Investigation Confirms Existence of Aphria's Jamaican Assets

After a wild year for the cannabis sector, it’s appropriate 2019 kicks off with a focus on Aphria.

The Leamington based pot producer was attacked by short sellers and is now the target of a hostile takeover bid by Ohio company Green Growth Brands.

Bloomberg News went in search of some of the Aphria investments in question and cannabis reporter Kristine Owram says they found a thriving grow operation in rural Jamaica.

She says there was a sizable inventory on hand as well.

"They questioned the existence of a farm that Aphria had said it had bought in Jamaica to grow marijuana and our reporter went down to Jamaica and was able to find that farm pretty easily, found 300 marijuana plants growing there, about 2,500-kilograms of dried marijuana in inventory that had already been grown and harvested."

Owram says the assets are far from worthless, as was the claim in the report from short sellers.

"The short sellers said the deal was essentially worthless, but there is a farm there that is growing cannabis, they have licenses to grow. They do not yet have the ability to export from that country, but Jamaica is considered quite a strong market internally, both for people who live there and for the about 4-million tourists who visit every year."

She says investigators also located an Aphria owned cannabis retail store which short sellers claimed did not exist.

"We were able to confirm the existence of that farm that the short sellers questioned. The other asset was a retail store in Jamaica that the short sellers also said they couldn't find. Our reporter was able to find it. It was not yet operational, but it was set up with a sign and ready to open in the near future."

Aphria has reported purchasing assets in Argentina and Columbia as well.

The company is scheduled to release an earnings report January 11 which is expected to outline more details about the short seller allegations and the looming hostile takeover bid.

— with files from AM800's Patty Handysides