Aphria Inc. (NYSE: APHA) announced the results of its revenue report for the third quarter in a conference call on April 15th. Issues tied to the quarterly loss of the company’s revenue were attributed to a C$50 million non-cash impairment charge on assets that it acquired in Latin America, which are referred to as Latam Assets, last year in September. The company also faced added pressures and loss in sales and businesses that would have occurred if a short seller hadn’t released a comprehensive report that doubted the value of the Latam Assets and considered the company to have overpaid for the assets. Aphria acquired the assets in Latin America for C$280 million. Research done by independent investigators would clear Aphria of overspending for the Latam Assets, but would include that some board members may have had a conflict of interest that were not previously disclosed.
Gabriel Greco, a member of Quintessential Capital Management, stated: “Aphria’s earnings show a quarterly loss exceeding $100 million, negative margins, decreased production volume, regulatory scrutiny and a large write off for its Latin American acquisition, which we think will be the first of many.”
Numerous corporations that are part of the cannabis sector, like Organigram Holdings Inc. (OTC: OGRMF), fell after the earnings loss by Aphria was reported on April 15th. Organigram Holdings shares fell an estimated 9.66% along with other publicly traded cannabis entities that each declined their own respective amounts.
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