Purple cannabis

Business is bad for Aurora Cannabis

in

If you’ve read news from the cannabis industry lately, there’s a good chance you’ve heard of Aurora Cannabis. While stocks in Aurora are popular, the company has a huge problem: they’re struggling to turn a profit. 

Aurora is a Canadian cannabis company listed on the New York Stock Exchange. (NYSE: ACB). The company operates in Australia through partner MedReleaf and previously held shares in the Cann Group

Aurora initially promised investors they would achieve positive earnings before income, tax, depreciation and amortization (EBITDA) in 2019. That goal was then pushed to June 2020, and again to December, with the company’s current standing looking pretty grim.

Aurora has recently expanded into Canada’s ‘Cannabis 2.0’ market, releasing some vape products and a line of cannabis-infused edibles. Although Canada’s Cannabis 2.0 market is worth $CA2.7 billion annually, Aurora only made $CA3.6 million between June and October. Using the EBITDA metric, this is a loss of $CA57.8 for that quarter. 

Aurora also came close to being delisted from the NYSE in April, after they failed to keep their price above $US1 for 30 trading days

While the company has been struggling, they’re still trying to salvage the situation. Plans to save money were announced back in June, including reducing the company’s selling, general and administrative costs. While this dropped costs 24.7% to CA$44.3 million in the fourth quarter of FY 2019-20, it isn’t enough to make Aurora profitable. 

Aurora cannabis logo

In an effort to cut costs Aurora has also closed six of their facilities, including the $CA250 million Sun Greenhouse in Alberta. This greenhouse was closed just last week and was originally designed as the largest cannabis greenhouse in the world. 

Other facilities have been sold for below market rate, including a $CA17 million greenhouse in Ontario that sold for 50% of its value. 

Aurora’s exit from Australia’s Cann Group was hardly helpful either. Aurora invested $32.4 million into the company over several years, only to sell their 11.84% share for an estimated $AU13.4 million in October

While Aurora still has potential as a global cannabis giant, it’s hardly one of the world’s top cannabis stocks.

Stay informed with the latest cannabis news in Australia.

Tags:

Latest from International

Stay informed with the latest cannabis news in Australia.

Stay informed with the latest cannabis news in Australia.

Go to Top