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Why Aphria Inc. Rallied 3.18% on Thursday


Medical cannabis producer Aphria Inc. (TSX:APH) rallied 3.18% on Thursday following its announcement of a $10 million equity investment in the proposed combination of TS BrandCo. Holdings Inc. and DOJA Cannabis Company Limited.

So what?

The combination of TS BrandCo., which operates as “Tokyo Smoke,” and DOJA Cannabis would “bring together two premium lifestyle brands to serve the anticipated recreational cannabis market” and is expected to be renamed Hiku Brand Company Ltd.

Vic Neufield, the CEO of Aphria, went on to make the following statement:

“This exciting announcement marks a major step forward in Aphria’s recreational cannabis strategy and represents Aphria’s first venture into the lucrative British Columbia premium cannabis market. In Hiku, we are investing in refined, up-market brands that align with our commitment to encouraging a more dignified positioning of recreational cannabis use, something we expect will be an important and valuable differentiator for Aphria as Canada moves closer to legalizing recreational cannabis. We look forward to working closely with Hiku to support its success and brand leadership in the recreational market.”

Now what?

Aphria has been a deal-making machine this month, as it just entered an agreement to become a medical cannabis supplier to Shoppers Drug Mart on December 4. Aphria has now solidified itself as one of the leaders in both the medical and recreational cannabis markets, which will make it an absolute force in the industry going forward, and I think this will lead to incredible growth for the company following legalization.

Aphria’s stock has soared more than 89% since I first recommended it on October 16, and I think it still has enormous upside from here, so Foolish investors should strongly consider beginning to scale in to long-term positions over the next couple of trading sessions.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.

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