(Bloomberg) -- Beleaguered cannabis producer Aphria Inc. says its chief executive officer will step down following short-seller allegations that have hit the company’s stock.

CEO Vic Neufeld and co-founder Cole Cacciavillani “are both nearing the end of their five-year journey with the company and will transition out of their executive roles over the coming months but remain on the board,” the company said in a statement Friday.

Newly appointed chairman Irwin Simon and President Jakob Ripshtein, who joined the company from Diageo Plc in May, will “complete a smooth and responsible transition to a globally-minded executive leadership team,” the company said.

The leadership transition comes after short sellers Hindenburg Research and Quintessential Capital Management sparked a plunge in Aphria’s shares after alleging the company sold assets at inflated prices to insiders. Since their report was released on Dec. 3, the company’s stock is down 17 percent.

Aphria is the target of a proposed hostile takeover bid by Green Growth Brands Inc., which has also raised questions about connections between the two companies.

Aphria reported revenue of C$21.7 million ($16.4 million) for the quarter ended Nov. 30, below the average analyst estimate of C$28.8 million. Net income was C$54.8 million or C$0.22 per share, compared with C$0.09 a share last year, with the increase related to gains on its long-term investment portfolio.

Aphria’s stock fell 3 percent in pre-market trading, to $6.39 each as of 7:30 a.m. in New York.

To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Jacqueline Thorpe

©2019 Bloomberg L.P.