Aphria Inc.’s chief executive will step down from the top job after the “toll on health, family and personal priorities,” but Vic Neufeld says the decision is unrelated to recent short-seller allegations that have hit the cannabis producer’s stock.
The Leamington, Ont.-company also announced Friday that co-founder Cole Cacciavillani will also leave his current role in the coming months, but both he and Neufeld will remain on the board.
The past five years has been an “incredible journey” but it is time for a “globally-minded” executive team to lead Aphria into the next chapter, said Neufeld.
“It was just time for us to move aside,” he told analysts on a call discussing Aphria’s latest quarterly earnings. “This has nothing to do with the short-sellers’ report … It was time.”
Neufeld said he and Cacciavillani will begin the transition process immediately and step down from their executive positions “at the appropriate time.”
Shares of Aphria Inc. rose by as much as 9.6 per cent on the Toronto Stock Exchange to $9.55 in morning trading on Friday on the news.
Aphria faced allegations in December by short-sellers questioning the company’s acquisitions in Colombia, Argentina and Jamaica. Shares in the company plunged in the wake of the report by Quintessential Capital Management and Hindenburg Research.
The company has denied the report, but established a special committee of independent directors to review the deals.
This independent committee is making “good progress,” Neufeld said Friday.
Aphria also received a hostile takeover offer late last year from Ohio-based Xanthic Biopharma Inc., which does business as Green Growth Brands, that it rejected as being too low.
There is no active offer for the company, Neufeld told analysts, and Aphria’s board of directors has established an independent committee of directors to consider proposals and formal offers received.
The change in Aphria’s executive suite came as Aphria reported revenue totalled $21.7 million in what was its second quarter as Canada’s legal recreational market began. The total was up from $8.5 million a year ago.
Analysts on average had expected revenue of $37.9 million, according those surveyed by Thomson Reuters Eikon.
Aphria earned a profit of $54.8 million or 22 cents per share for its quarter ended Nov. 30 compared with a profit of $6.5 million or five cents per share for the same period last year.
The company attributed the increase in profit to gains on its long-term investment portfolio, primarily divestitures of positions in Hiku Brands and Liberty Health Sciences.
Companies in this story: (TSX:APHA)
Armina Ligaya, The Canadian Press