CAN (ON): Aleafia charges Aphria with failure to meet cannabis supply agreement, Aphria responds to contract termination

Aleafia Health has provided Aphria Inc. with a formal notice of the termination, effective October 7, 2019, of the wholesale cannabis supply agreement dated September 11, 2018 between Aphria and Emblem Corp., a wholly-owned subsidiary of the Company, providing for the provision by Aphria of up to 175,000 kg equivalents of cannabis products over an initial five-year term, commencing May 1, 2019.

"Following Aphria’s failure to meet its supply obligations under the Supply Agreement, Emblem has exercised its contractual right to terminate the Supply Agreement in accordance with its terms," the team with the company explains. "The termination of the Supply Agreement by Emblem was made without prejudice to its rights accrued to the date of termination (including its rights to be refunded the unused balance of its deposit) and its rights to seek damages as a result of Aphria’s default and termination thereunder."

"We do not believe the termination of the Supply Agreement will materially and adversely affect our business, operations or results," they further explain.

On the other hand, Aphria has issued a statement in regards to Aleafia Health‘s termination of the Company’s wholesale cannabis supply agreement with Emblem Corp. "“We are disappointed that Aleafia has chosen to terminate its Agreement with Aphria Inc. The Company had every intention of fulfilling its obligations under the Agreement. As a large shareholder of Aleafia, Aphria made good faith efforts to ensure continuation of the Agreement understanding it was in the best interest of all parties involved. However, the termination of this legacy Agreement frees up significant supply allowing the Company to service its brands that are in high-demand across the country.” 

"The Parties are contractually obligated to negotiate for a period of 30-days following the receipt of a formal notice of termination. If the Parties fail to arrive at any agreement or settlement within the 30-days, and if Aleafia initiates a formal claim for damages, the Company intends to vigorously defend itself."

"The Agreement is not a material part of the Company’s business and operations."

For more information:
Aleafia Health

Aphria Inc.
Vic Neufeld
President & CEO

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