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Counting the COVID cannabis carnage

There was a lot of hype around Aphria’s planned merger with Tilray. But around Aphria’s latest earnings report, there is considerably less hype.

The company reported a net loss of $361 million for the quarter ending February 28, and this is after revenues sunk 25% in the previous quarter.

“That brings Aphria’s loss for the first three quarters of its fiscal year to CA$486.7 million,” writes MJ Biz.

The pandemic effect

CEO Irwin D. Simon attributed some of the loss to COVID-19 lockdowns, blaming lower than expected cannabis revenues on provincial wholesalers’ “transitory reduction in demand” in a press release.

If COVID did hurt sales, it hasn’t affected the industry in the same way as a whole — legal cannabis sales have dramatically increased this past year.

Still a cannabis company?

Reporter Matt Lamers of MJ Biz noted that just 45% of the company’s total revenues come from cannabis. The other 55% comes from distribution and the company’s investments in alcohol, like its November acquisition of Atlanta-based SweetWater for approximately USD $300 million.

“Aphria is a distribution and beverage alcohol company, with a cannabis side hustle,” Lamer’s tweeted

Still to come

Shareholders were asked to vote on the Tilray merger on Monday, which the board unanimously supports.

“We remain excited with the opportunities created for both Aphria shareholders and Tilray stockholders in completing our proposed business combination with Tilray,” Irwin said, “and believe that together, we will create one of the strongest global cannabis and consumer packaged goods companies in the world.”

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