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article imageAphria shares gain after pot grower's CEO steps down

By Karen Graham     Jan 11, 2019 in Business
Canadian cannabis producer Aphria Inc.’s chief executive officer is stepping down following short-seller allegations that have hit the company’s stock.
The change in leadership came about when Aphria reported the results for the second quarter ended November 30, 2018, on Friday. The company says CEO Vic Neufeld and co-founder Cole Cacciavillani will transition out of their executive positions over the next few months, according to a press release.
The newly appointed chairman, Irwin Simon, and President Jakob Ripshtein, who joined the company from Diageo PLC in May, will “complete a smooth and responsible transition to a globally-minded executive leadership team,” the company said.
In a tweet on Friday, Quintessential said it felt it had been vindicated, and "with a new management team the company has a chance to a brighter future and we are accordingly moving on to new projects.”
Aphria's stock tumbled more than 50 percent on December 3 when the short seller report was made public, but it has since rebounded, recouping much of that, including a 6.2 percent gain to C$9.25 at 11:15 a.m. in Toronto, reports Bloomberg.
Neufeld denies his stepping down has anything to do with the short-sellers report, saying, “It was just time for us to move aside." Aphria’s newly appointed chairman, Irwin Simon reiterated that and called Neufeld and Cacciavillani “consummate entrepreneurs.” He added, “the Aphria dream would not have become a reality without them.”
Takeover offer being examined
On December 28, Ohio-based Xanthic Biopharma Inc., which does business as Green Growth Brands, announced its hostile takeover bid for Canadian cannabis producer, Aphria after stock markets closed.
Aphria rejected the planned C$2.8 billion ($2.1 billion) hostile offer, saying the bid significantly undervalued the company. GGB says its offer values Aphria at $11 per share or $2.8 billion at the time of the announcement and would be an all-stock transaction.
Neufeld said on Friday that an independent committee of directors with no relationship to Green Growth will review any formal offers.
Aphria reported revenue of C$21.7 million ($16.4 million) for the quarter ended Nov. 30, up 63 percent from the prior quarter, but slightly down from projected revenues. Net income was C$54.8 million or C$0.22 per share, compared with C$0.09 a share last quarter.
Aphria expects to produce 255,000 kilograms of pot by the end of 2019, up from 35,000 kilograms currently, as new facilities come online.
As of 1:37 p.m. January 11, 2019, Aphria shares were at $6.82, up $0.24 or 3.65 percent.
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