Long/Short equity fund Quintessential Capital issued a scathing report this morning, focused on Aphria’s international business. The three early takeaways for us are:
1) CEO Vic Neufield will likely be forced to resign or have his role at Aphria reduced.
2) International operations are essentially worth zero. This was our prior position.
3) Our prior concerns earlier this year about delays with Health Canada approvals appear to have been legitimate. Recall we raised the issue of Phase 3 expansion approvals taking longer than expected (March 12, 2018 rather than January 2018). Raising this concern with Aphria, the issue was quickly dismissed by the company as a non-issue. This report, however, appears to make a case that quality concerns were an issue in past approvals, including the Phase 3 expansion.
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