There’s bad news for pot stock investors as Aurora Cannabis; the once king of Licensed Producers, recently reported full-year (net) losses of $2.48 billion, according to an article in Barron’s. To add to the company’s slow and steady demise, Aurora is no longer in a leading position in the consumer cannabis market.
On the market, ACB lost C$33.94 per share for fiscal year 2020, much more than the C$17.50, which analysts were predicting. In fact, numbers were terrible all around. As Barron’s reported, “Aurora’s fiscal fourth-quarter revenue hit C$72.1 million. Cannabis net revenue was C$67.5 million. Those figures were down 5% and 3% from the prior quarter. Sales of cannabis to consumers totaled C$35.3 million, down 9% from the third quarter.”
As expected, the company had plenty of write-downs to go around, according to Barron’s. They wrote down goodwill and intangible assets by C$1.6 billion and had fixed-asset impairment charges of C$86.5. Additionally, the once king of weed in Canada had “C$135.1 million charge for the carrying value of some inventory.”
New CEO Miguel Martin tried to put a positive spin on the situation, telling investors that the company is burning through cash at a better rate than it was before, though that may be of little consolation.
“My focus is therefore to re-position the Canadian consumer business immediately,” Martin said, according to Barron’s. “We look to expand beyond the value flower segment, leverage our capabilities in science and product innovation and put our effort on a finite number of emerging growth formats.”
Meanwhile, Dr. Jason Dyck also stepped down from Aurora’s board of directors, and the company stock fell 22 percent to $5.67 on Wednesday.
Fall looking good or cannabis stocks?
According to a new report in US News and World Report, fall may be the best time to invest in cannabis stocks. Shares are expected to rise after slumping in the summer, and a slew of referendums in the states are expected to make investments in cannabis worthwhile once again.
"Historically, it's been a better time to invest once we get out of July/August," Jason Spatafora, co-founder of marijuanastocks.com and head trader at truetradinggroup.com told US News and World Report.
Timothy Seymour, founder of Seymour Asset Management in New York and portfolio manager of Amplify Seymour Cannabis ETF, said that his three top picks are GW Pharmaceuticals (GWP), Canopy Growth Corp. (CGC), and Innovative Industrial Properties (IIPR).
"The bottom line is that the industry is more investable due to greater clarity on profitability at the top firms," Seymour told US News and World Report.
Cannabis complaints in Nevada
The Cannabis Compliance Board has received a number of complaints about cannabis companies in Nevada and is set to dole out some harsh penalties, according to the Las Vegas Review-Journal. The fines could range from 30-day suspensions to 10-year suspensions.
Gravitas Nevada Ltd. of Las Vegas, a medical and recreational marijuana company, faces a $52,500 fine and a 10-year industry ban for infractions dating back to 2018. Polaris Wellness Center LLC of Las Vegas is also in trouble. They face “a $23,250 fine, and a six-year ban from the industry following a routine inspection in January that found 165 pounds of raw and package marijuana improperly stored.”
Others on the list include Tryke Companies Reno LLC and Tahoe-Reno Botanicals LLC.
In other news
The governor of Vermont is set to sign two bills: legalizing cannabis and the other to expunge records for cannabis arrests.
The cannabis industry could grow by 38 percent in 2020.
More and more medical experts believe it's time to embrace medical cannabis on a larger scale.