Aurora Cannabis Inc Archives - Green Market Report

Debra BorchardtDecember 16, 2020
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Aurora Cannabis Inc.  (NYSE: ACB) provided a business update amending the company’s credit facility. The shares were falling in price on the news and were lately down 1% and selling at $10.01.

The company said that there are no changes to the commitment amounts under the facility which currently stand at $101.2 million under the term loan and $15 million under the revolver (currently $2 million drawn). The second amended and restated credit facility has a first ranking general security interest in the assets of Aurora and can be repaid without penalty at the company’s discretion.

“Our substantial liquidity position has enabled us to revise our credit facility terms by extending maturity and transitioning us from a minimum EBITDA covenant to a minimum liquidity covenant, thereby providing us with the financial flexibility we need to execute our business transformation plan.  We are already seeing progress with improving cashflow and product successes such as the recent relaunch of our vapour portfolio.  We are also driving our consumer strategy that will serve as a foundation for sustainable revenue growth and profitability over the long-term” stated Miguel Martin, Chief Executive Officer of Aurora.

Stifel analyst Andrew Carter said, “Our outlook suggested difficulty in conforming to outstanding covenants, but the delay in achieving positive EBITDA suggests downside to our estimates. We continue with our Sell rating, and we will update our outlook.”

The company said in a statement that this strategy will delay its ability to achieve positive Adjusted EBITDA as management invests in its consumer business; a strategy that the company believes will serve as a foundation for sustainable growth and profitability in the future. Also contributing to the profitability delay is the unpredictability of the current demand environment, including the resurgence of COVID-19.  However, with ~$450 million in cash on hand as of December 15, 2020, management is confident in its liquidity position and its ability to fund its current plan while maintaining optionality for future opportunities.”

Closing Aurora Sun

In addition to the change in the company’s revised credit facility, Aurora it is closing the Aurora Sun facility and has reduced production at its Aurora Sky facility by 75%.  Aurora Sky is testing new processes and methodologies proven successful at other cultivation sites in Aurora’s leading network, combined with an increased focus on innovation led by deep plant science and genetics expertise.

Mr. Martin concluded “These hard decisions are being taken to improve cash flow and provide agility to our business. We will continue to make decisions and transform Aurora in the long-term best interests of our shareholders.  We look forward to 2021 and providing updates on our business transformation.”

“We are moving to a more variable cost structure in cultivation by expanding our network of external supply and responsibly scaling back production from our fixed asset network. Specifically, in November we closed our Aurora Sun facility and are now scaling back production at Aurora Sky to 25% of its previous capacity. At this level of production, we intend to transform the Sky facility into a high-value cultivation center for our premium strains, and in turn, better align production with current demand for premium flower.”

“Our plan to address the opportunities in the Canadian consumer market, combined with a formidable balance sheet, positions Aurora to remain the leader by revenue in the high-margin Canadian medical market. It also allows the Company to invest in the international medical business, which is exhibiting solid growth.  Lastly, we will be able to build on our CBD brand Reliva, which is #1 ranked by Nielsen in U.S. CBD.”


Debra BorchardtJune 24, 2020
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7min12670

Aurora Cannabis Inc. (NYSE:ACB) announced several difficult moves from the company including the layoffs of numerous employees and the closing of several facilities. The Canadian cannabis company laid off 25% of Aurora’s SG&A staff, most of those to take place immediately and a roughly 30% reduction in production staff over the next two quarters. The cuts went to the highest levels including a restructuring of the executive leadership team and the recently announced retirement of President Steve Dobler. 

Aurora said it has initiated a plan to close operations at five facilities over the next two quarters in order to focus production and manufacturing at the Company’s larger scale and highly efficient sites. The company will take a charge of $60 during the fourth quarter in order to make these changes. Certainly, it was awful news for the workers at the company who are losing their jobs during a pandemic, but it seemed to cheer the analysts covering the company as ratings were changed. 

Stifel Upgrade

Stifel analysts upgraded Aurora Cannabis to hold from sell following the news and said that the company has “weathered the storm.” The stock price target was also raised from C$6.20 to C$17.50 ($12.89). “We believe ongoing cash needs, potential equity dilution, and risk around debt covenants remain as impediments to a more constructive approach with the shares enjoying a still robust valuation (C$2.5 billion enterprise value),” the analysts wrote. “But with the reiteration of the F1Q21 positive EBITDA target, market share gains by Aurora, and stronger Canadian market trends, we believe the fundamental outlook and potential for capitalizing on the global cannabis category’s development are back in focus.”

