Aphria Inc. (TSX:APH), one of the few marijuana stocks to stay in the black as cannabis went legal in Canada this week, submitted a Form 40-F to the U.S. Securities and Exchange Commission on Thursday, effectively announcing their intention to list on the New York Stock Exchange. The form, used when Canadian companies make a move to a U.S. exchange, makes Aphria just the latest in a slew of Canadian cannabis companies to go public in the U.S., taking advantage of investor sentiment to go after capital south of the border.
Aphria follows companies such as Cronos Group Inc. (NASDAQ:CRON) and Canopy Growth Inc. (NYSE:CGC) who listed on U.S. exchanges earlier this year, as well as Aurora Cannabis (TSX:ACB) who filed the same Form 40-F just a few weeks prior. It’s a move that only those in the Canadian cannabis industry can make, as federal law prohibits U.S. marijuana business from listing on American exchanges.
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However, some in the states, such as Terra Tech Corp.’s (OTCMKTS:TRTC) CEO and Chairman Derek Peterson are fighting for the right to makes such moves, arguing that U.S. companies are at a strong disadvantage to their northern counterparts.
“Aphria will provide additional details, including an anticipated trading date and NYSE ticker symbol, as soon as they become available and all requisite approvals are received,” said spokesperson David Ryan in a statement to BNN Bloomberg.
The news also comes on the same day as Aurora Cannabis announced that it would begin trading on the NYSE next Tuesday.
Aphria trades in the black
Despite a volatile year for the Licensed Producer, Aphria’s stock held strong on Wednesday, the first day of recreational cannabis sales in Canada. It was a stark contrast to the rest of the industry, which saw a not-significant price drop. Aphria stock rose CAD$0.71 per share to CAD$19.40 on Wednesday while closing up another CAD$0.05 on Thursday to end the trading day at CAD$19.45.
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While recently, Aphria CEO Vic Neufeld was heard addressing the looming cannabis shortage in Canada, he was also quoted as saying that an oversupply will cause prices to drop within the year. According to The Blunt Investor Neufeld said that an oversupply would be inevitable.
“There will be an over-supply in 12 months from today,” said Neufeld.
Neufeld also believes that technology will factor into a price drop within the near future as well. According to The Blunt Investor, Aphria is a low-cost producer in the space and will be able to lower costs through technology in the near future.
“If licensed producers don’t have their house in order today in terms of cost per gram, how are they ever going to get it together to meet price compression a year from now,” said Neufeld.