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Aphria Inc. confirmed Friday that two key executives will step away from their posts at the embattled cannabis grower “in the coming months.”

In a news release, Aphria said Vic Neufeld, chief executive, and Cole Cacciavillani, co-founder and vice-president of growing operations, will step down from their roles, confirming a report Thursday night by The Globe and Mail. Their departures mark a changing of the guard at one of Canada’s largest cannabis companies. Aphria said they will remain on the board.

Also: Aphria CEO to step down amid questions about cannabis firm’s deal-making, slumping stock

Along with co-founder John Cervini, the pair built Aphria over the past five years from an idea and a greenhouse in Leamington, Ont. In recent months, Aphria has been on the defensive both because its stock price has lagged its peers and its governance has been called into question after two recent deals for foreign assets. Last month, Aphria assembled a special committee of directors to review its deal-making.

Aphria was targeted by two short-sellers last month in a report that criticized the company’s nearly $300-million stock deal to acquire marijuana assets in Colombia, Argentina and Jamaica. The report provided photographs and documents that suggested the assets are not significant and are worth a fraction of that amount. Parts of that report have been disputed by analysts and media.

On an earnings call on Friday, Mr. Neufeld said the job has “taken a toll on health, family and personal priorities,” adding that “it was just time for us to move aside.” Newly appointed chair Irwin Simon said that the exits were “planned,” adding that Mr. Neufeld talked about his decision to leave Aphria in one of their first conversations a few weeks ago. “It has nothing to do with the work that the special committee is doing,” Mr. Simon added.

But some analysts say controversy around the company is more likely behind the CEO move.

“I, like most people, are speculating that [Mr. Neufeld’s departure] has to do with this short-sellers' report and all the pressure that’s been put on him,” said Jason Zandberg, an analyst at PI Financial Corp. "It seems pretty obvious, even though he denies that’s the reason he’s stepping down. I’m sure his stress level has gone up considerably.”

Mr. Zandberg was more surprised by news of Mr. Cacciavillani’s departure.

“It’s really been Cole’s baby from the beginning,” Mr. Zandberg said. He added that Mr. Cacciavillani has a home beside Aphria’s Leamington facility and that he hired Mr. Neufeld to be CEO in 2014. At the time, Mr. Neufeld had recently left Jamieson Laboratories Ltd., where he had been CEO for 21 years, and was close to retiring.

Shares of Aphria closed up 5.4 per cent to $9.18 Friday. Aphria’s stock had been trading below $5 in the days after the short-sellers’ report, tumbling from $10.51 before it was published on Dec. 3.

The company said Mr. Neufeld and Mr. Cacciavillani would remain in their positions until Aphria finds new leaders to replace them.

To replace Mr. Neufeld, the company is searching for a prominent executive with global know-how – and not necessarily someone already in the nascent cannabis industry, said a source familiar with the situation who was granted anonymity by The Globe. The person was not authorized to speak to the media on the matter. Last October, rival grower CannTrust Holdings Inc. hired former Tangerine Bank CEO Peter Aceto for its top job, replacing co-founder Eric Paul. Aphria will begin an internal and external search.

“I continue to have the greatest pride in what Aphria has achieved and its future has never looked brighter,” Mr. Neufeld said. “This has nothing to do with the short-sellers’ report, the review, the valuation of assets. It was time.”

After the departures were announced, Quintessential Capital Management – one of the firms that wrote last month’s short report – tweeted that the executive departures “vindicate our short thesis.”

Aphria also released second-quarter earnings on Friday. In the three months ended Nov. 30, Aphria reported net revenue of $22-million. It sold 3,409 kilograms of cannabis, of which 1,900 kg was sold into Canada’s recreational market. Its sales mix has also evolved, with the company selling a higher percentage of flower than higher-priced oils compared with its prior quarter. That contributed to a drop in its average selling price per gram, inclusive of excise taxes, to $6.54 from $7.12.

Aphria also booked $1.2-million in sales from the Argentine entity it acquired last year.

It posted net income of $55-million, owing mainly to gains made from selling shares of Hiku Brands Co. Ltd., which was acquired by Canopy Growth Corp. and Liberty Health Sciences Inc.

“It’s business as usual at Aphria,” Mr. Neufeld said. “Our journey, regardless of the external noises, is based on sound and solid strength built to last.”

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