With regards to the closures of the facilities, analyst Andrew Carter wrote, “We believe the ongoing costs from these facilities are well ahead of the sales associated with them, and the facilities targeted for closure are not producing second generation products. Aurora suggested these actions will be accretive to
the gross margin overall. We believe these savings will provide fuel for remaining competitive against continued price compression in the Canadian dried flower market. Aurora outlined C$200 million in total expected charges: C$60 million in asset impairment charges and $140 million in inventory, primarily trim, 60% from capitalized costs. The latter illustrates the significant burden and associated risk from inventory, and the facility closures will aid the company’s goal of working capital as a benefit, though we remain cautious given the demands of the evolving category.”

Increased Sales Estimate

The analyst also increased his estimates for sales and EBITDA bringing the F1Q21 EBITDA estimate in-line with company guidance. “We are increasing our F4Q20 revenue estimate to C$75 million (from C$67 million) with a stronger performance in the Canadian Consumer segment. Aurora has gained market share
(outlined below) positioning the company well against a Canadian market that has performed above our expectations with April sales flat from the surge in March. We now estimate flat F4Q20 Canadian adult-use sales with robust consumption tempered by wholesale/retail inventory reductions and dried flower pricing compression. We estimate C$487 million in FY22 sales, +70% from our FY20 estimate driven by growth of the Canadian Consumer business. Our outlook considers Aurora keeping pace with the growth of the Canadian adult-use market with narrow but steadily improving EBITDA, an outlook we believe affords room for error in an increasingly competitive/fragmented Canadian market.”

Other Analyst Changes

Cantor Fitzgerald reiterated its overweight rating on the stock late Tuesday. Canaccord Genuity dropped its price target from C$24 to C$21 (roughly $17 to $15.) Analyst Bobby Burleson wrote, “On the back of Tuesday’s corporate updates, although we believe the rightsizing of Aurora’s operations is a crucial step in the company’s path to profitability, with >C$1.2B of announced write-offs so far in the first six months of 2020 (or ~25% of the book value of ACB’s net assets), a high degree of uncertainty still clouds this name. As a result, we have lowered our pricing assumptions for dried bud and added a 100bp premium to our adult-use valuation for execution risk. As a result, we are lowering our PT to C$21.00 (from C$24.00).”

According to CNN Business, 15 analysts offering 12-month price forecasts for Aurora Cannabis Inc have a median target of $10.33, with a high estimate of $19.31 and a low estimate of $7.10. The median estimate represents a -24.00% decrease from the last price of $13.59. The current consensus among 17 polled investment analysts is to hold stock in Aurora Cannabis Inc. This rating has held steady since June when it was unchanged from a hold rating.


StaffJune 23, 2020
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5min35300

Aurora Cannabis Inc.  (NYSE: ACB) is the latest cannabis company to destroy the job argument as a reason for legalization. The Canadian cannabis company laid off 25% of Aurora’s SG&A staff, most of those to take place immediately and a roughly 30% reduction in production staff over the next two quarters. The cuts went to the highest levels including a restructuring of the executive leadership team and the recently announced retirement of President Steve Dobler.

“Across our organization, we continue to take decisive action and execute on our previously announced Business Transformation Plan,” stated Michael Singer, Executive Chairman and Interim CEO of Aurora. “With today’s announcement, we have achieved our stated SG&A run-rate target and expect to operate at approximately $42 million for the first quarter of fiscal 2021. The further cost savings and margin improvement to be realized from our facility rationalization plan is another example of our commitment to deliver greater efficiency throughout the business.”

Mr. Singer further elaborated, “This has not simply been a cost-cutting exercise. We have undertaken a strategic realignment of our operations to protect Aurora’s position as a leader in key global cannabinoid markets, most notably Canada. Both the Canadian facility rationalization and inventory revaluation are expected to improve gross margins and accelerate our ability to generate positive cash flow. We believe that we now have the right balance for the long-term success of Aurora – market leadership, financial discipline, operational excellence, and strong execution. We remain focused on making Aurora a profitable and robust global cannabinoid company.”

The company said that with a new SG&A run-rate of approximately $42 million the company could still support significantly higher levels of revenue in the future without a corresponding level of growth in SG&A.

