Aphria walks away from Liberty Health
Aphria Inc. is severing ties with its U.S. spin-off, Liberty Health Sciences Inc., as the company’s independent directors continue to overhaul of the firm’s leadership and relationships in the wake of short-seller reports that tanked the company’s stock late last year.
Last spring, Aphria began reducing its stake in Liberty to stay onside Toronto Stock Exchange listing rules. In September, Aphria exchanged its remaining stake in Liberty for a promissory note worth $60-million (bearing 12 per cent interest), while retaining the option to buy back its stake should U.S. laws change. The company announced on Tuesday evening that its independent board members had voted unanimously in favour of “the early termination and liquidation of a promissory note, option and other agreements.” The sale generated $47.4-million in cash for the company, but it effectively ends Aphria’s exposure to the U.S.
Liberty was put together by Aphria insiders in 2017 as the company’s main U.S. play. In December, Liberty came under attack from short sellers alleging insider dealing. Liberty has called the allegations “materially inaccurate.”
Aphria’s break with Liberty comes less than a week after Aphria’s independent directors submitted a report to the board examining allegations that Aphria overpaid for assets in Latin America, to the enrichment of deal makers close to company insiders. The independent directors concluded the price paid for the LATAM assets was “within an acceptable range as compared to similar acquisitions by competitors, be it near the top of the range of observable valuation metrics,” according to a press release from Aphria. However, the directors also concluded “certain of the non‐independent directors of the Company had conflicting interests in the Acquisition that were not fully disclosed to the Board.”
Last month, both Aphria CEO Vic Neufeld and co-founder Cole Cacciavillani announced they were retiring from the company and stepping down from the board. Co-founder John Cervini will also step down from the board, the company announced on Friday, although he will stay on “in a non‐executive operational capacity.”
– Mark Rendell
Emerald Health’s Montreal-area facility to create 140 jobs
Emerald Health Therapeutics Inc. says its expanded cannabis production facility is poised to create 140 jobs in the off-island Montreal suburb of Saint-Eustache. The B.C.-based company says it is nearing completion of a $100-million upgrade to an indoor grow site. The production facility, soon to be built out to 27,800 square metres, is set to include 23 growing rooms sprouting about 200 strains of cannabis.
Chief executive Avtar Dhillon says a “substantial” chunk of the output will go toward a supply-parched Quebec market, but that some cannabis would also feed into Emerald’s production of bud, oils, edibles and vaping products. The 140 jobs, about 60 of which have been filled, include planting, harvesting and packaging roles, as well as lab technicians, research and development scientists, and executive positions.
The production facility, acquired in Emerald’s purchase of Quebec producer Agro-Biotech in May 2018, is now run by newly launched Emerald subsidiary Verdelite Sciences Inc., licensed by Health Canada.
– Canadian Press
Aurora makes board changes; names new lead independent director
Aurora Cannabis Inc. moved to strengthen its board of directors as it announced chairman Michael Singer will become executive chairman. The company says Ronald Funk will become the lead independent director, while Shan Atkins will also join the board as a new independent director and head of the audit committee. Ms. Atkins is currently on the boards of Darden, SpartanNash, SunOpta and LSC Communications. Previously, she served on the boards of Shoppers Drug Mart, Tim Hortons and the Pep Boys. Diane Jang, CEO of Hempco Food and Fiber and an Aurora director since November, 2017, has resigned from the board.
– Canadian Press
Canada House Wellness Group restructures, launches retail arm
Canada House Wellness Group Inc. said Wednesday it is re-aligning its businesses under three verticals: Canada House Clinics (CHC), Canada House Grow (CHG), and its new retail arm - Canada House Retail (CHR). The Canada House Grow (CHG) division, previously Abba Medix, is a wholly owned and fully licensed LP growing medical cannabis for medical patients and craft cannabis for the new recreational cannabis division. The CHG division will also oversee the production of oils and extracts. Canada House Retail (CHR) will market CHG’s craft cannabis to the Canadian adult-use market. Its first dispensary will be located in Edmonton. CHR will oversee the sales and marketing efforts of the seeds, genetics, and dried flower.
This and that ...
- Zenabis Global Inc. said yesterday it will formally enter the Alberta recreational cannabis market, supplying retailers throughout the province through a supply agreement it has entered into with the Alberta Gaming, Liquor and Cannabis Commission (AGLC). Zenabis will supply seven strains of its adult-use Namastetm products beginning in the first quarter of 2019. Zenabis says Alberta represents its eighth supply deal with a province or territory.
- CannTrust Holdings Inc. said yesterday its common shares will begin trading on the New York Stock Exchange on Monday, Feb. 21, under the ticker symbol “CTST”. The company’s common shares will continue to be listed on the Toronto Stock Exchange under the ticker symbol “TRST.”
- Supreme Cannabis says its 7ACRES subsidiary has entered into a supply agreement with the New Brunswick Liquor Corporation to supply recreational cannabis to its retail stores and has been registered as a supplier in the province of Saskatchewan. The company currently has supply arrangements with B.C., Alberta, Manitoba, Ontario, Nova Scotia and PEI.