Aphria is building inventory to be ready Interesting that Aphria stopped wholesales in April to build up inventory for legalization! I wasn't aware of this. Very bullish since retail revenues will make the already nice financials even better!
It becoming harder to aggressively trade this stock, very glad I loaded up today on the short term dip!
"Canada has a population of about 36.7 million, according to
Statistics Canada, with the four largest provinces representing 31.7 million, or 86% of the population. Here are those top 4 provinces, ranked by population:
- Ontario (14.2 million): Employing a government monopoly, with plans to have 80 Ontario Cannabis Stores open by July 1, 2019 and permitting online purchases for delivery within the province. No supply agreements announced yet.
- Quebec (8.4 million): Employing a government monopoly, with supply agreements with six producers totaling 62 million grams in the first year, including Aphria, Aurora Cannabis, Canopy Growth, Hydropothecary, MedReleaf and Tilray.
- British Columbia (4.8 million): Employing a hybrid distribution system, with government-run and private stores. No supply agreements have been announced, and licensed producers will not be able to sell their own product in their own stores
- Alberta (4.3 million): Employing private distribution through liquor stores overseen by the Alberta Gaming and Liquor Commission, with in-province e-commerce operated directly by the AGLC. Licenses haven’t yet been awarded.
Here is the complete list of the remaining provinces and territories, sorted alphabetically, and how they are going about distribution:
- Manitoba (1.3 million): 4 master licenses held by private sector companies
- New Brunswick (759K): Government-run stores operated by NB Liquor, with supply agreements awarded to three LPs, including Canopy Growth, Organigram and Zenabis.
- Newfoundland and Labrador (529K): Private stores with no licenses yet awarded and a government-run online store, with Canopy Growth supplying 8 million grams in the first year
- Northwest Territories (44K): No announcement yet beyond distribution through private liquor stores
- Nova Scotia (954K): 9 government stores initially, with online purchasing available (no details on suppliers)
- Nunavut (38K): Undecided
- Prince Edward Island (152K): 4 government-run stores supplied by Canada’s Island Garden, Canopy Growth and Organigram for 1 million grams each, with online purchasing available
- Saskatchewan (1.2 million): Private retailers not yet announced (1500 applications received for about 51 stores) and no supply agreements yet announced with local producers
- Yukon (39K): Government-run stores, with supply agreements with Canopy Growth and Tilray
At this point, it seems unlikely that many points of sale will be open initially. Further, with the exception of Quebec, none of the other larger provinces have supply agreements in place.
Insufficient Inventory
While there are likely to be few stores open in the provinces, the bigger issue is that the supply of cannabis is likely to fall short of demand. With the exception of Canopy Growth, most LPs have very limited inventory, and recent levels of production suggest that inventories are likely to not grow substantially over the next few months, especially as some LPs meet medical patient and export demand. Aphria announced in April that it is shutting down its wholesaling to support inventory growth ahead of legalization."