana producer Aphria (APH.TO) (APHQF) laid out plans to capitalize on the domestic (Canada) and international cannabis markets.

Aphria has done nothing short of execute on this plan…

Aphria: An Execution and Acquisition Story

Aphria has just made two strategic acquisitions that cost more than $1 billion (only $10 million in cash, the remainder in stock). The company first announced the acquisition of Broken Coast making Aphria positioning Aphria to be a leader in the soon to be legalized adult use market. The acquisition is expected to add incremental annual production of 10,500 kilograms while also providing Aphria with geographic diversification, a cross-Canada distribution platform, and access to over 40,000 medical patients.

Yesterday, Aphria significantly enhanced its position within the global cannabis market and acquired Nuuvera (NUU.V). Although the acquisition cost more than $800 million, Nuuvera will provide leverage to several attractive international medical marijuana markets.

Nuuvera: Makes Aphria a Global Cannabis Leader

Aphria will leverage Nuuvera’s numerous relationships in Germany, Italy, Spain, the United Kingdom, Malta, Israel, Lesotho and Uruguay. Combined with Aphria’s existing agreements in Australia, the combined company establishes a leading international footprint among Canadian licensed producers, and expands Aphria’s processing and manufacturing capabilities globally.

The acquisition of Nuuvera bolsters Aphria’s recent accretive and value-add transactions, including Broken Coast Cannabis. As a result of the transaction, Aphria will capture the retail margin of the 77,000 kg of cannabis originally earmarked for previously entered supply agreements.

Aphria will benefit from Nuuvera’s management team and the international expansion opportunities it has secured. Nuuvera’s reputation for offering the highest quality in purified cannabinoid products has set it apart from its competitors. This was a friendly acquisition and the Nuuvera management team will play a meaningful role within the combined company going forward.

Through Nuuvera the combined company has access to the only standalone Health Canada GMP-approved facility that is authorized and dedicated under its controlled drugs and substances license to conduct commercial scale activities with respect to cannabis and cannabinoids. This medical laboratory enables Nuuvera to maintain the highest standards by adhering to both Health Canada and FDA pharmaceutical GMP guidelines.

In basketball, the term “the big three” is used quite often and is associated with the three best players on a team.

Aphria Rounds Out The Global Big Three Cannabis Players

If the global cannabis industry was a basketball team, the big three would be Canopy Growth Corp (WEED.TO) (TWMJF), Aurora Cannabis (ACB.TO) (ACBFF), and Aphria Inc. (APH.TO) (APHQF).

After these two acquisitions, Aphria has positioned itself as a major player within the global cannabis industry. The company will be able to recognize millions worth of synergies via these acquisitions and we expect them to prove to be accretive very quickly.