Aphria Gearing Up
First it was Cronos Group on the NASDAQ, then came Canopy Growth Corporation on the NYSE, and much recently, Tilray showed presence on the American markets. Canadian cannabis giants are all racing to list on US markets after previous big names showed exponential growth in share prices after listing. Few have gone, many are still waiting for their turn. Who will be next? Many investors have been seeking at Aphria to be the next candidate.
On September 6th, 2018, Aphria announced a complete divestment of all U.S. securities with the remaining sale of Liberty Health Sciences, a producer of pharmaceutical-grade cannabis. The release had investors curious of Aphria’s plans, as the company had divested earlier than expected.
Furthermore, a recent release on September 14th, 2018 announced the resignation of a previous director, as well as the appointment of a new independent director. John Herhalt, the new member of Aphria’s board of directors, is a retired partner from KPMG and has over 39 years of experience providing a wide variety of advisory and audit services to a range of clients (as stated in Aphria’s news release).
What Does this Mean?
For Canadian cannabis companies looking to list on American markets, companies must meet certain mandatory requirements. The most important one is being a legally operating business, to keep it short. Until marijuana is federally legal in the United States, companies looking to list on American markets cannot hold any American cannabis investments. With Aphria’s divestment in Liberty Health Sciences, it eradicate their main hurdle.
In addition, the appointment of an independent director is a requirement for a NASDAQ listing as stated in the NASDAQ Marketplace Rule 4200(a)(15). The appointment also further strengthens Aphria’s board of directors by bringing mature experience into the company.
The combination of these two material changes has investors anticipating an imminent U.S. uplisting.
What Should Investors Expect?
Although all the clues point in the same direction, investors should still be wary and not expect an uplisting in the short term. Aphria is still considered undervalued by many investors even without the anticipation of a listing on the American markets.
In the event of an uplisting onto U.S. markets, investors are likely to see double digit percentage gains in a short period of time. Cronos Group saw gains of over 34% within the first two weeks of trading on the NASDAQ and Canopy Growth Corp. saw over 22% gains in the same time period. The recent IPO, Tilray, ran up exponentially and saw gains of over four fold.
It is difficult to believe that Aphria won’t follow the paths (in terms of shareholder value) of previous Canadian cannabis company that listed on NASDAQ & NYSE. Whether or not a listing is imminent, Aphria is an excellent choice for any new or veteran investor trying to get involved with the Canadian cannabis space.