Two shareholders of marijuana producer Aphria face US fraud charges

What’s the right revenue per square foot? What’s a realistic business outlook for cultivators? Get realistic market forecasts, state-by-state insights and benchmarks. Get the 2023 Factbook.

(This story has been updated to note that the Justice Department stressed the defendants are “presumed innocent unless and until proven guilty” of the allegations.)

Two Florida residents face charges related to their participation in an alleged insider trading scheme that generated roughly $4 million in profits in 2019, including approximately $2.2 million from trades of then-Canadian cannabis producer Aphria.

In early December, Kris Bortnovsky and Ryan Shapiro were arrested and charged by the U.S. Department of Justice with one count each of conspiracy to commit securities fraud.

The men face potential sentences of up to five years in prison, if convicted, plus a fine of $250,000.

The defendants appeared in federal court in the Southern District of Florida on Dec. 8 and are to appear in a Boston court at a later date, according to a Justice Department news release.

“The details contained in the charging document are allegations,” the release noted.

“The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.”

The criminal complaint alleges the men conspired to trade in the stocks of publicly traded companies using material nonpublic information regarding earnings and M&A activity, including Aphria, At Home Group retailer, Designer Brands and the Rite Aid drugstore chain, among others.

For instance, a cooperating witness is said to have tipped off Bortnovsky and Shapiro about cannabis retailer Green Growth Brands’ plan to acquire Aphria before the public announcement of the bid.

The cooperating witness learned of the pending hostile takeover attempt directly from a board member of Green Growth Brands, based in Columbus, Ohio.

The board member is said to have been unaware that the cooperating witness was sharing information with Bortnovsky and Shapiro, per the document.

Neither the board member nor the witness was identified in the court document.

Green Growth publicly announced its intention to launch a takeover bid for Aphria on Dec. 27, 2018, sending shares of the Canadian marijuana grower soaring. Aphria shares traded on the Nasdaq and Toronto Stock Exchange at the time.

According to the criminal complaint, the cooperating witness, known as “CW-1,” is expected to plead guilty to a felony and has entered into a cooperation agreement with the government in the hope of receiving a more lenient sentence.

Business leaders need reliable industry data and in-depth analysis to make smart investments and informed decisions in these uncertain economic times.

Get your 2023 MJBiz Factbook now!

Featured Inside:
  • 200+ pages and 50 charts with key data points
  • State-by-state guide to regulations, taxes & opportunities
  • Segmented research reports for the marijuana + hemp industries
  • Accurate financial forecasts + investment trends


Stay ahead of the curve and avoid costly missteps in the rapidly evolving cannabis industry.

The government said it corroborated information from the witness via various sources of information, including taxi receipts, emails, text messages, telephone records, and trading records.

Green Growth’s bid for Aphria ultimately fell apart in 2019.

The following year, Green Growth filed for bankruptcy and Aphria announced its planned merger with rival Canadian cannabis producer Tilray.

– Matt Lamers