Sunny Days Ahead...... (No pun intended, Sunny!!!)It looks like Aphria and Liberty are getting close to concluding a deal whereby Aphria will transfer their interest in Copperstate to LHS. This was always a possibility. The parties have all but agreed on price and require final approval from Copperstate.
No mention if LHS will pay cash or issue shares to Aphria for Copperstate acquisition. One way or another Aphria gets paid.
The divesture of shares by Aphria in LHS may be a necessity to keep Aphria on side with the TSX.
Don't forget that Aphria still owns 85 million shares of LHS that are locked up in excahnge mandated escrow. These shares get released from escrow in 5 equal installments over the next 30 months.
Vic and John will be remaining on the Board of Liberty.
Today's news is nothing other than what we've discussed on this board as a possibility.
Today's news is great news for Aphria moving forward. The relationship between Aphria and Liberty is still strong. Liberty will still have access to Aphria's low cost growing methods. AND Aphria will still have a branding presence in parts of the US medical cannabis market. Vic and John will remain on Liberty's Board.
I'm sure the moves announced in today's Globe article have been agreed to by the TSX otherwise why would Aphria be making them.
Based on fundementals Aphria in my opinion is still a storong buy. Investors waiting on the sidelines now have a chance to buy in or current investors can add to their position.
Lets not kid ourselves, Aphria shares were valued at $15 when they purchased Broken Coast in December.
Ever since the TSX permitted Aphria to invest in the USA, Aphria's true value has been discounted compared to ACB and CGC.
Today's news makes it clear that Aphria has agreed to a compromise position with the TSX that will allow them to maintain a presence in the USA while removing the uncertainty of being delisted. They truly have the most upside of the big three in terms of market cap.
The correction that has been happening the last couple of weeks is a sector wide correction.
Sunny days ahead....
M