Aphria sells stake in Copperstate Farms to Liberty Health Sciences for $20M

TORONTO — Aphria Inc. has inked a $20-million deal to sell its stake in Arizona cannabis company Copperstate Farms to an affiliated U.S. firm as the Canadian licensed marijuana producer looks to reduce its direct involvement in medical pot south of the border.

As part of the deal announced Friday, Aphria has agreed to sell its minority interest in Copperstate to Liberty Health Sciences Inc., an investor and operator in the U.S. medical cannabis market. Aphria, based in Leamington, Ont., holds a minority stake in Liberty.

“The sale of Copperstate is an important step in our continued efforts to work collaborately with the TSX and Canadian securities regulatory authorities regarding the divestiture of our direct investment in a U.S. cannabis business,” Aphria chief executive Vic Neufeld said in a statement.

The sale is subject to customary closing conditions and expected to close in the second quarter.

This comes after Canada’s biggest stock exchange operator warned late last year that U.S. federal law, which classifies marijuana as an illegal schedule 1 drug, takes precedence over state law. The TMX Group, which operates the Toronto Stock Exchange and the TSX Venture, said companies that operate in states where pot is legal are not in compliance with TSX listing requirements and could face a delisting review.

And in January, U.S. Attorney General Jeff Sessions rescinded an Obama-era guidance known as the Cole Memorandum that suggested that the federal government would not intervene in states where the marijuana is legal, allowing legalization to flourish in states including California and Florida. Sessions said in the January memo that he would leave it to federal prosecutors in states where cannabis is legal to decide how aggressively to enforce federal law.

The umbrella organization for Canada’s provincial and territorial securities regulators has also said it is considering whether its disclosure-based approach for issuers with U.S. marijuana-related activities “remains appropriate” in light of the decision by Sessions.

In December, Neufeld said the company continued to be in discussions with the TMX Group and that Aphria was moving to reduce its direct involvement in medical cannabis in the U.S. ”as best as possible.”

Aphria’s first foray into the U.S. market was in 2016 with an investment in Copperstate, a medical marijuana producer. Copperstate owns approximately 158,000 square metres of greenhouses in Snowflake, Ariz. — 20 per cent of which produces medical cannabis.

In April 2017, Aphria announced the launch of its U.S. expansion strategy through a strategic investment in an entity that was renamed Liberty Health Sciences. As part of the transaction, Aphria also licenses its medical brand of cannabis to Liberty for a royalty.

Aphria is also planning to sell 25 per cent of its 38 per cent stake in Liberty, and has put it up for sale, according to a report. A spokesperson for the licensed producer said it had no further comment other than that Aphria is “exploring and considering strategic alternatives with respect to its US cannabis related interests, including the possible divestiture of its investments to strategic, long-term and committed investors in the cannabis industry.”

Just Posted

VIDEO: Daisy Duke joins Red Deerians at Collector Car Auction and Speed Show

The original Daisy Duke took a break from Hazzard County to meet… Continue reading

Police informer talks about his role in Castor undercover sting

Jason Klaus and Joshua Frank were convicted of triple murders last month

City of Red Deer invites residents to Let’s Talk

Interactive public forum to be held April 7

Lessons in altruism learned by Red Deer students

St. Francis of Assisi School launches community foundation project

Sylvan Lake council approves fire pits and mobile stage

Large fire pits for group gatherings will be located on pier next winter

WATCH: Central Alberta’s sexiest show

The sexiest show in Central Alberta took over Westerner Park this weekend.… Continue reading

Driver crashes into Red Deer business while fleeing police

A car smashed through a Red Deer business’ front window while fleeing… Continue reading

UPDATED: ‘New wave’ of anti-pipeline protests return to Trans Mountain facility

About 100 demonstrators with Protect the Inlet marched to the Burnaby terminal Saturday

Groups expressing concern about jobs funding rules await final decision

OTTAWA — It was Valentine’s Day when an Alberta church was told… Continue reading

New Brunswick boxer David Whittom dies months after suffering brain hemorrhage

New Brunswick boxer David Whittom, who had been in an induced coma… Continue reading

Superstore chain Fred Meyer to stop selling guns, ammunition

PORTLAND, Ore. — Superstore company Fred Meyer will stop selling guns and… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month