Aphria Stock Forecast 2018
Aphria Inc (OTCMKTS:APHQF), (TSE:APH) has had a very busy last few weeks. Between sell-offs of U.S. assets, a CA$230.0-million acquisition, and the approaching marijuana legalization in Canada, the company has had a glut of news pouring in of late. With the Aphria stock forecast 2018 looking positive, however, APHQF stock is looking to capitalize on the opportunities it made for itself and be one of the top picks of the marijuana market this year.
Lately, weed stock predictions have been tricky to nail down. The huge boom of late 2017 led to high double-digit and even triple-digit gains across the industry, only for a market correction to hit in January.
While all of that was fairly predictable, the market is currently watching to see when the rally will truly take hold. While Aphria did make a mini-recovery from its January woes, Thursday’s movement was static and it seems a strong industry-wide rally has still yet to come.
Having said that, I believe that in the near future—we’re talking weeks, maybe months—we’re going to see a bounce back across the marijuana industry, with APHQF stock being one of the more solid options for investors for reasons we’ll delve into later in this piece.
Chart courtesy of StockCharts.com
But if you’re just looking for a hot take, our Aphria stock forecast 2018 is signaling that gains are on the way for the company, with my belief that it will surpass its all-time high in January and likely hit $20.00 per share this summer.
How Canada Marijuana Legalization Could Boost the Stock
When it comes to the Aphria stock forecast 2018, no analysis is complete without mentioning the elephant in the room…or should I say moose?
Canada is going to be the first developed nation in the world to implement total legalization. That means a codified federal law that enshrines the drug as a legal good, meaning that across Canada, citizens will be free to indulge in all the green herb they desire.
How Canada marijuana legalization could boost the stock is rather plain at this point, but it helps to remember that we’re talking about a multi-billion-dollar market that’s only set to grow. About 4.9 million Canadians aged 15 to 64 spent an estimated $5.7 billion on weed in 2017, which amounts to about a quarter of the alcohol market and about a third of the tobacco market in the country.
These, of course, are pre-legalization numbers, so expect growth.
Canada marijuana sales also reached all-time highs in the country. Again, all this without the benefit of legalized recreational marijuana.
Canada’s marijuana legalization makes the Aphria predictions 2018 a good bit easier to make because the momentum in the market will likely propel it and many other weed stocks into the stratosphere.
It’s also important to note that while Canada looks to legalize weed, its southern neighbor is taking the opposite approach.
Since the beginning of the Trump administration, some have feared that a U.S. crackdown on marijuana is imminent.
That has more to do with Attorney General Jeff Sessions than President Donald Trump. Trump has taken a muted stance on marijuana, while Sessions continues to deride the drug as harmful.
While states have legalized marijuana to varying degrees across the union, the drug is still a federally classified illegal substance, and therefore technically prohibited across the entire country.
The more aggressive tone adopted by this White House compared to the previous administration led TMX Group Ltd (TSE:X)—which runs the Toronto Stock Exchange (TSE)—to warn cannabis companies that they had to divest from American cannabis assets or face a potential delisting, all of which was brought about by the U.S.’s change in attitude towards pot.
Aphria responded in a reasonable fashion, selling off its 26.7 million shares in Liberty Health Sciences Inc. (CNSX:LHS), (OTCMKTS:LHSIF) in order to avoid butting heads with Canada regulators.
The move did not impact Aphria stock and saved the company a headache, which is a win-win in my book and shows a maturity and fundamental business savvy that makes APHQF all the more enticing.
The company also acquired Broken Coast Cannabis Inc. in a blockbuster CA$230.0-million deal. (Source: “Aphria buying Broken Coast Cannabis for $230M in stock and cash,” CBC, January 15, 2018.)
These types of acquisitions are, again, evidence of savvy business acumen on Aphria’s part, allowing the company to carve out additional space for it to take a bigger share the market when legalization does eventually hit.
Should You Consider an Aphria Investment?
Everybody is on the lookout for the best marijuana stock for 2018. To be fair, “best” is a subjective term.
If you want the highest possible gains, then you have to be willing to assume more risk from volatility. That’s the trade-off you generally have to make. As such, “best” for you may be double-digit gains in a short few weeks, only to ditch the stock later and reinvest.
For others who are looking for a long-term approach, you could certainly do worse than APHQF stock.
The company has made strong moves toward increasing its production capacity, keeping regulators happy and positioning itself to take full advantage of the market when legalization does come.
The Broken Coast Cannabis takeover and its U.S. asset sale show that the company is making the right moves to stay on the level and maintain a strong position in the industry.
I believe that APHQF will pan out to be one of the better marijuana stock picks in 2018, with a strong chance to continue with its success into 2019 as well.