Embattled Canadian marijuana producer Aphria Inc. saw its U.S.-listed shares rebound Thursday, after the company issued a rebuttal to a series of accusations leveled by a short seller even as new allegations were posted.
The short seller, Hindenburg Research issued another report Thursday, three days after its first batch of research that said Aphria was a “shell game with a cannabis business on the side” and called in to question the value of a number of its acquisitions. Aphria issued a lengthy statement Tuesday that defended the operations included in the Hindenburg report and Thursday morning said it has appointed a special committee to review one of the acquisitions.
By the start of trading Thursday, Aphria
stock had lost roughly half its value — U.S. exchanges were closed Wednesday, but the Toronto Stock Exchange, or TSX, where Aphria is also listed, remained open — but shares on the New York Stock Exchange closed up 23% Thursday.
Hindenburg’s Thursday update focused on the Aphria-backed Liberty Health Science, which trades on the Canadian Securities Exchange under the ticker LHS. Hindenburg said that its research into Liberty uncovered “multiple irregularities that raise more questions around believed undisclosed insider self-dealing. Liberty shares closed up 15% to 94 cents Thursday.
MarketWatch’s guide to pot stocks: Aphria is positioning itself as a low-cost pot producer
Many of the sector’s largest companies slid in Thursday trading. Tilray Inc.
fell 1.3%, GW Pharmaceuticals PLC
dropped 3.4%, Canopy Growth Corp.
fell 3.5% and Aurora Cannabis Inc.
dropped 2.2%. Cronos Group Inc.
which said earlier this week it was in talks with Marlboro maker Altria Group Inc.
for an investment, slid 2.7%.
Also Thursday, Canopy said it had acquired vaporizer maker Storz & Bickel GmbH & Co. KG for €145 million ($165 million) in cash. The German company has 17 filed patents and the founders of Storz are expected to remain part of the business. Canopy has at least a $4 billion war chest from the investment Constellation Brands Inc.
made earlier this year. Acquisitions are one of the things Canopy Chief Executive Bruce Linton told MarketWatch in October he plans to accomplish with that cash.
The ETFMG Alternative Harvest ETF
has lost 15% this year, as the S&P 500 index
gained 0.7%. Aphria shares have dropped 62% this year.