The Aphria settlement is a $30 million resolution of an Ontario securities class action brought by investors who bought Aphria Inc. shares between July 17, 2018, and December 3, 2018, over allegations the Canadian cannabis company misrepresented two 2018 acquisitions. The Ontario Superior Court of Justice approved the deal on March 27, 2025. After legal fees, disbursements, taxes, and a levy to the Class Proceedings Fund, roughly $13.7 million is available for distribution to eligible shareholders on a pro rata basis.
Who Qualifies as a Class Member
The class covers investors who purchased Aphria common shares during the period from July 17, 2018 through December 3, 2018. Those two dates bracket the window between the LATAM acquisition announcement and the day short-seller Hindenburg Research published the report that sent the stock down more than 25% in a single session.
Claimants need documentation of their trades: broker confirmations or equivalent records showing purchases, sales, and holdings of Aphria shares during that window. Purchases outside the class period are not covered, and the settlement does not compensate anyone for holding Tilray shares acquired later through the 2021 merger unless those shares originated from covered Aphria purchases.
How the $30 Million Breaks Down
The gross fund is divided before anything reaches investors:
- Legal fees of $9 million, the court-approved 30% contingency for class counsel Rochon Genova LLP.
- Disbursements of $3.9 million covering litigation expenses.
- HST on legal fees of roughly $1.17 million.
- A $1.5 million levy to the Ontario Class Proceedings Fund, which under Ontario Regulation 771/92 recovers its disbursements plus 10% of the net settlement when a funded case succeeds.
- Approximately $13.7 million net for the class.
The settlement was funded principally through Aphria’s directors and officers insurance policy, with contributions from the individual defendants. Aphria’s own share was estimated at $8.3 to $8.5 million, an amount Tilray disclosed had already been fully accrued on its balance sheet.
How Individual Payouts Are Calculated
Payouts run pro rata. The administrator first sets each claimant’s “notional entitlement,” generally the lesser of two figures: the actual trading loss (purchase price minus sale price) or the difference in artificial share-price inflation between the time of purchase and the time of sale. Each claimant’s notional entitlement is then divided by the estimated $160 million total of all notional entitlements across the class to produce a percentage share. That percentage is applied to the net settlement amount, estimated at $15 million for calculation purposes, to arrive at the final payout.
Claimants whose calculated entitlement falls below $10 receive nothing.
Class counsel published sample calculations to illustrate. A claimant who bought 10,000 shares and sustained $29,800 in notional losses would receive an estimated $2,844. A larger claim built from multiple purchases and sales producing $172,450 in notional losses would yield about $16,167. Final amounts depend on how many claims are approved and their total value.
Claims Deadline and Administrator
Claims administration is handled by Verita Global, LLC. Eligible investors had to submit claims by August 26, 2025, online at AphriaSettlement.com or by mail, with supporting broker documentation. Settlement administration began on April 26, 2025, thirty days after the approval order. As of mid-2026, the case remains listed on Verita Global’s website, and the administrator has not publicly confirmed whether final distributions have been completed.
Why the Case Settled for $30 Million
The plaintiffs had sought $170 million in damages. Justice Edward Morgan approved the lower figure as fair and reasonable after a hearing on March 26, 2025, at which no class members objected. His reasoning turned on three risks the class faced at trial.
Insolvency was the biggest. The defendants had warned that any large judgment would push Aphria into proceedings under the Companies’ Creditors Arrangement Act, and class counsel’s own insolvency experts agreed that a trial award would likely become an uncollectable unsecured claim. A win on paper could have meant nothing in the bank.
The defense was also formidable. Defendants filed 13 expert reports challenging the plaintiffs on accounting, governance, valuation, and regulatory standards, denied any misrepresentation, and asserted a “reasonable investigation” due-diligence defense that, if accepted, could have produced zero recovery. On top of that sat a six-week trial and near-certain appeals.
Justice Morgan noted the $30 million figure represented roughly 25% of the maximum damages available under the Ontario Securities Act’s statutory caps, and that certainty of recovery outweighed the possibility of walking away empty-handed.
What the Lawsuit Alleged
The action, filed in the Ontario Superior Court of Justice under case number CV-19-00614086-00CP, proceeded under Part XXIII.1 of the Ontario Securities Act. The representative plaintiff was Vecchio Longo Consulting Services Inc. Defendants were Aphria Inc. and two former officers, Victor Neufeld (former president, CEO, and director) and Cole Cacciavillani (co-founder, vice-president of growing operations, and director). Former CFO Carl Merton was originally named but dismissed on a without-costs basis on August 6, 2021.
The complaint centered on two 2018 acquisitions. In January 2018, Aphria announced its roughly $425 million to $485 million purchase of Nuuvera Inc. Press reports in March 2018 revealed that Aphria insiders and a deal partner named Andy DeFrancesco held undisclosed stakes in Nuuvera; the company confirmed the reports in May 2018, and its stock fell about 30% in the following weeks.
In July 2018, Aphria announced a roughly US$131 million all-stock purchase of LATAM Holdings Inc., acquiring assets in Colombia, Argentina, and Jamaica. On December 3, 2018, Hindenburg Research and Quintessential Capital Management published a joint report titled “Aphria: A Shell Game with a Cannabis Business on the Side,” alleging DeFrancesco had orchestrated the flipping of assets through shell companies at inflated prices before their sale to Aphria. The researchers said the Jamaican entity’s registered office was an abandoned building and that a listed director denied ever serving. They said the Argentine “retail platform” consisted of one small pharmacy and an empty warehouse, and that an employee put actual 2017 revenue near US$430,000 against public claims exceeding US$11 million. Aphria’s Nasdaq-listed shares closed at $4.51 on December 6, 2018, down more than 25% in a day.
The plaintiffs identified two corrective disclosures: March 23, 2018, for the Nuuvera insider reports, and December 3, 2018, for the Hindenburg report. They alleged Aphria’s public filings contained false and misleading statements about both acquisitions, failed to disclose material insider conflicts, and reflected inadequate disclosure controls. Aphria called the short-seller allegations “malicious” and “inaccurate and misleading.” The settlement is not an admission of liability by any defendant.
Who Paid, and What Happened to Aphria
Aphria no longer exists as an independent company. On May 3, 2021, it merged with Tilray, Inc., with Aphria shareholders receiving 0.8381 of a Tilray share for each Aphria share. Irwin D. Simon, who had replaced Neufeld as Aphria’s CEO, became chairman and CEO of the combined entity. Tilray inherited the litigation and confirmed at the time of settlement that Aphria’s portion of the payment was fully accrued and would not affect earnings.
Most of the $30 million came from Aphria’s D&O insurance policy, with contributions from the individual defendants making up the balance alongside the company’s own accrued share.