Reuters — Canadian pot producer Aphria’s co-founder and CEO Vic Neufeld is stepping down, at a time the company is facing questions about its deals in Latin America and a recent slump in its shares.
The Leamington, Ont. company also said its marijuana sales nearly doubled in the second quarter driving overall revenue to $21.7 million, from $8.5 million a year earlier, sending its shares up six per cent.
The stock tumbled about 30 per cent on Dec. 3 following a report by short-seller Hindenburg Research, which alleged the company had diverted more than $700 million to undisclosed beneficiaries through some deals in Latin America.
Following the report, Aphria formed a special committee of independent directors to review its Latin American deals.
“I can confirm that this special committee is making good progress, assisted by independent advisors, and intends to fully address short-seller allegations,” Neufeld said on a post-earnings call with analysts.
The company did not give a date for Neufeld’s exit from his role. The company’s co-founder, Cole Cacciavillani, would also leave his post as vice-president of growing operations.
“Cole and I have informed the board, and they have agreed that we will begin the transition process immediately, and at the appropriate time, we will both step down from executive positions at Aphria,” Neufeld said.
Like rivals Canopy Growth and Tilray, Aphria has been investing heavily to expand its footprint in international markets including Europe and Latin America.
The company signed a deal with German pharmaceutical company CC Pharma in November and entered into agreements to grow and sell pot in Colombia, Argentina and Jamaica last month.
Canada legalized recreational marijuana in October, and the sector is expected to get a boost as many other countries move closer to legalization.
Aphria’s net income jumped eightfold to $54.8 million during the quarter.
— Reporting for Reuters by Laharee Chatterjee in Bangalore.