Pot Grower Aphria Surges After Its Online Pharmacy Sales Pact
(Bloomberg) -- Aphria Inc., a Canadian medical marijuana grower, surged after striking a deal to have its production sold through the website of a major pharmacy chain.
Aphria jumped as much as 30 percent in Toronto trading Tuesday. The shares were up 15 percent at C$13.67 at 9:54 a.m. local time.
The Leamington, Ontario-based company agreed to supply Shoppers Drug Mart, part of retail group Loblaw Cos., it said in a statement Monday. The weed is expected to be sold online as current Canadian regulations restrict the sale of cannabis in retail pharmacies.
“It’s really a huge reach-out to thousands of doctors who probably today have not” yet written marijuana prescriptions, Aphria Chief Executive Officer Vic Neufeld said on a conference call following the announcement. “When a pharmacist is involved in the process, they become a lot more agreeable or receptive or comfortable in writing a script.”
The agreement comes amid a frenzy surrounding Canada’s nascent marijuana market as the country is poised to legalize recreational pot by July. Canaccord Genuity Group Inc. estimates sales could reach C$6 billion ($4.7 billion) annually by 2021 and medical sales could reach C$1.8 billion.
“There are 1,300 Shoppers Drug Mart and Pharmaprix locations across the country,” Beacon Securities analyst Vahan Ajamian said Tuesday in a note. “We see this five-year agreement as a major milestone for Aphria and for the sector at large.”
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