A couple of weeks ago, when we last mentioned APHRIA INC COM NPV (OTCMKTS:APHQF) here on Street Register, we were discussing the license amendment the company had received from Health Canada which provided Aphria with an additional 200,000 square feet of production space, as part of the expansion of its facility in Leamington, Ontario.
Prior to that, we had previously been following along as Aphria acquired Nuuvera, and it is an important rebranding, and guidance from the company on its plans for expanding into the legal cannabis business worldwide that we’re looking at today.
APHRIA INC COM NPV (OTCMKTS:APHQF) announced this week it would rename its recently-acquired subsidiary Nuuvera as Aphria International, remaining as a wholly-owned subsidiary of Aphria. Aphria International will focus its activities on established regulated cannabis markets around the world, including where Aphria International already has significant interests. These markets currently cover Europe, Africa and the Middle East, with assets and agreements in Germany, Italy, Spain, Portugal, Malta, Lesotho, and others. Aphria’s existing assets and interests in Australia will also be managed under Aphria International.
As part of the rebranding, Aphria assumes management of Nuuvera’s Canadian assets, including the Avanti lab; Avalon Pharmaceuticals, a late-stage LP (licensed producer) applicant; and Nuuvera’s rights and agreements in Nova Scotia and New Brunswick.
The Avanti lab is the only Canadian cannabis GMP-certified lab, which will enable the Company to process cannabis products under a GMP license for export internationally.
As a result of the acquisition, Aphria now has a strong presence in the Maritimes, including an existing supply agreement in New Brunswick and important relationships across the region. Aphria anticipates announcing additional opportunities that will expand the company’s reach and presence in the region.
On March 23, 2018, Aphria and Nuuvera announced the successful completion of the arrangement, under which Aphria acquired, among other things, all of the common shares of Nuuvera not already owned by the Company. The value of the deal at closing was $525M, including $35M of cash in Nuuvera at closing.
As a result of the acquisition, Nuuvera’s offtake agreements with Aphria, for a combined total of 77,000kg annually, are no longer in place. Aphria will now be able to enjoy the difference between the wholesale price the Company would have sold to Nuuvera and the retail margin that Nuuvera was going to sell for in Canada and internationally.
Vic Neufeld, CEO of Aphria said: “We’re excited to unite under one name Aphria’s unparalleled ability to grow low-cost, high-quality cannabis at scale with Nuuvera’s expansive international network, expertise and access to established medical cannabis markets. We’ve also strengthened our Canadian operations with access to the Maritimes, the addition of the cannabis GMP-certified Avanti lab, and reclaimed value from the offtake agreements previously in place with Nuuvera. All told, this deal has potential to create significant and long-term value for all Aphria shareholders.” (Source: Canada Newswire)
Among the many Canadian cannabis plays we’ve routinely tracked, Aphria has always been one of the most aggressive in terms of its efforts to grow its business, and the completion of the Nuuvera deal is a critical step in that regard. We’ll want to stay tuned for updates on Aphria International moving forward. As always, 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.