Aphria chief executive, co-founder stepping aside from executive roles

Galtero Lara
Enero 13, 2019

In early December, Aphria shares plummeted after its business was attacked by a short-seller, and a company backed by a billionaire OH family launched a hostile takeover bid in late December, though that effort has a number of red flags.

The company disclosed that co-founder Cole Cacciavillani and CEO Vic Neufeld would step down from their positions in the coming months.

Neufeld noted that building and leading Aphria has taken a toll on his health, family and personal priorities.

Aphria shares were down 2.8% early Friday.

On Friday, Aphria also reported results for its second quarter.

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.

An unverified tweet from Quintessential Capital Management (QCM) posted shortly after Aphria announced Neufeld's departure said that it "welcome [s] the latest executive changes at Aphria which clearly vindicate our short thesis". Aphria's board appointed a special committee assisted by independent advisers in December to investigate the short sellers' allegations and intends to fully address the Latin American acquisitions shortly, Neufeld said during the conference call.

Quintessential did not immediately respond to Business Insider's request for comment on whether it had closed its short position.

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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".

Aphria is the target of a proposed hostile takeover bid by Green Growth Brands Inc., which has also raised questions about connections between the two companies.

Simon, Aphria's newly appointed chairman reiterated that and called Neufeld and Cacciavillani "consummate entrepreneurs".

Neufeld said: "When the Canadian medical cannabis market opened up five years ago, Cole was growing millions of potted flowers in Leamington, and he understood that cannabis was a natural product extension for the founding team's decades of experience as greenhouse growers in Leamington".

Aphria reported revenue of $21.7 million for the quarter ended November 30, below the average analyst estimate of $28.8 million.

Outgoing CEO Vic Neufeld explained that the margin decline reflected "lower effective selling prices in the adult-use market, as well as temporarily lower yields and higher production costs in the quarter as we moved aggressively to build out production facilities and implement new automation processes".

Aphria sold 3,408.9 kilograms of cannabis, up 92% from the fiscal first quarter. The average selling price fell to $6.54 per gram, from $7.12 per gram in the prior quarter.

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