The last time we talked about APHRIA INC COM NPV (OTCMKTS:APHQF) here on Street Register, the topic of discussion was the company’s achievement of a key milestone as part of its expansion strategy- obtaining its Cannabis Dealer’s License from Health Canada which permits the sale and transport of medical cannabis oil and resin to international markets.
This week a bombshell announcement was made that pertains to the company’s domestic presence, by way of a half-decade supply agreement to Canada’s largest provider of pharmacy services and products.
On Monday, APHRIA INC COM NPV (OTCMKTS:APHQF) revealed that it has entered into an agreement to become a medical cannabis supplier to LOBLAWS COS LTD (OTCMKTS:LBLCF), which owns Shoppers Drug Mart.
Subject to Health Canada’s approval of Shoppers Drug Mart’s application to be a licensed producer, under the terms of the agreement the Company will supply Shoppers Drug Mart with Aphria-branded medical cannabis products. It is expected the products will be sold online, as Canadian regulations currently restrict the sale of medical cannabis in retail pharmacies.
“We have an impeccable record cultivating and producing high-quality, medical-grade cannabis,” said Vic Neufeld, CEO of Aphria. “These traits make us a strong partner for an organization looking to serve and support Canadian patients.” (Source: Canada News Wire)
Management held a conference call Monday evening to discuss the details of the agreement between Aphria and Shoppers Drug Mart. (A replay of the call will be available until January 4th by dialing (855)859-2056 with the passcode 6395256)
On the call, Aphria CEO Vic Neufield talked about the deal to provide cannabis flower and oil to one of the country’s leading pharmaceutical retailers, which of course is pending Health Canada approval. Shoppers Drug Mart will sell these products through its online sales channels, and as Canada’s largest licensed medical cannabis provider, Aphria believes the five year distribution partnership with SDM will help them grow their footprint nationwide even more. At the outset, they will be offering Aphria branded dried cannabis flower strains, and four oil blends for a total of twelve offerings on the initial slate. Once in effect, the product will be serviced out of one distribution warehouse, making the logistics a more simplified process on Aphria’s end.
Aphria will not engage in any conversations or business transactions with other pharma suppliers, giving SDM exclusivity on the national level. This is a one way exclusivity, meaning that SDM may seek other suppliers, but has allowed Aphria to reserve the right to bid on any future opportunities if it’s something the company believes it can fulfill.
The company will certainly have the ability to fulfil any future orders and then some- Aphria’s yield capacity with all of the new growing operations both in effect and planned, will give the company a 100,000 kilogram annual output potential. According to a survey done by Statista.com earlier this year, at Aphria’s average per gram pricing of $7.47/g (CAD) , that theoretically works out to a potential annual crop valuation of nearly $750M CAD at maximum yield.
During the conference call, Neufield also hinted at Aphria doing testing on development of a completely proprietary strain or strains of marijuana that would be exclusive to the company. That’s a new piece of information, and something we’ll want to watch closely for more updates on, along with all of the other great things happening over at Aphria. We’ll stay up on any further developments with APHQF and pass them along to you! Stay locked on StreetRegister.com and be sure you’re signed up for our 100% free smallcap newsletter. It’s as easy as that! Simply submit your primary active email address in the box below. Subscribe now!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in APHQF stock, short or long.