Friends, for those of you who’ve been receiving my spammy musings for a while, and for the subset of you who actually read my spammy musings, you may recall that I made a comment a while back about how the Cannabis industry achieved a somewhat dubious milestone when an activist investor targeted a public Cannabis company. Well, the markets hit another fun milestone today: Ontario-based Aphria is the target of a short seller attack today, which caused Aphria’s stock to plunge (trading down 20% as I write this).
(Short selling, for the uninitiated, is simply a way for an investor to bet that a stock price will go down. The short seller is supposed to borrow the shares to make the short, and pays a fee to the lender of the shares. Generally, the borrow cost has been high for Cannabis stocks, due to, among other things, the demand for these stocks.)
The fund put out a report attacking Aphria’s Latin American transactions. Aphria responded accordingly that the allegations of the short seller are “false and defamatory”. In my opinion, this is good news. Not for Aprhia, perhaps, but for the Cannabis public market, which is looking more and more like the rest of the stock market.
For those of you in California, today’s the day when the BCC is supposed to issue its revised proposed regs. Something to tide us all over while we await passage of the 2018 Farm Bill.
By: Marc Hauser