Cannabis stocks slammed as Aphria’s quarterly loss weighs on sector – MarketWatch

Cannabis stocks were a sea of red on Monday, weighed down by Aphria Inc. after it swung to a wide loss in the third quarter that outweighed a surge in revenue.

Aphria shares APHA, -14.86% APHA, -14.02%  fell 15% in early trade, after the Leamington, Ontario-based company posted a C$108.2 million ($81.1 million) loss for its fiscal third quarter, or 43 cents a share, after a profit of C$12.9 million, or 8 cents a share, in the same period a year ago.

Excluding nonrecurring items, such as noncash impairments and additional nonoperating losses, adjusted gross profit was C$13.4 million. FactSet does not provide consensus estimates for Aphria.

Revenue climbed to C$73.6 million from C$10.3 million in the first full quarter of Canadian legal cannabis. But the company sold less cannabis than a year ago—kilograms sold fell to 2,636.5 from 3,408.9, while the average retail selling price for medical cannabis increased to C$8.03 per gram from C$7.51, primarily because of higher oil sales. The average price for adult-use cannabis fell to C$5.14 from C$6.32, due to a shift to smaller package sizes.

The company said it took a C$50 million non-cash impairment charge on its Latam Assets that were acquired last September and later became the subject of a review by a special committee. That review was sparked by a report from short sellers Quintessential Capital Management and Hindenburg Research, who said the C$280 million deal involving companies in Argentina, Colombia and Jamaic raised red flags as their research suggested the assets were worthless.

The committee found conflicts of interest for some board members that were not disclosed to the board, as MarketWatch reported in February.

“Aphria’s earnings show a quarterly loss exceeding $100 million, negative margins, decreased production volume, regulatory scrutiny and a large write off for its Latin American

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