It's been an eventful year for Aphria (NYSE:APHA), the third-largest Canadian cannabis company (by revenue). In fact, it's been an eventful six months. Not only is the company grappling with the challenges of a cutting edge industry, but Aphria was targeted by accusations of self-dealing by two short-seller reports  last December.

The short-seller reports from Quintessential Research and Hindenburg Research  says Aphira overpaid for "largely worthless" assets in Latin America (consisting mostly of cannabis licenses) that appear to have been owned by members of the company's management, a fact that wasn't properly disclosed.

Co-founders Cole Cacciavillani and Vic Neufeld, who was CEO, resigned in January, and then left the board effective March 1. Neufield said the duo stepping down had been planned. 

An internal investigation from independent members of Aphira's board of directors concluded Aphria purchased the assets at the high end of an acceptable range for similar industry transactions but that "certain of the non-independent directors of the company had conflicting interests in the acquisition that were not fully disclosed to the board" prior to the board's approval. On its next earnings call (after former management had departed), the company wrote down CA$58 million of the CA$225 million Latin American acquisitions -- the result of an impairment test requested by the Ontario Securities Commission. 

The company is trying to put its self-dealing scandal behind it and rebrand and restart. With new management in place and its non-cash impairments behind it, the company is embarking on a huge production ramp over the next two years. Here's a look at "the new Aphria", and what it could potentially look like a year from now.

A hand holds a marijuana leaf up to the sun overhead in front of green farmland below.

Is Aphria a turnaround story? Image source: Getty Images.

Leadership overhaul

Good news for Aphria shareholders: The new management team is both experienced and untainted by the previous scandals. Lead independent board member Irwin Simon is now interim CEO. Simon was co-founder and CEO of organic food company Hain Celestial (NASDAQ:HAIN), leaving after 25 years.

Simon recently brought in several new team members and board members from the organic food industry including James Meiers as Chief Operating Officer, Tim Purdie as Chief Information Officer, and Maureen Berry as Chief of Human Resources. Meiers came from Hain Celestial, where he worked after a stint at Kraft Heinz (NASDAQ: KHC). Purdie has experience at Opentext and Blackberry (NYSE: BB). The two new board members are Whole Foods co-founder Walter Robb, and David Hopkinson, who was head of global partnerships for the soccer team Real Madrid.

While the investing community may have qualms with green management teams at other cannabis companies, these organic food industry veterans at the helm should give Aphira investors some comfort.

Growing their growing

By next year, Aphria will seem totally different in terms of scale. Aphria is currently only producing from phases I-III of its Aphria One greenhouse facility; however, the company recently received approval for its Part IV and V expansions, which will take the facility up to 1,100,000 square feet, capable of producing 110,000 kilograms annually.

This production has yet to show up in the company's financials. In preparation for the new greenhouses, Aphria also had to limit production from its current facilities last quarter to nurture mother plants that will provide seed for the new spaces. That not only limited production to just 2,636 kilograms, but also drove production costs up to $1.48 per gram, from $1.34 in just the prior quarter, leading to an ugly earnings report.

Ramping up to 110,000 kilograms by next year would mean selling 22,500 kilograms quarterly -- roughly 10 times what Aphria sold last quarter. The company is also implementing "sophisticated and proprietary automation technology" at Aphria One to drive down the costs of goods sold on the growing side, but also the packaging side, which management says has been inefficiently sourced in the past.

In addition to Aphria One, the company is also 51% owner of Aphria Diamond, an even larger 1.3 million square foot facility. Aphria Diamond hasn't yet secured a final cultivation license, but once that comes through, Aphria thinks it can begin production by the end of its first fiscal quarter, which ends in August.

Rounding out Aphria's production assets are its Broken Coast facility, which is smaller but caters to a higher-end product, as well as the company's extraction Center for Excellence (still under construction), which will focus on turning Aphria's cannabis into manufactured products.

Expanding overseas

Finally, Aphria will soon be selling more products overseas, especially in the new German market. Aphria recently obtained a German cultivation license in April, purchased German importer and distributor CC Pharma GmbH, and took a minority stake in a German hospital. This entrance into Germany could pay off big, as the German market has the potential to be the largest medical cannabis market in Europe, with the Brightfield Group estimating $8 billion in medical cannabis sales by 2023.

Will 2020 be Aphria's year?

Aphria is currently one of the least-expensive cannabis stocks on a price-to-sales basis, likely due to the recent management turnover and its disappointing recent quarter.

APHA PS Ratio (Forward) Chart

APHA PS Ratio (Forward) data by YCharts

However, with a new, experienced management team at the top and an aggressive growth strategy just being implemented, Aphria could be worth a look for turnaround-oriented investors in the cannabis space.