Aphria's Jamaica Weed Farm is "Thriving," Despite Short Sellers' Doubts

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Alert Sent 2019-01-07 09:32:34 AM ET

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Market Chatter: Aphria's Jamaica Weed Farm is "Thriving," Despite Short Sellers' Doubts

2019-01-07 09:26:44 AM ET (MT Newswires)



09:26 AM EST, 01/07/2019 (MT Newswires) -- As Canadian pot producer Aphria Inc. (APHA.TO, APHA) tells it, a farm outside Kingston, Jamaica, where 300 marijuana plants "sit in manicured rows," is part of its growing portfolio of international assets, Bloomberg News reported in a feature published over the weekend.


But, Bloomberg noted, for two U.S. short sellers, the farm is one of the catalysts for an offensive that sent Aphria shares plunging in December. It noted Hindenburg Research and Quintessential Capital Management questioned the farm's existence and said Aphria overpaid for "largely worthless" assets in a three-country deal.


According to the report, the truth -- as, it claimed, was uncovered by a tour of the Jamaican countryside and the back streets of Buenos Aires by Bloomberg -- is "more nuanced." In the nascent world of global pot investing, Bloomberg said, assets can be "hard to document and even harder to value." Though, it added, "first mover advantage may hold big rewards."


Bloomberg noted Aphria acquired LATAM Holdings Inc. in a September deal that the Leamington, Ontario-based company valued at $193 million when it was announced and SOL Global Investments Corp., the seller, said was worth $298 million when it closed. The assets include Marigold Projects, a licensed Jamaican grower, a pharmaceutical distribution warehouse in Argentina and licensed farmland in Colombia.


In a separate report, Bloomberg noted Aphria reports results for the fiscal second quarter on Jan. 11. It said there will undoubtedly be plenty of questions on the conference call about the allegations from short sellers that it overpaid for "worthless" assets in Latin America. Aphria called the claims by Quintessential Capital Management and Hindenburg Research "malicious and self-serving."