Did Aphria’s Questionable Acquisitions Get Validation?



The LATAM business

In the previous part of this series, we saw that Aphria’s (APHA) Latin American acquisitions were recently challenged by some short sellers. Taking a cue from those reports, Bloomberg went over to the LATAM market to confirm the short sellers’ claim, and here is what it found.

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The investigation results

In this article, we’ll discuss the key takeaways from Bloomberg’s report from January 5. In its report, Bloomberg stated that it found a heavily guarded Jamaican farm to be growing nearly 4,100 plants when it was acquired by Aphria in September. Bloomberg verified this claim after seeing a copy of an inventory report. Bloomberg also stated that the Jamaican spokesperson of Aphria said he “has never been contacted by Quintessential.” Bloomberg reached out to Quintessential, which said this firm was of “little importance” in the valuation of Aphria’s assets.

Bloomberg also verified the retail shop of the Sensi Medical Cannabis House in Kingston, which was claimed to be non-existent by Quintessential. However, in its report, Bloomberg “found the store well marked on the second floor, above a pizza-by-the-slice and Jamaican beef-patty joint.” Quintessential responded to Bloomberg by stating that it was unable to locate the address because “Aphria had published the wrong address for Sensi.”

The Bloomberg report cited similar deals and LATAM acquisition prices from Canopy Growth (WEED) (CGC) and Aurora Cannabis (ACB). Further, it cited Scotiabank analysts’ opinion on Aphria’a LATAM business, who called the acquisition in the region “relatively inexpensive.”

Next, we’ll look at Aphria’s backers so far.


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