There’s no date set for his exit but Aphria (Aphria Stock Quote, Chart TSX, NYSE:APHA) CEO Vic Neufeld has announced that he and co-founder Cole Cacciavillan will be stepping down from their executive roles, with Neufeld citing health and personal reasons.
“It was just time for us to move aside,” Neufeld said on Aphria’s earnings call Friday. “This has nothing to do with the short sellers’ report, the review, the valuation of assets.”
Shares of APHA were up Friday as the stock attempted to scratch back some of the ground it lost over the past few months, in no small part due to allegations which surfaced in early December alleging that the company had wasted hundreds of millions of dollars on worthless foreign acquisitions, while adding that Aphria insiders had made big profits in the process through stakes in those assets acquired before Aphria had purchased them.
Aprhia called the allegations “misrepresentations and distortions,” saying that it had put together an investigative committee to draft a full rebuttal. More than a month later, investors are still waiting for that response. Meanwhile, Aphria has been hit with class-action lawsuit on behalf of its shareholders.
The Leamington, Ontario-based cannabis company released its second quarter fiscal 2019 (ended November 30, 2018) financials on Friday, the first to include sales since the legalization of recreational cannabis in Canada. The company generated revenue of $21.7 million for the quarter, a 63 per cent uptick from the previous quarter but lower than the consensus estimate of $37.9 million. Aphria posted a net income of $54.8 million or $0.22 per share, part of which stems from its long-term investment portfolio.
“Now with legalization and globalization, including a huge market opportunity with positive developments in the US, Aphria’s next generation of leadership may take the reins,” stated Neufeld in the quarterly report. “Building and leading a company like Aphria, which exploded from an idea in late 2013 to our many successes to-date, has been an incredible journey, despite the toll it has taken on health, family and personal priorities.”
Commenting on the earnings call, BNN Bloomberg’s David George-Cosh stated, “You could get the sense that Mr. Neufeld was potentially relieved. He took a big sigh before beginning his remarks, so I think a lot of this has weighed on him. It was a mixed quarter from a financial point of view. There were a lot of higher costs and lower yields from an operational point of view.”
In recent weeks, Aphria has also been dealing with a hostile takeover offer by US company Green Growth Brands, a move which raised further concerns about potential connections between the two companies, while at the end of December, Aphria appointed a new chair of its Board of Directors, aiming at improving governance at the company.