Shares of Canadian licensed producer Aphria (NYSE:APHA,TSX:APHA) went on a sharp decline on Monday (December 3) on criticism seen in a new short seller report.

Data from Quintessential Capital Management and Hindenburg Research alongside comments from its founder Gabriel Grego on Monday called into question the path of the company and the value of its recent acquisitions in the Latin American market.


In the report, the firm states that the research makes it believe that “Aphria is part of a scheme orchestrated by a network of insiders to divert funds away from shareholders into their own pockets.”

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

Grego states that research has made it possible for him to think Aphria has spent over C$700 million on assets that Quintessential Capital deems “of almost worthless value.”

The game is they seem to go out, buy themselves very cheaply some companies in emerging markets and then sell them again, first to Scythian [Biosciences (CSE:SCYB)] and then to Aphria for gigantic valuations and we believe this has not been disclosed properly to investors.

Aphria’s share price suffered a double-digit hit on Monday on both the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE).

On the TSX the company closed at a decrease of 27.69 percent, while on the NYSE it was rocked with a 23.42-percent drop. During after-hours trading the stock continued its drop with an additional 5.62-percent decline.

In response, Aphria told the Investing News Network the allegations from the report are “false and defamatory.”

“The Company is preparing a comprehensive response to provide shareholders with the facts and is also pursuing all available legal options against Quintessential Capital,” said spokesperson Tamara MacGregor.

Quintessential Capital issued a tweet welcoming “any legal action from Aphria.”

Aphria also released a statement on Monday cautioning investors about “misrepresentations and distortions” in the report.

“Aphria believes [the report] is a malicious and self-serving attempt to profit by manipulating Aphria’s stock price at the expense of Aphria’s shareholders,” the company said.

In response, Quintessential Capital tweeted that the statement doesn’t clear any of the allegations raised. “We stand by our report with 100 [percent] conviction.”

In September, Aphria closed a transaction acquiring the Latin American assets of Scythian as it sought to establish its presence in the market.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

“This acquisition firmly cements Aphria’s leadership in the region and on the global cannabis stage,” Vic Neufeld, CEO of Aphria, said at the time.

According to Aphria, the transaction for ownership of a stake in Colcanna, ABP, Marigold Projects Jamaica and an undisclosed Brazilian entity was priced by “the assumption” of an existing US$1-million debt bill combined with the issuance of 15,678,310 common shares of Aphria.

The transaction was funded by the assumption of US$1 million of existing LATAM Holdings debt, with the remaining consideration funded by the issuance of 15,678,310 common shares of Aphria.

Short sellers in the public market will become the center of a new review from the Canadian Securities Administrators (CSA).

Last Thursday (November 29), the Financial Post reported the CSA will be kicking off a review project on “the nature and extent of abusive short-selling in Canadian capital markets.”

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.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

Matica Enterprises Inc. (CSE: MMJ) (FSE: 39N) (OTCQB: MMJFF) (“Matica” or the “Company”) is pleased to announce that, in connection with the previously announced share consolidation on a thirty (30) for one (1) basis (the “Consolidation”), the Company will be changing its name to West Island Brands Inc. (the “Name Change”).

The common shares are scheduled to begin trading on a post-consolidation basis at market open on October 20, 2021 under the stock symbol “WIB”. The new CUSIP number will be 953400108 and the new ISIN number will be CA9534001081. Following the Consolidation, the Company will have approximately 10,712,484 common shares issued and outstanding.

Keep reading... Show less

In the cannabis space this week, a popular beverage maker hired a new executive in hopes of pursuing opportunities in the cannabis drink industry.

Meanwhile, Canopy Growth (NASDAQ:CGC,TSX:WEED) announced a fresh acquisition agreement for a partner designed to boost its presence in a potentially available US adult-use cannabis market.

Keep reading... Show less

Via InvestorWireIBN (“InvestorBrandNetwork”), a multifaceted financial news and publishing company, today announces that it will be collaborating with Microdose Psychedelic Insights for the Psych e delic Capital: October 2021 Conference which is set to be held in an entirely virtual format on Oct. 28, 2021.

The Psychedelic Capital: October Conference is set to be a virtual event, covering the most innovative and cutting-edge companies, latest IPOs, newest opportunities and deepest insights into the global psychedelic industry. From exploring ongoing governmental policy shifts to commercial product breakthroughs, the conference will serve to educate attendees on the potential uses and benefits attached to psychedelics in today’s environment.

Keep reading... Show less

 Adastra Holdings Ltd. (formerly Phyto Extractions Inc.) (CSE: XTRX) (FRA: D2EP) (“Adastra” or the “Company”) today announced positive operational and financial developments as the Company continues to pursue its mission to be a leader in the development and manufacture of pharma-quality, cannabis API and derivative products. These developments include record shipments in September, product portfolio expansion, and continued progress with Health Canada regarding its Controlled Substances Dealers License application.

Record September Shipments
Adastra shipped 68,272 consumer-packaged units and 20,000g of bulk extract in September compared to 41,571 units in September 2020 , a 64% increase year over year.

Keep reading... Show less

Matica Enterprises Inc. (CSE: MMJ) (FSE: 39N) (OTCQB: MMJFF) (“Matica” or the “Company”) is pleased to announce that, pursuant to a director’s resolution, the Company will be consolidating its issued and outstanding share capital on the basis of every thirty (30) old Common Shares being consolidated into one (1) new Common Share (the “Share Consolidation”). Any fractional shares remaining after giving effect to the Share Consolidation will be cancelled.

As a result, the outstanding Common Shares of the Company will be reduced to approximately 10,712,484. The Company has no other securities outstanding.

Keep reading... Show less