Aurora Cannabis (ACB) is going through a rough patch. This year, the company’s stock has lost 60.9% of its value as of December 23. Weak performances in the last two quarters, increasing debt, and a decline in the company’s cash appear to have dragged its stock down.
The resignation of its chief corporate officer, Cam Battley, on Saturday, also led the company’s stock to fall over 10% yesterday. Amid this negative news, Aurora provided an update on its upcoming Cannabis 2.0 products, existing operations, and financing.
Aurora Cannabis set to focus on effective capex usage
Aurora had previously announced a delay in the construction and commissioning of activities at some of its facilities, citing a decline in the demand for cannabis products. Management announced that the decision had saved the company approximately 200 million Canadian dollars. It also said it would start construction when demand picked up.
Meanwhile, Aurora retired unsecured convertible debentures worth 227 million Canadian dollars last month by issuing additional shares. The company stated that the initiative had saved it vital cash it would have had to pay at the time of maturity in March 2020. The company also announced that it had access to 360 million Canadian dollars’ worth of credit facility along with its $400 million at-the-market distribution program.
Aurora’s upcoming Cannabis 2.0 products
After receiving initial orders on December 17, 2019, Aurora Cannabis began shipping its Cannabis 2.0 products. The company expects these products to hit the shelves by early January 2020. Initially, the company will be offering vapes and edibles. It’s offering vapes made from THC and CBD. Its edibles consist of gummies, chocolates, baked goods, and mints.
Aurora has announced that it’s been prioritizing its resources for the manufacturing of Cannabis 2.0 products. It added that it’s also building inventories of Cannabis 2.0 products to help its customers access its diverse portfolio of derivative products. The company is producing its Cannabis 2.0 products at its Aurora Sky, Aurora River, and Aurora Vie facilities. It’s also encouraging its customers to participate in its “Ready for Edibles” campaign, which focuses on responsible consumption of derivative products.
Earlier this month, Aurora’s peer Canopy Growth (WEED) (CGC) provided an update on its upcoming Cannabis 2.0 products. For more info, read A Look at Canopy Growth’s Cannabis 2.0 Portfolio. Yesterday, Organigram Holdings (OGI) announced that it had started the shipment of its Cannabis 2.0 products. Let’s look at Aurora’s update on its international business and its flagship store in the West Edmonton Mall in Alberta.
Growth in international business
Aurora stated that the Danish Medicines Agency had approved the import of Aurora’s Sedamen Softgels capsules into Denmark. It added that it was currently working on obtaining Health Canada’s approval. The company expects to export the first shipment of the products from its Aurora Ridge facility in the first quarter of 2020.
In Ireland, the country’s new Medical Cannabis Access Programme approved Aurora’s CBD oil drops. The approval allows the product to be imported, prescribed, and supplied in the country.
Aurora opens its flagship retail store
On November 27, Aurora opened its flagship store, which spans 11,000 square feet, in the West Edmonton Mall. Along with the retail cannabis store, the location also offers space for educating customers, conducting events, and engaging with the community. The company announced that the store has an average of 700 visitors per day.
Yesterday, Aurora Cannabis provided updates on the construction and licensing of its various facilities. It also provided insights into the recent development of its strategic partnerships. We expect the introduction of Cannabis 2.0 products and the initiatives undertaken by various provincial governments in Canada to result in more stores and drive Aurora’s sales growth.
Aurora underperforms its peers
This year, Aurora Cannabis has underperformed its peers. As of December 20, the company has lost 60.9% of its stock value. Meanwhile, peers Canopy Growth, Aphria (APHA), and Cronos Group (CRON) have fallen 29.1%, 18.2%, and 35.8%, respectively. The ETFMG Alternative Harvest ETF (MJ) and the Horizons Marijuana Life Sciences Index ETF (HMMJ) have fallen 32.1% and 38.7%, respectively, year-to-date.
Despite the fall of over 60% in its stock price, analysts prefer a “buy” rating for the stock. For more info, read What Do Analysts Recommend for Aurora Cannabis? Analysts expect the company to report positive EBITDA starting from the second quarter of fiscal 2021, which ends in December 2020.
Be sure to visit 420 Investor Daily for more marijuana-related news and updates.