Canada: Aphria's strategy for legalization of recreational marijuana

Canada is soon going to be the first G7 nation to legalize the use of marijuana for recreational purposes by adult consumers. This revolutionary law is anticipated to open up a new and extremely lucrative market for cannabis companies in the country. According to market assessment, the sales of Canadian marijuana are expected to go up by more than $4 billion in the first year of its legalization.

Given this vast opportunity, Aphria has announced its plan to spend $55 million to build an extraction facility in Leamington, which is the greenhouse capital of Canada. This state-of-the-art Extraction Center of Excellence will be equipped to produce world-class cannabis concentrates, including fractionated distillates and will be able to process around 200,000 kgs of cannabis every year. The facility is scheduled to release its first concentrates by March 2019.

In addition to this new facility, the company also has plans to spend an additional $20 million at its Aphria Diamond facility to increase capacity by 20,000 kgs annually and $10 million to add 10,000 kgs of capacity to its Aphria One operations. With this expansion, the company’s combined annual cannabis production capacity will increase from its current 35,000 kgs to 225,000 kgs in early 2019. With the rapid increase in its processing capacity, Aphria’s revenue as well as earnings are likely to surge in 2019.

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