An earlier version misspelled the company's name in the first reference. It has been corrected.

Shares of Aphria Inc. APHA, -3.85% plummeted 23% to pace all NYSE decliners in morning trade Monday, after Quintessential Capital Management and Hindenburg Reseach issued a research note about the Canada-based medical cannabis company titled "The Black Hole." Quintessential said it opened a short position, or bearish bet, in the stock, as Hindenburg said the company's recent C$280 million ($212.3 million) Latin America acquisitions "raise major red flags," as its "on-the-ground research" shows that the transactions appear to be largely worthless. For example, the C$145 million acquisition in Jamaica is an abandoned building that was sold off by the bank earlier this year, while the C$50 million purchase in Argentina was said to have $11 million in sales in 2017, while an employee of the company said 2017 revenue was only $430,000. "Allegations that have been made by the short seller Quintessential Capital in the report that they published this morning are false and defamatory," said Aphria spokesperson Tamara Macgregor. "The company is preparing a comprehensive response to provide shareholders with the facts and is also pursuing all available legal options against Quintessential Capital." Aphria's stock has shed 53% over the past three months, while the ETFMG Alternative Harvest ETF MJ, -4.65% has lost 14% and the S&P 500 SPX, -0.69% has given up 4.3%.