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Green Growth Brands Ltd. moved to play down its business links with Aphria Inc. on Monday as it reaffirmed its intention to launch a $2.8-billion unsolicited bid for the beleaguered Canadian cannabis company.

Green Growth, based in Columbus, Ohio, revealed its plans last week to bid $11 a share in stock for Aphria, whose market value has tumbled amid questions about a recent international acquisition. It said the offer would be based on a price of $7 per Green Growth share, even though the stock has recently traded far below that.

A short-seller report issued after the announcement pointed out a number of connections between the two companies, most notably that of Vic Neufeld, Aphria’s chief executive officer. Mr. Neufeld is among Aphria directors and ex-directors who have had business dealings in the United States with the Schottenstein family, which is the principal investor of Xanthic Biopharma Inc. Xanthic operates in the cannabis market as Green Growth.

In a statement on Monday, Green Growth said it is not aware of any of its shares being held by Aphria, and asserted that no Aphria directors sit on its board. Mr. Neufeld has been an adviser to Calgary-based private-equity firm Green Acre Capital, which invested in Green Growth, among other cannabis companies. Green Acre’s advisory board also includes oil-patch financier and former star of CBC’s Dragons' Den, W. Brett Wilson.

Aphria director Shawn Dym has previously served on Green Growth’s board of directors, according to a regulatory filing. He is no longer a director, however, Green Growth said.

“As those who participate in the small, yet growing, cannabis industry know, there are many overlapping informal relationships between participants,” Green Growth said. “Any informal relationships that may exist are separate from Green Growth’s business decisions and Green Growth has no related party influence with Aphria, nor does Aphria have a related party influence over Green Growth.”

Mr. Neufeld stepped down as Aphria chairman last week, but remains CEO to the company, one of Canada’s largest recreational and medical-marijuana producers.

Aphria shares fell nearly 8 per cent to $7.85 on the Toronto Stock Exchange on Monday. That’s down from a recent high of $21.70 in September. Green Growth, which is listed on the Canadian Securities Exchange, sank 9 per cent to $4.65, a far cry from the $7-a-share valuation that Green Growth says drives its $11-a-share offer, which would be a 45-per-cent premium from Aphria’s closing price on Dec. 24.

Instead, investors are looking at the proposed swap ratio − 1.5714 Green Growth shares offered for each Aphria share. At Monday’s closing price, the share swap would value Aphria at just $7.31.

Green Growth maintained confidence that its stock would hit $7: “When investors consider our trailing revenue, recent licence wins in Nevada, and a buildout in the new market of Massachusetts, they agree that it is not a question of if Green Growth reaches $7 per share, but when,” CEO Peter Horvath said in the statement.

The company has also said it expects to raise $300-million in equity at $7 a share, a proposition that Aphria asserted Friday makes the proposal “quite risky" and “highly conditional.” A company spokesman said Monday that the company stands by its previous statement.

Green Growth’s plan to make the offer came weeks after short-sellers accused Aphria of overpaying for international acquisitions, and alleged that the acquired assets had been owned previously by firms with apparent ties to an adviser and prominent investor in Aphria. The company has called the allegations “false and defamatory," but its shares have tumbled since early December, when the short-sellers' arguments were made public.

In its statement, Green Growth said some Aphria shareholders had made early expressions of interest in its offer, saying they are frustrated with their investments in the company. The combination will benefit from Green Growth’s expertise in retail, which includes officials who worked in such organisations as Designer Shoe Warehouse Inc. and the parent company of Victoria’s Secret, it said.

Green Growth said it expects to launch its offer formally in the coming weeks.

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