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What Citron Research Has to Say about Aphria

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Nov. 20 2020, Updated 1:52 p.m. ET

Aphria’s decline

Last week was a brutal week for Aphria (APHA) (APHQF). Aphria’s troubles began last Monday when Gabriel Grego of Quintessential Capital Management called the stock “worthless” and explained in detail why he believes the company destroyed shareholder value. Aphria fought back and appointed a special committee that consists of independent directors who will be tasked with reviewing the allegations.

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Citron Research has positive views

In contrast to Quintessential Capital Management, Citron Research has positive views on the company. According to Citron, Aphria, which closed at 6.93 Canadian dollars, could reach a price of about 10 Canadian dollars, which would translate into an upside of nearly 44% from its close on December 8. According to Citron, the company’s footprint in Canada is large. Earlier, Citron Research released several reports on other cannabis stocks. It believes that Namaste is a “complete fraud.”

Such news certainly makes investors (HMMJ) wary and dampens the investment sentiment towards cannabis stocks. However, the cannabis industry remains attractive to adjacent industries, and we continue to see heightened investment activity. Last week, Altria, a tobacco company, announced the acquisition of a 45% stake in Cronos Group (CRON). Earlier, Constellation Brands, an alcoholic beverage company, acquired a stake in Canopy Growth (WEED).

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