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Canadian cannabis producer Aphria Inc. and its American suitor first held discussions about a potential partnership last September, in a sit-down brokered by Aphria’s recently replaced legal adviser, new regulatory filings reveal.

On Wednesday, Aphria’s board rejected a hostile takeover bid launched by Ohio-based Green Growth Brands Inc. The suitor is a newly created company backed by the Schottenstein family and run by former retailing executive Peter Horvath.

In its circular rejecting the takeover approach, Aphria revealed that its chief executive and a board director first met with Green Growth in September to discuss an investment or joint venture. The disclosure changes the narrative around the history between the two companies. Until the filing, Green Growth had only said it previously considered multiple opportunities, and specifically targeted Aphria in December after its stock price plummeted in the face of short-seller attacks.

The takeover circular also adds details to the web of connections between Aphria and Green Growth – overlap that has raised questions about the suitor’s independence – and sheds new light on Aphria, which has recently undergone shakeups at both the board and executive levels.

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In its filing, Aphria disclosed that CEO Vic Neufeld was invited to the September meeting by the company’s previous counsel at Stikeman Elliott. The law firm has since been replaced as the company’s legal adviser. Stikeman Elliott declined to comment, saying it does not talk about client matters.

Aphria also revealed that director Shawn Dym accompanied CEO Mr. Neufeld at the September meeting. Mr. Dym sat on Green Growth’s board of directors until November, 2018, and was a director of both companies during the sit-down.

Mr. Dym also contemplated different options for Aphria’s future in December and held “conceptual discussions with representatives of three different cannabis companies about a potential transaction (one of which was Green Growth)," according to the filing. Aphria said these discussions “were not the result of any direction from the Aphria board."

Because of this history, Mr. Dym abstained from voting on the board’s rejection of the hostile takeover bid on Wednesday. He did not return a request for comment.

Finally, the new circular clarifies an unusual disclosure in Green Growth’s own takeover filing in January.

When the suitor formally bid for Aphria on Jan. 23, it disclosed that Aphria had invited Green Growth to tour its cultivation facility in Leamington, Ont., on Dec. 20, at a time when the two companies were discussing a potential takeover in private. Yet on the day of the tour, Aphria’s counsel contacted Green Growth’s lawyers to tell them that Aphria’s board wanted them to leave the premises. No explanation as to why was given in the filing.

On Wednesday, Aphria confirmed that 12 people tied to Green Growth, including company executives as well as Jay and Joey Schottenstein, were invited by Aphria’s management to tour its Leamington, Ont., cultivation facility. However, Aphria had just set up an independent committee to evaluate a potential takeover by Green Growth, so management was told “not to engage in a discussion regarding any potential transaction as any such discussions would be conducted under the direction and supervision of the independent committee.” After the tour was finished, Green Growth’s team was told by Aphria’s newly hired counsel to leave.

Aphria has overhauled its board and management team since December, when short-sellers alleged the company vastly overpaid for assets in the Caribbean and Latin America and Green Growth also went public with its intention to launch a hostile bid.

Aphria has explained little about the overhaul. However, after these developments the company appointed Irwin Simon as a new independent board chair. Previously, Mr. Neufeld was both CEO and chairman. When Mr. Simon was appointed, Aphria told The Globe and Mail that the appointment was made in “the normal course process to advance Aphria’s corporate governance,” and that “it did not have any relation to the GGB proposal.”

A few weeks later, in early January, Aphria announced that Mr. Neufeld would be stepping down as CEO in the coming weeks, as would co-founder and vice-president of growing operations Cole Cacciavillani. Shortly after that, Aphria confirmed that it had hired new financial and legal advisers – Scotia Capital and Faskens LLP, respectively.

Aphria did not respond to a request for comment for this story.

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