Canadian cannabis company Aphria, run by Irwin Simon, continues to tout the narrative that another cannabis company backed by Ohio mega millionaires, the Schottenstein family, made an unsolicited and hostile take over offer of Aphria this January after the company was exposed for alleged corporate disclosure conflicts and overpaying for cannabis assets that were owned by insiders. The news, announced by Aphria ($APHA) when alleged bad actor Vic Neufeld was still listed as the company CEO, caused a run up on the stock whose value had been sliced in half after two investment funds published a detailed and documented report questioning the company’s leadership. Under Simon’s leadership this theme of another cannabis company making a hostile move against Aphria is repeated in profiles highlighting his work as CEO. But new text messages between Andy Defrancesco and Michael Serruya show the Green Growth Brands offer was engineered and designed by Defrancesco and Serruya because they knew the board was going to kick out their friendly CEO Vic Neufeld after fallout from the short seller report. Instead of a “hostile” takeover it should have been described as back-stop by insiders to halt the massive shareholder exodus that the short seller report and follow on media stories were generating.
Green Growth Brands ($GGB), which now basically operates as a shell company, was originally founded by Canadian entrepreneur/investor Adam Arviv, Joseph Schottenstein, and the former COO of Victoria’s Secret Peter Horvath. Schottenstein co-invested with Andy Defrancesco, Michael Serruya and Barry Honig in a deal to obtain cannabis dispensary licences in Ohio, according to state license application records. The investment partnership was called Schottenstein Aphria III LLC. Arviv is a regular co-investor in deals backed by Serruya and Defrancesco like Therapix ($)TRPX, according to internal documents tracking investors in the stock complied by Laidlaw & Co the broker dealer on the IPO. Therapix announced this week it would reverse merge into a CBD subsidiary of Defrancesco’s Sol Global Investments called Heavenly RX. I have previously reported how Andy Defrancesco recently bought a new double digit million Miami home down the street from the Schottenstien’s Miami home.
Text messages from early February 2019 show Andy Defrancesco writing Michael Serruya upset that Irwin Simon, who was chairman of the board at the time, was talking directly with the Green Growth guys.
Andy writes: Daviau and Irwin are talking now. I told Daviau we would handle it- you & I. Have you had time to think about our conversation?”
“I bounded it off Jay this morning and he was fine with it. We’d prefer…would be best to go on the board if you’d invite him to. Also we would want to announce some kind of working relationship in CBD. We should set a deadline to figure this out and don’t want to waste to much of either of our time on it.
[Daviau is Dan Deviau the CEO of Canadian investment bank and broker dealer Canaccord Genuity }
Serruya wrote back: “Irwin and others are bushing back on the Schottensteins and board seat”
Andy writes: “What would you suggest then? Sort of blows up our entire idea if we don’t have all the parties in line.”
Serruya doesn’t respond.
Then the next day Andy text Serruya: “Irwin is reaching out to Jay? What’s the story. I told Jay you and I are handling it.”
Andy and Mike appear to be negotiating board seats in this text exchange. Keep in mind Serruya is on the board of Aphria but Andy is not. The tone of the conversation also doesn’t seem hostile. Instead it appears to be a manipulation by Mike and Andy with the help of their friend Jay Schottenstein. This assumes of course the deal was for a price Schottenstein would pay.
According to a person familiar with the transaction Canaccord was hired to make an offer to Aphria so a real transaction was put into play. Adam Arviv of Green Growth Brands has a close working relationship with Canaccord.
When Irwin Simon officially came on as interim CEO of Aphria he made multiple media appearances saying that the Green Growth Brands offer wasn’t a price Aphria was worth. It appears he ended up shutting down the Defrancesco/Serruya plan and in mid April when the company announced the Green Growth Brands offer was off the table.
The text messages obtained by this reporter don’t give us a complete look at how the end of this takeover plan went down. But what is clear is this is another example of how Andy Defrancesco works with Canadian mega millionaire Michael Serruya to influence and control public companies from behind the scenes to benefit themselves before shareholders.
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