More nimble cannabis companies continue to outmanoeuvre Canadian giant Aphria

While Aphria struggles to find its place in a rapidly evolving market whilst smaller caps like Veritas Farms Inc (OTC: VFRM) quietly strengthen their position in the cannabis market

Aphria Inc is one of the few bright spots in a massively competitive cannabis sector that occasionally send signs of life and recovery attempts. The only problem is that previous recovery attempts lacked punch.

Hardly anything has changed since the company announced their last quarter figures. A first reaction to the figures initially led the share back to more than CA$7.0 ($5.32). With the range of CA$7.35 ($5.59), however, a first relevant hurdle then stood in the way and turned out to be a killjoy. However, the declared goal must still be to overcome the CA$7.7 / 8.0 ($5.85/$6.08) range. That would be an important signal. Currently it looks more like a re-test of the last low at CA$6.0 ($4.56). In short: the strong gains in response to the data obviously invited profit taking after a fresh signal (the CA$7.35 ($5.59) range had to be overcome) failed to materialize. The search for a sustainable bottom continues. The formation of new downward movements (below CA$6.0 ($4.56)) must continue to be avoided. Otherwise, a reassessment of the situation is necessary.

Aphria Inc has recently been able to come up with positive news. In addition to the current quarterly figures, the most recent announcement is that Health Canada has granted the company a cultivation license for Aphria Diamond, enabling it to massively expand its cultivation capacity.

The response to the news was initially positive. At the beginning of the week, the stock chased above the CA$7.0 ($5.32) mark, but was unable to maintain this level later in the trading. In this respect, the picture so far is similar to the trends we saw after the publication of the quarterly figures. Aphria shares ran out of steam even before hitting the CA$7.7 / 8.0 ($5.85/$6.08) zone, which we believe to be important.

Once again, the CA$7.35 ($5.59) range proved to be a “killjoy”. In short: from a technical chart perspective, the focus is currently on the CA$7.35 ($5.59) range. This obviously represents a veritable hurdle. It will be exciting if the share manages to beat the CA$7.35 ($5.59) mark. On the down side, the range of CA$6.0 ($4.56) seems to be properly hedged. Nevertheless, if it goes below that, the situation has to be reconsidered.

A rosier picture for Veritas Farms

While Aphria Inc shares struggle to pass certain technical hurdles, despite positive business developments, certain US companies perform in the legal cannabis sector better.

One example is Veritas Farms Inc (OTC: VFRM), a fully integrated cannabis grower, that demonstrates the potential of the cannabis sector. In Q2 2019, Veritas generated more than $2.9 million in total revenue. That is a 500% increase since Q2 2018.

Moreover, the company’s gross profits reached $1,523,413 and thanks to great results, managed to reduce liabilities by over $1.3 million. This growth has been driven by an aggressive plan to rapidly expand the company’s distribution network, which now includes over 4,000 retailers and partners. Veritas produces vegan capsules, gummies, tinctures, lotions, salves, vape oils, and oral syringes.

Veritas farms just closed a deal with Southeastern Grocers, so from now on the company’s CBD products will be sold in two supermarkets owned by them, 152 Winn-Dixie and Bi-Lo supermarkets, in Florida and South Carolina.

Veritas Farms has become increasingly popular in the last year, and the company’s continued focus to high-quality and transparency seems to be the key to dominance in the competitive cannabis environment.