Aphria Inc. (APHA.TO) has formally rejected Green Growth Brands Inc.’s unsolicited takeover offer.

"The Aphria Board of Directors unanimously believes that GGB's hostile offer is significantly undervalued and inadequate and not in the interest of Aphria shareholders on multiple grounds," said Irwin Simon, Aphria's chair, in a release Wednesday.  

“GGB offers shares in an illiquid company with limited operating history, minimal assets and no track record in the cannabis industry,” he added.

Simon went on to say there is no guarantee that Ohio-based Green Growth Brands, which is offering 1.5714 of its shares for each Aphria share, would be able to fund the capital requirements of the combined company.

“It’s no surprise they’re rejecting the offer –  it’s all paper and it’s at a bit of a discount to the existing price,” said John Zechner, chairman and founder of J. Zechner Associates, in an interview with BNN Bloomberg Wednesday.

When reached for comment, a Green Growth representative said the company will provide a response to Aphria’s rejection “in due course.”

Aphria had until Thursday to respond to Green Growth’s offer, which was formally submitted last month, according to a representative from Green Growth Brands. The unsolicited offer is scheduled to expire on May 9.

After the offer was submitted, Aphria had recommended shareholders hold off tendering until an independent committee of its directors made a recommendation to the full board.

Aphria’s stock tumbled in December on the heels of a report from short sellers Quintessential Capital Management and Hindenburg Research but has climbed out of the doldrums after rallying substantially this month. The report accused Aphria of buying a number of Latin American assets at highly inflated prices. Investors are still waiting for Aphria to publish a line-by-line rebuttal to the report.

Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new – and controversial – Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day.