Here's What Pushed Aphria Inc. Down on Thursday

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What happened

Shares of Aphria Inc. (NYSE: APHA), a rapidly expanding cannabis producer based in Canada, have fallen around 63% since adult-use marijuana sales began in its domestic market, in part because of serious allegations in a short-seller report. The volatile stock dropped 10% during Thursday's trading session as investors waited for a detailed rebuttal to those that never arrived.

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So what

Earlier this month, Aphria stock tanked for two straight days after a short-seller accused the company of buying worthless companies owned by management and other insiders at inflated prices. Aphria has a history of buying assets that company insiders own a piece of, so the report received a great deal of attention.

On Dec. 6, 2018, the company appointed a special committee to review its recent LATAM acquisition. Last week, Aphria's CEO, Vic Neufeld, promised a highly detailed rebuttal to the allegations, most likely by Wednesday, which still hasn't appeared.

Now what

Investors wondering what could be taking so long will probably pressure the stock further in the near term if the promised rebuttal never appears. I can't remember the last time I've seen a company's newsfeed so heavily clogged with class action lawsuit announcements, and shareholders are going to want answers.

Despite the tumble Aphria stock has taken lately, this company still boasts a big $1.15 billion market cap that is 28.5 times the total sales recorded during the year ended August. If the company can't show us clear signs that its investments are going to generate significant sales growth, the stock will continue tumbling in the quarters ahead.

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.