• Record gross revenue for adult-use cannabis of $69.6 million in the first quarter, an increase of 23% from prior quarter and the sixth consecutive quarter of growth.
• Net cannabis revenue of $62.5 million in the first quarter, an increase of 103% from prior year quarter.
• Net revenue of $145.7 million in the first quarter, an increase of 16% from prior year quarter and decrease of 4% from prior quarter, solely due to lower distribution revenue driven by the COVID-19 global health crisis.
• Cash cost to produce dried cannabis per gram of $0.87 in the first quarter, a decrease of 1% from the prior quarter, and decreased for the fourth consecutive quarter.
• Adjusted EBITDA from cannabis business of $10.4 million in the first quarter, an increase of 11% from the prior quarter.
• Adjusted EBITDA of $10.0 million in the first quarter, an increase of 17% from the prior quarter.
• Ended first quarter with a strong balance sheet and liquidity, including $400.0 million of cash and cash equivalents to fund planned Canadian and International growth.
• Aphria transferred its stock exchange listing from the New York Stock Exchange to The Nasdaq Global Select Market (“Nasdaq”) on June 8, 2020. This transition did not impact the Company’s primary listing on the Toronto Stock Exchange (TSX: APHA).
• Filed Prospectus supplement for $100 million (USD) At-the-Market program (“ATM Program”) on July 29, 2020 which the Company plans to use for acquisition opportunities.
• Good Supply and P’tite Pof launched large-format SKUs, and launched new brand B!NGO, a large format, economy brand utilizing lower potency cannabis.

 Subsequent Events

• Aphria entered into a Strategic Supply Agreement with Canndoc Ltd. (“Canndoc”), a subsidiary of InterCure Ltd., (TASE: INCR/INCR.TA), one of Israel’s largest and most established medical cannabis producers on August 4, 2020.
• Liquidated the convertible note receivable from HydRx Farms Ltd.
• Company completed its first certified European Union Good Manufacturing Practices (“EU GMP”) shipment of dried flower from its Aphria One EU GMP facility to CC Pharma, a leading distributor of pharmaceutical products to more than 13,000 pharmacies in Germany.

Key Financial Highlights
(In thousands of Canadian dollars)

The average retail selling price of medical cannabis, before excise tax, increased to $7.38 per gram in the quarter, compared to $6.63 in the prior quarter. The average selling price of adult-use cannabis, before excise tax, decreased to $4.15 per gram in the quarter, compared to $5.23 per gram in the prior quarter, primarily as a result of the initial pipeline fill of new large format offerings, including the introduction of B!NGO, an economy brand utilizing lower potency cannabis.

Adjusted cannabis gross profit for the first quarter was $31.5 million, with an adjusted cannabis gross margin of 49.7%, compared to $28.1 million and 52.9% in the prior quarter. The increase in adjusted cannabis gross profit and decrease in adjusted cannabis gross margin was primarily due to the release of large format products and the pipeline fill for B!NGO, our economy brand utilizing lower potency cannabis, which provided an increase in sales but at lower margins than the Company’s other branded products.

Adjusted distribution gross profit for the first quarter was $11.8 million, with an adjusted distribution gross margin of 14.4%, compared to $11.9 million and 12.1% in the prior quarter. The decrease in adjusted distribution gross profit was a result of the previously discussed decline in distribution revenue at CC Pharma in Europe.  The increase in the gross margin was a function of sales mix and improved cost management at CC Pharma in the quarter.

Selling, general, and administrative costs in the quarter increased to $54.4 million from $116.6 million in the prior quarter, and increased from $41.4 million in the prior year. The increase from the prior year was primarily due to increased operating costs associated with increased global operations and increased selling costs associated with our higher sales.

Net loss for the first quarter of fiscal year 2021 was $5.1 million, or a loss of $0.02 per share, compared to net loss of $98.8 million, or a loss of $0.39 per share in the prior quarter, and net income of $16.4 million, or $0.07 per share for the same period last year.

Adjusted EBITDA increased by $1.4 million to $10.0 million for the first quarter compared to $8.6 million in the prior quarter. Adjusted EBITDA from the cannabis business for the first quarter was $10.4 million compared to $9.4 million in the prior quarter. The adjusted EBITDA loss from businesses under development for the first quarter was $2.8 million compared to a loss of $2.7 million in the prior quarter. Adjusted EBITDA from distribution business for the first quarter was $2.4 million, compared to $1.9 million in the prior quarter.

Since establishing its US$100 million  ATM Program on July 29, 2020, the Company has not drawn on the program.

The Company ended the first quarter with a strong balance sheet, including $400.0 million of cash and cash equivalents.