APHRIA EXECS TO STEP DOWN
Founders of pot firm make way for new leadership
Changes are afoot in the corporate leadership of Leamington-based cannabis company Aphria Inc. amid turmoil over the attack of a short seller and a wavering stock value.
Aphria announced Friday that its CEO, Vic Neufeld, and company co-founder, Cole Cacciavillani, will both “transition out of their executive roles in the coming months.” Neufeld and Cacciavillani will remain on the company’s board of directors, but the company said it will shift to “a globally-minded executive leadership team for the long-term benefit of the company ’s patients, shareholders, customers and employees.”
In a news release, Neufeld recalled the roots of the company in a Leamington greenhouse operation where Cacciavillani was growing “millions of potted flowers” five years ago, when the Canadian medical marijuana market opened.
“Now, with legalization and globalization, including a huge market opportunity with positive developments in the U.S., Aphria’s next generation of leadership may take the reins,” Neufeld said. Neufeld noted that building and leading Aphria has taken a toll on his health, family and personal priorities. Cacciavillani mentioned that both Neufeld and himself are in their 60s.
According to Neufeld, a succession plan is in place, and he and Cacciavillani will step down “at the appropriate time.”
An exact date has not been given for the appointment of a new CEO. The company’s board has asked Neufeld and Cacciavillani to be available as “special advisers” to the chair and president. Neufeld and Aphria did not reply to requests for further comment on Friday.
The announcement came with a report on the company’s secondquarter results. Founded in 2014, Aphria Inc. has risen to become one of the highest-valued cannabis companies in the world, with a current market capitalization of more than US$2 billion. The company’s leadership was formed when Neufeld, former CEO of vitamin company Jamieson Laboratories, joined with Aphria founders Cacciavillani and John Cervini.
But after a rocket-like ascent, Aphria became mired in controversy at the start of December, when a damning report by a short seller made the company’s stock plummet.
Calling the company a “black hole,” the short seller, Quintessential Capital, alleged that Aphria has wasted hundreds of millions of dollars on worthless foreign acquisitions as part of a financial shell game. Aphria dismissed the report as “false and defamatory ” and promised a comprehensive, line-by-line rebuttal, which, as of Jan. 11, had still not come.
The company ’s story was further complicated in late December with a hostile takeover bid by an Ohiobased marijuana company, Green Growth Brands. Controversy continued when it emerged that the second-largest shareholder of Green Growth Brands — GA Opportunities Corp. — is backed by Aphria and advised by Neufeld.
The forensic analysis firm Hindenburg Research, as part of the short seller attack on Aphria, suggested that the company is “part of a scheme orchestrated by a network of insiders to divert funds away from shareholders into their own pockets.”
But earlier this month, an investigation by financial news outlet Bloomberg put the short seller’s claims in question after journalists visited Aphria assets and properties in Jamaica that Quintessential Capital had suggested did not exist.