Aphria (NYSE:APHA,TSX:APHA) will not pick up its purchase option for a US-based multi-state operator (MSO) of cannabis assets.
On Tuesday (February 19), Aphria’s independent board members Shlomo Bibas, John Herhalt, Tom Looney and Irwin Simon confirmed the company would be ditching a clause in a sale agreement for a controlling stake in Liberty Health Sciences (CSE:LHS).
“The Early Termination and Liquidation represents the ultimate conclusion of Aphria’s investment in Liberty,” the company informed shareholders.
Aphria confirmed from its first investment of C$25 million in Liberty, which was set to be branded “Aphria USA,” that it gained a return of 3.4 times its cumulative investment.
As part of the termination from the independent board members, the company secured a cash consideration of C$47.4 million.
In a statement to the Investing News Network (INN) George Scorsis, CEO of Liberty, said his company has never been “more optimistic about its growth trajectory and the opportunities to create value for its shareholders moving forward.”
Aphria was originally forced to divest its stake in Liberty due to a challenge from exchange regulators, TMX Group, requesting the LP to drop any operations in the US or face the consequences and potential delisting from the exchange.
After a back and forth with regulators, Aphria moved forward looking for an opportunity to get rid of its stake in Liberty and eventually sold its share in the Florida-based MSO to an undisclosed group of buyers in September 2018.
The LP sold a “five-year promissory note due September 6, 2023 bearing interest at 12 [percent] per annum,” for close to over C$59 million. This meant Aphria could repurchase its stake of over 64 million shares in Liberty.
“We intend to be a significant player in the US cannabis industry at the appropriate time in the future,” Vic Neufeld, CEO of Aphria at the time, said of the sale.
Scorsis previously told INN the expectation was for his company to be used as Aphria’s “horse” in the US market race.
While marijuana remains illegal under a federal level in the US, Aphria planted an option with Liberty as a way to eventually enter the US market once it may become legal to do so.
Shares of Aphria in New York took a marginal 0.10 percent dip following the announcement in after hours trading on Tuesday.
At the start of the trading session on Wednesday (February 20), both Aphria and Liberty were up in value over 3 percent and nearly 2 percent respectively at 10:45 a.m. EST.
At the same time the Canadian firm is dropping Liberty, experts of the cannabis space agree MSOs are all the buzz with investors.
Aphria attempts to move past short seller reports
The move by the Canadian marijuana firm reinforces the effects from a short-seller attack from two independent groups, Quintessential Capital Management and Hindenburg Research.
The reports targeted purchases from Aphria in the Latin American market. Aphria’s dealings with Liberty were also challenged by the short sellers in a separate note.
While these reports were later debunked for the Latin American operations, Aphria installed a new independent board and offered a full rebuttal to the short sellers.
“Based on further information available to the Special Committee, it appears that certain of the non-independent directors of the Company had conflicting interests in the Acquisition that were not fully disclosed to the Board,” the announcement from Aphria indicated regarding the Latin American acquisitions.
Despite the rebuttal, Aphria’s executive team was rocked with the transition from Neufeld and co-chair Cole Cacciavillani, both co-founders of the firm. John Cervini, director of the company also will be removed from his role starting in March.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
In the evolving rush of mergers and acquisitions (M&A) in the Canadian cannabis market, Canopy Growth (NASDAQ:CGC,TSX:WEED) announced it will acquire The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) in a deal worth approximately C$435 million.
Meanwhile, a cannabis operator in the US confirmed this week that it will receive a financial boost from a partner to solidify its position in the burgeoning Pennsylvania state market.
The Board of Directors of Aphria Unanimously Recommends Shareholders Vote “For” the Arrangement
Aphria to Host Special Meeting of Shareholders on Wednesday, April 14, 2021 to Approve Proposed Aphria-Tilray Business Combination
Love Hemp Group PLC (AQSE: LIFE) (OTCQB: WRHLF), one of the UK’s leading CBD and Hemp product suppliers, announces that as part of the equity fundraise announced yesterday, Antony Calamita and Andrew Male, Directors of the Company, subscribed for 285,714 Ordinary Shares and 1,428,571 Ordinary Shares respectively. The subscriptions are at a price of 3.5 pence per ordinary share for a total of £60,000. Following these subscriptions, Antony Calamita is now interested in 54,385,714 Ordinary Shares, representing 8.61% of the Company’s share capital as increased by the fundraising, and Andrew Male is now interested in 6,138,196 Ordinary Shares, representing 0.97% of the Company’s issued share capital as increased by the fundraising
Further, the timetable for receipt of applications under the Broker Option, which was also announced yesterday, has been extended until 5:00 pm 9 April 2021 to capture additional interest which was unable to be completed yesterday.
Revive Therapeutics Ltd. (“Revive” or the “Company”) (CSE: RVV, USA: RVVTF), a specialty life sciences company focused on the research and development of therapeutics for medical needs and rare disorders, would like to provide the following dial-in information for the Company’s upcoming Annual and Special Meeting (the “Meeting”) scheduled to be held at 11:00 a.m. Eastern Daylight Time on April 12, 2021. Shareholders and proxyholders may access the Meeting via teleconference by dialing 647-723-3984 or 1-866-365-4406 from Canada or the United States, then entering participation code “8487744” followed by the pound (“#”) sign.
In consideration of the COVID-19 pandemic and the recent restrictions imposed by the Ontario Provincial Government, shareholders and proxyholders will only be able to attend the Meeting via teleconference and will not be permitted to attend the Meeting in person at the address provided on the Notice of Annual and Special Meeting of Shareholders.
Gage Cannabis Announces Exclusive Partnership With Blue River to Bring Award-Winning Cannabis Extracts to Michigan
Gage Growth Corp. (“Gage” or the “Company”) (CSE:GAGE), a leading high-quality craft cannabis brand and operator in Michigan, announced today that it has signed an agreement with Blue River™ Extracts & Terpenes (“Blue River™”) to bring the brand’s award-winning solventless technology and other trademark branded products to the state’s medical patients and cannabis consumers. The Company will have exclusive rights to Blue River™’s premium product offerings in Michigan.