Beleaguered cannabis producer Aphria Inc. says its chief executive officer will step down following short-seller allegations that have hit the company’s stock.
CEO Vic Neufeld and co-founder Cole Cacciavillani “are both nearing the end of their five-year journey with the company and will transition out of their executive roles over the coming months but remain on the board,” the company said in a statement Friday.
This comes after Aphria Inc. APHA, -4.30% APHA, +0.13% shares exploded higher in late trading 2 weeks ago, after a takeover bid was publicly announced. Green Growth Brands Ltd.GGBXF, -6.41% a U.S.-based pot company also known as Xanthic Biopharma Inc. that trades on the Canadian Stock Exchange, publicly announced that it would offer 1.5714 shares of its own stock for each Aphria share, which it says values Aphria at C$11 a share. Aphria’s Canada-listed shares closed at C$7.57 Thursday, and were halted after the close; U.S.-listed shares closed at $5.57, and jumped more than 18% in after-hours action. Green Growth said that it offered Aphria a friendly bid that included a $50 million investment before going public with its bid. “Green Growth believes it already has support for the Offer from Aphria shareholders holding approximately 10% of the outstanding Aphria shares,” according to Thursday’s announcement. “Green Growth has additionally acquired a meaningful toehold position in Aphria.” In a later announcement, Aphria said that Irwin D. Simon had been appointed to chair its board of directors, replacing Chief Executive Vic Neufeld, who will remain in that position.
Now, reports coming out that the CEO landed him self in hot water over the public criticism of a take over bid that meant to benefit shareholders of APHA common stock. Some analysts are suggesting that this move may be a way for the deal to be expedited with the recently public take-over offer.
It is important to note that the news release did not mention Green Growth’s takeover bid.
Analysts are urging caution when jumping in on some APHA action, as this type of offer tends to draw in major attention. However, this attention is typically short lived, irregardless of the end result of the take over bid. Currently, GGB is offering shareholders 1.5714 of their shares for each of their APHA shares. Simply put, this means that the actual amount of money shareholders are going to receive depends on what GGB’s share price does. Quickly looking, and based on today’s close, shareholders will be getting $7.83.
This is not a $11 take over bid and there is no guarantee that shareholders will be able to exit their position anywhere near $11, as the new release lays out.
“The Offer will provide Aphria shareholders with 1.5714 common shares of Green Growth (the “Green Growth Shares”) for each Aphria Share and represents premiums of 45.5% over Aphria’s closing price on the Toronto Stock Exchange (the “TSX”) on December 24, 2018 and 46.0% over Aphria’s volume weighted average price on the TSX for the last 10 trading days ended December 24, 2018. The Offer values Aphria at approximately C$2.8 billion (US$2.1 billion) based on a valuation of C$7.00 per share for Green Growth Shares.”
Aphria is expected to attend one of the largest trade shows in the USA, the Efficient Collaborative Retail Marketing (“ECRM®”) Hemp/CBD Health & Beauty Care EPPS trade show in Chicago January 28th 2019 — January 30th 2019 at the Sheraton Grand Chicago to present its catalog at scheduled meetings with some of the largest mass market retailers in the USA. Alongside APHA will be iconic brand, Cheech & Chong who have recently been linked to a new movie after they were bought out by emerging Cannabis company Profile Solutions Inc (PSIQ). Now, when their large scale growing operation goes operational (See Here), they will only have to put the CBD products under the banner of Cheech and Chong, and thus it would be trade marked.
“We are very excited to showcase our proprietary line of Hemp Based CBD products to this very prominent group of Mass Market Retailers.”
Dan Oran, CEO of PSIQ stated,
Mr. Oran concludes,
“Due to the passing of the 2018 Farm Bill, Hemp Based CBD has become legal nationwide creating tremendous opportunity for PSIQ.”