APHA Stock Forecast: Aphria Inc plummets as cannabis sector gets hammered

  • NASDAQ:APHA drops by 6.70% as the broader markets experience a small correction on Thursday.
  • Aphria and Tilray both crash as the cannabis heavyweights prepare for their impending merger.
  • Analysts side with Aphria as Tillray continues to get downgrades from Wall Street.

NASDAQ:APHA has had a stellar 2021 so far like much of the cannabis industry has, but that came to a screeching halt on Thursday as the broader markets hit a minor speed bump. Aphria’s stock fell by 6.70% and closed the bumpy trading session at $19.23, which is still well above its 50-day and 200-day moving averages. The Ontario, Canada-based company has rewarded its investors so far this year returning over 160% even though the stock has fallen since peaking at a 52-week high of $32.29 earlier this month. 

Much of the talk around Aphria this year has revolved around its impending merger with Tilray (NASDAQ:TLRY), one of the leaders of the Canadian cannabis industry. Tilray surprised Wall Street and investors this past week with a better than expected earnings report which included strong fourth-quarter revenues and steadily growing margins. Despite this, several analysts still downgraded Tilray for the long-run, citing that the Nanaimo-based firm may not be strong enough to stand on its own for much longer. The merger with Aphria seems to be happening at just the right time for Tilray, which also saw its stock fall by 14% on Thursday. 

APHA stock price

APHA stock price chart

Aphria CEO Irwin Simon will be running the new merger which will still operate under the Aphria brand. Both companies will look to leverage each other as they plan to expand operations into Europe’s medicinal marijuana market once the deal is settled. At this point, with European countries already legalizing cannabis for medical use, the continent may be a more profitable point of entry as the United States still awaits federal legalization. Besides, there are already plenty of American cannabis companies in operation for when that legislation inevitably occurs. 

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