Plus   Neg

Aleafia Health, Aphria Settle Cannabis Supply Deal Dispute For C$29.1 Mln

Canadian cannabis company Aleafia Health Inc., its subsidiary Emblem Cannabis, and Aphria Inc. said they have agreed to settle their outstanding dispute regarding the termination of their wholesale cannabis supply agreement.

In September 2018, Aphria entered into a wholesale cannabis supply agreement with Emblem. Under the deal, Aphria was required to supply 175,000 kilogram equivalents of cannabis products to Emblem for an initial five-year period from May 1, 2019.

However, Aleafia said in October 2019 that it terminated the supply agreement as Aphria failed to meet its supply obligations under the deal.

Under the terms of the settlement agreement entered into by the three companies on Thursday, Emblem shall receive a total consideration of C$29.10 million. This includes cash payment of C$15.50 million, the issuance of C$10 million worth of Aphria shares that will be freely tradeable and transferable in Canada, and waiver of claimed receivables.

The companies agreed to a mutual release of all existing and potential claims relating to the supply agreement, and to dismiss all arbitration proceedings that had commenced previously.

"The settlement agreement is fair and satisfactory to both parties, and allows Aleafia Health to move forward with a significantly strengthened balance sheet. With a substantial injection of value into our business, we can focus on our continued growth," said Aleafia Health CEO Geoff Benic.

"Today's settlement announcement allows all of us to avoid unnecessary distraction and the potential expense of prolonged litigation, and importantly, to continue to focus on the future," said Irwin Simon, CEO of Aphria.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
The United Kingdom's Competition and Markets Authority (CMA) has launched an investigation into technology giant Apple Inc. (AAPL) following complaints that its terms and conditions for app developers are unfair and anti-competitive. iPhone maker Apple also operates the App Store, which is the only... Supermarket chain Kroger Co. on Thursday reported that it posted a loss for the fourth quarter compared to a profit last year, hurt by pension plan withdrawal liabilities. Adjusted earnings per share topped analysts' estimates, while quarterly revenues missed it. However, the company initiated adjusted earning guidance for the full-year 2021, well above analysts' estimates. Retail sales are projected to grow at a potentially record rate during 2021, but the ongoing COVID-19 pandemic remains the biggest challenge for the year, according to the National Retail Federation. "There is no doubt the economy is positioned for growth in 2021, but how much growth comes down to a single non-economic force - the coronavirus," NRF Chief Economist Jack Kleinhenz said.
Follow RTT