Aphria CEO and co-founder step­ping aside from ex­ec­u­tive

Kingston Whig-Standard - - BUSINESS - ARMINA LIGAYA

Aphria Inc.’s chief ex­ec­u­tive will step down from the top job cit­ing the “toll on health, fam­ily and per­sonal pri­or­i­ties,” but Vic Neufeld says the de­ci­sion is un­re­lated to re­cent short-seller al­le­ga­tions that have hit the cannabis pro­ducer’s stock.

The Leam­ing­ton, Ont.-com­pany also an­nounced Fri­day that co­founder Cole Cac­ciav­il­lani will also leave his cur­rent role as vi­cepres­i­dent grow­ing op­er­a­tions in the com­ing months, but both he and Neufeld will re­main on the board.

The past five years have been an “in­cred­i­ble jour­ney” but it is time for a “glob­ally minded” ex­ec­u­tive team to lead Aphria into the next chap­ter, said Neufeld.

“It was just time for us to move aside,” he told an­a­lysts on a call dis­cussing Aphria’s lat­est quar­terly earn­ings. “This has noth­ing to do with the short-sell­ers’ re­port, the re­view, the val­u­a­tion of as­sets ... It was time.”

Neufeld said he and Cac­ciav­il­lani will be­gin the tran­si­tion process im­me­di­ately and step down from their ex­ec­u­tive po­si­tions “at the ap­pro­pri­ate time.”

Aphria’s in­de­pen­dent chair­man Ir­win Si­mon and pres­i­dent Jakob Rip­sh­stein will man­age the tran­si­tion.

Neufeld and Cac­ciav­il­lani are “con­sum­mate en­trepreneurs and the Aphria dream would not have be­come a re­al­ity with­out them,” Si­mon said on the con­fer­ence call.

“Dur­ing this tran­si­tion pe­riod, we’re go­ing to work hard to ben­e­fit from their men­tor­ship,” he added.

Shares of Aphria Inc. rose by as much as 9.6 per cent on the Toronto Stock Ex­change to $9.55 on the news but were up 4.6 per cent at $9.11 in early af­ter­noon trad­ing.

Aphria faced al­le­ga­tions in De­cem­ber by short-sell­ers ques­tion­ing the com­pany’s ac­qui­si­tions in Colom­bia, Ar­gentina and Ja­maica. Shares in the com­pany plunged in the wake of the re­port by Quintessen­tial Cap­i­tal Management and Hin­den­burg Re­search.

The two short-sell­ers al­leged that Aphria’s ac­qui­si­tion of as­sets to­talling $280 mil­lion were bought at “vastly in­flated prices” as part of a scheme or­ches­trated by a net­work of in­sid­ers.

Shares fell as far as $5 in Toronto from its price of $10.51 on Nov. 30, the last day be­fore the short-sell­ers’ re­port was re­leased.

Aphria has de­nied the re­port, but es­tab­lished a spe­cial com­mit­tee of in­de­pen­dent di­rec­tors to re­view the deals.

This in­de­pen­dent com­mit­tee is mak­ing “good progress,” and in­tends to fully ad­dress the short­sellers al­le­ga­tions, Neufeld said Fri­day. He would not quan­tify how much longer the process will take, but said it would take longer than “days.”

Aphria also re­ceived a hos­tile takeover of­fer late last year from Ohio-based Xan­thic Bio­pharma Inc., which does busi­ness as Green Growth Brands, that it re­jected as be­ing too low.

There is no ac­tive of­fer for the com­pany, Neufeld told an­a­lysts, and Aphria’s board of di­rec­tors has es­tab­lished an in­de­pen­dent com­mit­tee of di­rec­tors to con­sider pro­pos­als and for­mal of­fers re­ceived.

The pro­posal pre­sented by Green Growth Brands was de­ter­mined to “sig­nif­i­cantly un­der­value” the com­pany, he added.

“I con­tinue to have the great­est pride in what Aphria has achieved and its fu­ture has never looked brighter,” Neufeld told an­a­lysts.

The change in Aphria’s ex­ec­u­tive suite came as Aphria re­ported rev­enue to­talled $21.7 mil­lion in what was its sec­ond quar­ter in the midst of recre­ational cannabis be­com­ing le­gal in Canada, up from $8.5 mil­lion a year ago.

APHRIA

An Aphria worker in­spects cannabis oil.

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