Aphria Reduces Canabo Stake at Steep Discount to Purchase Price

Editor’s note: On March 16th, Aphria filed on SEDI that it had bought back the 500K shares at $0.74 on March 13th

Just thirteen weeks after agreeing to pay $1.40 for 6mm shares of Canabo Medical Corp (TSXV: CMM) (OTC: CAMDF), Aphria (TSXV: APH) (OTC: APHQF) has sold 500K shares at $0.70, realizing a loss of $350K on 8.33% of its position. The shares appear to have been sold in advance of a four-month hold requirement, given the close on 12/23/16.

Aphria sells Canabo 030917

Source: Sedi.Ca

Canabo operates 12 Cannabinoid Medical Clinics in Canada, working with patients on only a physician-referral basis in order to evaluate for the suitability, prescribing and monitoring  of cannabinoid treatments for a variety of illnesses. At the time of investment, Aphria described it as strategic.

When we detailed the original investment, we pointed to the extraordinary premium paid by Aphria, as the $1.40 purchase price was 36% higher than the close of $1.03 the day prior the announcement of the deal.  Additionally, Canabo had sold 7mm shares at $0.50 in September before going public in November.

Aphria Canabo 031017

We have written recently about Aphria’s extensive investment portfolio, and several of its investments have increased significantly in value, and the realized loss on its investment in Canabo may be an offset against unannounced realized gains from another transaction.

Before this cannabis stock news is here, it's published to subscribers on 420 Investor.

Exclusive article by Alan Brochstein, CFA

ab-byline-ncvBased in Houston, Alan leverages his experience as founder of online communities 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV.

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