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Canadian cannabis leader Aphria executed a sharp turnaround in its May quarter sales, avoiding the steep losses suffered in the similar stretch by rival Canopy Growth.

The Leamington, Ontario-based company said late Thursday that quarterly revenue jumped 75% from the February quarter, when founder and chief executive Vic Neufeld stepped down after shortsellers pointed out self-interested deals by Aphria executives.

On the NYSE—the stock is listed both there and in Toronto—Aphria’s shares (ticker: APHA) jumped 29% to $6.70 on Friday morning.

“It’s a new day at Aphria,” said the pot producer’s interim CEO, Irwin Simon, in the earnings announcement. On a conference call with investors, Simon described how the company had tightened up its operations and laid the groundwork for expanded production that could support annual sales of 1 billion Canadian dollars by the end of 2020.

It appears to be a new day across much of Canada’s cannabis industry, as operators replace entrepreneurs. Aphria’s snap to attention contrasted sharply with Canopy (CGC), where steeply negative cash flow led to the recent ouster of its entrepreneurial CEO and founder Bruce Linton at the behest of its 38% shareholder Constellation Brands (STZ).

Aphria’s May quarter revenue was C$129 million, including a 158% sequential rise in sales of recreational pot to adults, to C$19 million. Since Canada legalized recreational sales in October 2018, its licensed producers have had trouble getting their product onto the shelves of retail outlets—partly because of their own production problems and partly because of the slow rollout of government-run stores in populous provinces like Ontario.

The company also reported a net profit of C$16 million, or 5 cents a share, but those numbers resulted from a host of adjustments that make Aphria’s bottom line hard to discern. It benefited from some C$40 million in “nonoperating” gains from such things as foreign exchange and unrealized gains on convertible debentures.

Adjusting for those items—but adding back noncash expenses from amortization and stock-based compensation, Aphria said it realized C$2 million in cash flow from its cannabis business (defined as earnings before interest, taxes, depreciation and amortization). That cash-flow number also excluded $C6 million in cash-flow losses from “businesses under development” and C$4 million in positive cash flow from a cannabis distribution business.

Putting all that together, Aphria was just above breaking even in terms of cash flow for the quarter.

For the fiscal year ended May, the company had revenue of C$237 million, with a net loss of C$16 million, or 7 cents a share. Its cannabis operations had negative cash flow of C$18 million, with a cash-flow loss of C$28 million for the company overall.

Analysts saluted Aphria’s performance. Jefferies’s Ryan Tomkins said Friday morning that the company had materially beaten his estimates and confirmed his confidence in his Buy rating and US$11 price target. At BMO Capital Markets, Tamy Chen was respectful but more cautious.

In a Friday note, she maintained her Market Performer rating. Orders from provincial wholesalers have been lumpy, she warned while adding, “it is difficult for us to fully assess how sustainable the company’s operational turnaround may be.”

Simon, the interim CEO, was an Aphria board member when he stepped in to replace Neufeld. He has solid experience running a consumer packaged-goods business, after building the Hain Celestial Group (HAIN) into a U.S. natural foods empire. Hain’s growth stalled in recent years and it revised several years’ worth of financial results after an internal accounting review.

With its stock below $20 last year, from a 2015 peak of $68, Simon retired from Hain. His Aphria tour of duty offers potential stock-market redemption.

Aphria execs spoke proudly on the call about the company’s turnaround. Its May quarter sales of 5.6 metric tons of cannabis were more than double the level of the proceeding quarter, said financial chief Carl Merton. In an industry where companies are striving to become low-cost producers, Aphria’s cost to produce a gram of cannabis decreased to C$1.35, from C$1.48 in the February quarter. Accounting for all overhead costs, the May number was C$2.35 a gram.

The leap in production was fueled by the 27% plunge in Aphria stock after the company reported its poor third fiscal quarter in April, according to Merton. “Investors spoke very loudly in April,” he said.

“We’ve made lost of changes in personnel,” said Simon, the CEO. “We’ve made lots of changes in our grow.”

In addition to planting more than 500,000 cannabis stalks in its Leamington facility, Simon said that a new campus of 1.3 million square feet of greenhouses is waiting for approval by the federal regulators of Health Canada. Aphria is also waiting for inspection of its extraction operation that will supply vape cartridges, beverages and edibles when those become legal to sell later this year. Canada’s regulators are backlogged, he noted, as they try to keep up with the new industry.

“This industry is going through tremendous growing pains,” said Simon. “The Aphria of today was not the Aphria of yesterday and the Aphria of today will not be the Aphria of tomorrow.”

Write to Bill Alpert at william.alpert@barrons.com