Aphria loses CA$361 million as cannabis revenue plunges 24%

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Leamington, Ontario-based cannabis producer Aphria reported a net loss of 361 million Canadian dollars ($287 million) for the three months ended Feb. 28, 2021, after its marijuana revenue plunged almost 25% over the previous three-month period.

That brings Aphria’s loss for the first three quarters of its fiscal year to CA$486.7 million.

Overall net revenue declined to CA$153.6 million in the quarter.

Cannabis sales accounted for only 44% of Aphria’s revenue from December through February.

Net cannabis revenue fell 24% from the previous quarter to CA$51.7 million in the quarter ended Feb. 28.

Distribution revenue declined to CA$87 million.

Net revenue from beverage-alcohol was CA$14.8 million, as the acquisition of American craft beer company SweetWater was rolled into Aphria’s books.

Aphria reported lower sales in all three of its main regions.

  • European net revenue fell to CA$85.2 million.
  • North American revenue declined to CA$67.2 million.
  • The company continued to struggle in Latin America, reporting only CA$1.3 million in sales.

Aphria blamed its recent poor cannabis sales on Canada’s January sales decline.

“The provincial boards took measures to lower their inventory levels through a combination of slower replenishments and product returns,” the company said in a regulatory filing.

That resulted in the company receiving product returns worth approximately CA$5 million, it said.

“In addition to these returns, (Aphria) continues to see consumers trend to large-format product labelled as higher potency and general declining pricing during the global pandemic,” management noted in an analysis of the quarter.

Aphria’s cannabis revenue has been flat for the past year, however, even as Canada-wide adult-use sales almost doubled over the same period.

The company said average selling price has been falling.

The average selling price of recreational cannabis, before excise tax, fell to CA$3.82 per gram in the quarter, compared with CA$4.29 per gram in the previous quarter, the company reported.

That contrasts with the average retail selling price of medical cannabis, which fell to CA$6.69 per gram.

Adjusted EBITDA for the quarter was a positive CA$12.7 million.

Cash and cash equivalents at the end of the quarter were CA$267.1 million.

Aphria trades as APHA on the Nasdaq and Toronto Stock Exchange.