The Aphria Medical Cannabis logo is shown in this undated handout image. Aphria is a Health Canada Licensed Producer of medical cannabis products. THE CANADIAN PRESS/HO-Aphria *MANDATORY CREDIT*

LEAMINGTON, Ont. - Shares of cannabis producer Aphria Inc. recouped some of their losses as its board of directors appointed a special committee to review the company's acquisitions in Colombia, Argentina and Jamaica, which have been criticized by short-sellers.

The Leamington, Ont.-based company's board said it still has "confidence" in the deal, but in the face of "inaccurate and misleading accusations" contained in a short-sellers report published this week it has tasked a committee of independent directors with a comprehensive review.

"We are committed to protecting our shareholders and restoring market confidence by confirming all the facts through an independent process to rebut innuendo and deception," said Vic Neufeld, Aphria's chief executive officer in a statement on Thursday.

"Until then, it is business as usual at Aphria, as we continue taking significant steps to solidify our position as a premier global cannabis company."

Shares of Aphria rose 51 per cent to close at $7.55 on the Toronto Stock Exchange on Thursday, ending a three-day losing streak. However, the company's stock remains 28 per cent below its $10.51 close on Friday before two short-sellers called Aphria a "black hole" for shareholders.

Quintessential Capital Management and Hindenburg Research have alleged that the cannabis grower's acquisition of assets in Colombia, Argentina and Jamaica totalling $280 million from Scythian Biosciences were "largely worthless." Their report also alleged that Aphria had bought these assets at "vastly inflated prices" from Scythian, which had purchased them from Canadian shell companies.

The short-sellers also alleged that "Aphria is part of a scheme orchestrated by a network of insiders to divert funds away from shareholders into their own pockets."

Quintessential and Hindenburg have said they are short on Aphria. By selling shares short, investors makes money when the price of a company's stock falls.

Aphria has called the short-sellers' allegations "false and defamatory" and it "unequivocally stands behind" its Latin American operations. Neufeld has said that he and other members of the company's executive team bought a total of more than $3.1 million in Aphria shares on Monday as a demonstration of confidence in the company.

Scythian, now called Toronto-based SOL Global Investments Corp., has also said it is "satisfied" with the outcome of the transaction, and that the deal completed in September was "thoroughly reviewed by both parties."

The Ontario Securities Commission and the U.S. Securities and Exchange Commission both declined to comment on whether it was investigating this issue.

Aphria's board said Thursday the special committee includes John Herhalt, Shlomo Bibas and Tom Looney. Herhalt, who is the lead independent director and the head of the audit committee, will lead the special committee.

Meanwhile, Hindenburg on Thursday published a report targeting Liberty Health Sciences, calling it an "extension of the Aphria web of highly questionable deals."

Liberty did not immediately respond to requests for comment.

Companies in this story: (TSX:APHA, CSE:LHS)

News from © The Canadian Press, 2018