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Short Seller's Pot Allegations Spread, Liberty Health Targeted

Kristine Owram
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Short Seller's Pot Allegations Spread, Liberty Health Targeted

Short Seller's Pot Allegations Spread, Liberty Health Targeted

(Bloomberg) -- Liberty Health Sciences Inc. is the next cannabis company in the sights of short sellers Hindenberg Research, which says in a new report that the Florida-focused company is part of the same “web of highly questionable deals,” that led it to short Aphria Inc.

Hindenburg said its examination of Aphria led it to Liberty Health, where it "uncovered multiple irregularities that raise more questions around believed undisclosed insider self-dealing"Liberty Health didn’t immediately respond to requests for commentReport says Liberty Health paid C$13.5 million ($10.1 million) for real estate from a private entity controlled by Andy DeFrancesco, which had bought it six days earlier for C$8.5 millionDeFrancesco is chairman of SOL Global Investments Corp. and mentioned in earlier short report by Hindenburg and Quintessential Capital Management, which alleges shell companies linked to DeFrancesco sold assets to SOL which sold them on to Aphria at "inflated" pricesAphria CEO Vic Neufeld is also chairman of Liberty Health and holds shares in the companyLiberty Health shares fell as much as 8.5 percent, then rebounded, trading up 2.4 percent to 84 cents at 2:20 p.m. in Toronto; Aphria shares were up 30 percent.For more details on the original report: Aphria Plunges as Short Seller Calls Pot Firm ‘Black Hole’

To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Jacqueline Thorpe

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