Check out the latest Aphria earnings call transcript.

Aphria (NASDAQ:APHA) has taken investors on a roller-coaster ride over the last several months. The Canadian marijuana stock plunged in December after short-sellers alleged that the company overpaid for international acquisitions and lined the pockets of key insiders in the deal. A hostile takeover attempt by U.S.-based marijuana producer Green Growth Brands (GGB) caused the stock to rebound later in December.

Investors were understandably anxious to hear what Aphria's management team had to say on Friday when the company discussed its performance in its fiscal 2019 second quarter, which ended on Nov. 30, 2018. Here are the only five things you really need to know from that update. 

Marijuana leaf with a pile of cash in the background

Image source: Getty Images.

1. What's up

Aphria's net revenue soared 155% year over year and 63% above the previous quarter to 21.7 million Canadian dollars ($16.4 million). The opening of the Canadian recreational marijuana market on Oct. 17, 2018, provided a big boost for Aphria. 

The company's net income also increased dramatically, up nearly 750% year over year to CA$54.8 million. However, this huge jump stemmed from Aphria's divestitures of positions in Hiku Brands, which was acquired by Canopy Growth, and Liberty Health Sciences.

Two increases weren't so great. Aphria reported that its "all-in" cost of goods sold per gram rose 42% from the previous quarter to CA$2.60. Its cash cost per gram to produce dried cannabis grew 35% quarter over quarter to CA$1.76. The company attributed the increases to higher packaging costs associated with recreational marijuana products, plus higher costs and temporarily lower yields related to its expansion efforts.

2. What's down

Aphria's adjusted gross margin dropped from 67.7% in the prior-year period to 46.9% in Q2. This decline stemmed from lower average selling prices in the recreational marijuana market and higher production costs associated with the company's expansion at its Aphria One facility.

As you might expect, this also hurt Aphria's adjusted EBITDA. The company announced negative adjusted EBITDA of CA$9.5 million. Aphria posted a negative adjusted EBITDA in fiscal Q1 of CA$3.96 million.

Aphria also continued to burn cash. The company reported cash, cash equivalents, and marketable securities totaling CA$184.8 million as of Nov. 30, 2018. This reflected a big drop from the nearly CA$314 million on hand at the end of the previous quarter.

3. Who's out

The biggest news for Aphria had to do with the resignations of CEO Vic Neufeld and co-founder Cole Cacciavillani from their executive roles with the company. Neufeld stated that he and Cacciavillani didn't make their decisions to step down because of the controversy over short-seller allegations. Instead, he said that "it was just time for us to move aside."

Both Neufeld and Cacciavillani will remain on Aphria's board of directors. They will also help during the transition period as the company looks for a new CEO. 

4. What's on the way

Obviously, one development on the way is a new CEO for Aphria. The company didn't provide any details on how long a search might take.

Aphria's special committee of independent board directors is also still reviewing the allegations made by short-sellers about the company's acquisition of LATAM Holdings. Vic Neufeld said that the committee is "making good progress" but didn't say when the review would be completed. He added that several journalists and analysts have examined Aphria's disclosures relating to the LATAM acquisition and visited the acquired facilities, leading them to refute the short-sellers' allegations.

Another independent special committee has been formed to review any proposals of mergers or acquisitions. Aphria established this committee following the hostile takeover offer from Green Growth Brands. Neufeld reiterated the company's previous stance that the GGB offer "significantly undervalued" Aphria.

Aphria still hasn't received licensing for its Aphria One and Aphria Diamond expansions. Neufeld noted that Health Canada is backlogged and is "working as best they can" to deal with an onslaught of license applications and amendments from many companies. While he wouldn't speculate on how quickly Aphria will receive its approvals, Neufeld said that he still expected the company to be on track for an annual production capacity of 255,000 kilograms (roughly 562,000 pounds) by the end of 2019.

5. What really matters 

Aphria's fiscal Q2 numbers really don't matter very much in the big scheme of things. Neither do the delays in receiving approvals for its new growing space. So what does really matter? The growth opportunities for the company and its ability capitalize on those opportunities.

Vic Neufeld said that "the future has never looked brighter" for Aphria. In several ways, he's right.

Demand for recreational marijuana in Canada has been very high, dispelling any doubts that initial projections were too optimistic. Countries across the world are legalizing medical marijuana like dominos falling in a row. The U.S. has legalized hemp, with the prospects for changes to federal marijuana laws looking better than ever.

Neufeld also stated that Aphria's "journey, regardless of external noises, is based on sound and solid strength built to last." Some might question that statement, but I suspect that he's right on this count as well.

I also think that the decisions that he and Cole Cacciavillani made to step down improve the likelihood that Aphria will succeed over the long run. A new CEO, along with Irwin Simon taking over as independent chairman of the board, should help restore investors' confidence in Aphria. And that could mean 2019 will be a much better year for this beaten-down marijuana stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.