Medical marijuana plants seen at Aphria's Leamington greenhouses on February 19, 2016. (Photo by Ricardo Veneza)

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A Leamington pot producer is fighting back after being accused of running a shell game with its cannabis business.

A research firm called Hindenburg Research is accusing Aphria Inc. officials of diverting funds from shareholders and into their own pockets.

“We are of the strong opinion that Aphria is part of a scheme orchestrated by a network of insiders,” the December 3 investigative report said.

The report added that Aphria’s recent $280 million Latin American acquisitions raise major red flags.

“Our extensive on-the-ground research shows that the transactions appear to be largely worthless,” Hindenburg Research said.

The firm said the official registered office of Aphria’s $145 million Jamaican acquisition is an abandoned building that was sold by the bank earlier this year. The researcher added that Aphria’s $50 million Argentine acquisition publicly boasted sales of $11 million in 2017, but a worker at the company said that 2017 revenue was only $430,000.

Hindenburg Research said documents show that Aphria is changing the names of the shell companies involved in a way that makes it harder to link them to Aphria’s insiders. The research firm estimates that Aphria has diverted more than $700 million through such transactions, or about 50 per cent of Aphria’s total net assets.

Aphria said it believes the report is a malicious and self-serving attempt to profit by manipulating Aphria’s stock price at the expense of Aphria’s shareholders.

“The Latin American acquisition received financial advice and a fairness opinion from a reputable firm that the consideration to be offered by Aphria in respect of the transaction was fair, from a financial point of view to Aphria and its shareholders,” Aphria added.