New Proposed Federal Tax Plan for Cannabis Underscores Need for Low Cost Producers

Thursday, October 5, 2017 General News
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As noted in the Company's fourth quarter and year end disclosure, the stated cost of $0.79/gram is Aphria's cash cost to produce dried cannabis / gram using "competitors' definition" of cash costs. While the Company believes strongly in its historical definition of cash costs to produce dried cannabis per gram, certain of its publicly traded competitors are disclosing a similarly titled metric but for which they are using a different definition of cash costs. The primary differences between Aphria's historical definition and certain competitors' definition is that Aphria's definition includes the costs related to indirect labour expenses and quality control costs. Aphria believes that both of these expenses should be included in any cash cost calculation. However, for the sole purpose of presenting a figure which is comparable to this other definition, we re-calculated our cash costs to produce dried cannabis per gram by deducting so-called post production costs from our cash cost to produce dried cannabis and divided that sum by gram equivalents sold in the quarter. Using this definition of cash costs to produce dried cannabis, Aphria's fourth quarter figure is $0.79 per gram.



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