Aphria Inc (TSX: APHA) (NYSE: APHA) reported this morning that it had finally received a license to set up retail operations in Jamaica. Operating under Marigold Projects Jamaica Ltd, the partially owned entity has received what is known as a Herb House license to open its first store in Kingston, Jamaica.
Located at the now infamous Unit #51 on 38a Trafalgar Road, the location will have an opening ceremony in August. The location, which was glorified by short seller Hindenburg Research in December 2018, was long rumoured to not exist as a result of ground work presented within the short report. In an ode to the report, Aphria elected to be snarky in today’s release by stating that “Yes, it is there.”
“The approval of Marigold’s first Herb House signals an exciting time for Aphria. We believe that there is tremendous opportunity in Jamaica from a domestic and international perspective and we look forward to bringing Sensi products to the market.”
Irwin Simon, CEO of Aphria Inc.
The short seller report compiled by Hindenburg focused on Aphria’s international operations, with an emphasis on what had been purchased in Jamaica. The report had conducted ground work within the country in an attempt to find Aphria’s LATAM assets that it had purchased for close to $300 million. Originally pegged at $193 million, the purchase price increased significantly as a result of Aphria’s equity rising.
Despite the snark displayed in today’s news release, Aphria has essentially admitted that they overpaid for the international assets. Last quarter the firm wrote down the purchase by $50 million after the Ontario Securities Commission requested that the firm conduct an impairment test on the assets. Aphria executives also commented in the associated conference call that the purchase price still remains $30 million above the intended price.
Aphria currently holds 49% of Marigold, which has a Tier 3 cultivation license within Jamaica. Fully operational, the firm expects to have over 2,700 KG of cannabis available for sale on opening day.
Aphria is currently trading at $7.03.
Information for this analysis was found via Sedar and Aphria Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
