Aphria Inc. (TSX:APHA)(NYSE:APHA) stock fell 2.35% on January 10. Investors can expect volatility on January 11 after big news broke in the late hours yesterday.
Aphria CEO Vic Neufeld will step down, and the company will begin the hunt for new leadership immediately. The company was hit with a devastating short report late last year as Hindenburg Research alleged that its international acquisitions were highly questionable. Aphria came out with a strong rebuke, but the story did not end there.
Green Growth Brands made a surprise acquisition bid for Aphria in late December valuing the company at $2.8 billion. The company was forced to downplay its business links with Aphria in the following days, which cast a shadow over the company once again. Aphria was hit with bad press in the past over its acquisition of Nuuvera as Neufeld and other executives held a substantial interest in the smaller firm and made a tidy profit.
Neufeld had previously had dealings with the Schottenstein family, which is the principal investor in the company that operates in the cannabis market as Green Growth. Aphria director Shawn Dym had also served on Green Growth’s board of directors.
The departure of Neufeld may shake the sector in the short term. Aphria is one of the largest licensed producers in Canada and is on track to be a top supplier in 2019. It may hope that Neufeld’s departure will clean the slate for the upcoming year and quiet concerns over its business practices over the past year.
