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Report: Suitors Line Up For Cannabis Producer Aphria

October 12, 2018

Altria Group, the parent company of Ste. Michelle Wine Estates and Philip Morris USA, is reportedly in talks to acquire a stake in Canadian cannabis producer Aphria. According to Canada’s Globe and Mail news outlet, Altria executives have had several meetings with Aphria’s leadership toward a potential deal. But Altria may not be the only prominent firm angling for a stake in the cannabis company.

Aphria already has ties to the U.S. wine and spirits industry. In May, the company tapped Southern Glazer’s Wine & Spirits as its exclusive distributor throughout Canada. And Aphria’s chief commercial officer is Jakob Ripshtein, formerly CFO of Diageo North America. The Globe and Mail reports that Aphria will add another ex-Diageo executive—former president of U.S. Spirits and Canada, Tom Looney—to its board at its annual meeting on November 2, and is exploring a potential listing on the New York Stock Exchange.

Aphria said in a statement that while it “engages in discussions with potential strategic partners and/or investors from time to time, the company notes that there is no agreement, understanding, or arrangement in place with a potential investor at this time.”

In August, Bloomberg reported that Diageo had held talks with at least three Canadian cannabis producers toward a potential investment. While the drinks giant hasn’t commented on any specific negotiations, Diageo North America president and CEO Deirdre Mahlan told SND earlier this year that cannabis “is an area we’re watching closely. I won’t comment specifically on any plans we may or may not have, but that category is going to continue to develop. We see that happening as it expands in Canada and some states in the U.S.”

Meanwhile, Aphria reported this morning that revenues more than doubled to C$13.3 million ($10.2m) in the three months through August, marking its fiscal first quarter. The company also detailed its suite of “adult-use” cannabis brands created ahead of the beginning of recreational sales in Canada on October 17. The brands include Solei, Broken Coast, Riff, Good Supply, and Goodfields, and are each targeted to different consumer demographics, from novices to experienced users.—Daniel Marsteller

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