Consolidation of Production Activities

Aurora said it has initiated a plan to close operations at five facilities over the next two quarters in order to focus production and manufacturing at the Company’s larger scale and highly efficient sites. The company will take a charge of $60 during the fourth quarter in order to make these changes. The affected facilities are the smaller scale facilities, Aurora PrairieAurora MountainAurora Ridge, Aurora Vie and Aurora Eau. Aurora expects that part of the Aurora Vie facility in Quebec will remain operational to allow for the manufacturing of certain higher-margin products.

By the end of fiscal Q2 2021, the company said it intends to consolidate Canadian production and manufacturing at Aurora Sky, Aurora River (EU-GMP certified), Whistler Pemberton, and Polaris. As previously stated, the Aurora Sun production facility has been scaled back to six grow bays and will allow for efficient scale production on an as-needed basis as market demand grows. As part of the transition, the Company also intends to immediately ramp up cannabis production at its Nordic facility in Europe from which it believes can adequately service the European market with EU-GMP certified products.  The company also said it expects to record a charge of up to $140 million in the carrying value of certain inventory, predominantly trim, in order to align inventory on hand with near term expectations for demand.  Approximately 40% of the expected inventory provision relates to the non-cash IFRS fair value adjustment within the inventory.

In addition to the company’s continued focus on production efficiencies and yield improvements, Aurora expects that the production facility closures will be accretive to gross margin as the move to large scale operations is expected to result in a material reduction in per unit cost of goods by Q3 2021. The reduction in inventory carrying value is also expected to be modestly accretive to future gross margins as older, higher-cost inventory is replaced with newer, lower-cost inventory and consequently reflected in gross margins.

Aurora plans to deliver its Q4 2020 full financial results in early September.


Kaitlin DomangueFebruary 13, 2020
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Its time for your Daily Hit of cannabis financial news for February 13th, 2020. 

On the Site

Meet the Weedy Award Finalists 

The founder and Editor of WeedWeek, Alex Halperin, has created the Weedy Awards, with winners being announced on February 28th in Hollywood. Awards will be presented in categories like best grow, the most socially responsible company, the best delivery company, the best edibles, and the people’s choice cannabis celebrity. 

Aurora Cannabis Stock Slides as Revenue Falls

Canadian-based Aurora Cannabis Inc. (NYSE: ACB) saw its shares falling in early trading after the company said that revenues fell in the second quarter of fiscal 2020 ending December 31, 2019. Aurora reported that its total net revenue reported in Canadian dollars fell 26% sequentially to $56 million in the second quarter from $75 million in the first quarter of 2020. It was higher than the 2018’s second quarter, which delivered net revenue of $54 million.

Neptune Wellness Delivers Solid Quarter as Sales Increase

Neptune Wellness Solutions Inc.  (NASDAQ: NEPT) (TSX: NEPT) announced its financial results for its fiscal third-quarter ending December 31, 2019. Total revenues for Neptune were $9.1 million, a sequential increase of $2.6 million or 41% over the second quarter ended September 30, 2019. This was also an increase of $2.6 million or 40% compared to $6,538 for the three-month period ended December 31, 2018. 

In Other News

SLANG Worldwide Partners with Cali Cannabis Cookie Company 

SLANG Worldwide Inc. (CNSX: SLNG), leading cannabis consumer packaged goods company, has partnered with Cookies, a leading California-based cannabis brand. 

Pursuant to the deal, SLANG will bring Cookies’ products to the Oregon market. 

Cresco Labs Expands C-suite

Cresco Labs will name marketer Greg Butler as its first-ever Chief Commercial Officer. Butler has past supported the brand in a CMO capacity, developing the commercial growth strategy for the brand. He has strong plans to develop Cresco’s market in 2020, as well as promoting diversity and social equity in the cannabis space. 


William SumnerMarch 28, 2019
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It’s time for your Daily Hit of cannabis financial news for March 28, 2019.

On the Site

CannTrust Holdings Inc.

Sales are up, but profits are on the decline for CannTrust Holdings Inc. (NYSE: CTST) as the company releases their financial results for the fourth quarter and year ending on December 31, 2018.

SAFE Banking Act Advances As Committee Votes For Approval

The House Financial Services Committee voted 45 to 15 to advance the Secure and Fair Enforcement (SAFE) Banking Act. Currently, Federal law prohibits banks from providing banking services to cannabis companies since cannabis is illegal despite some states legalizing cannabis.

In Other News

MJIC Inc.

MJIC Inc. announced today that it would change its name to ManifestSeven. The company is rebranding itself as part of its preparation to go public in Canada in the first half of 2019. “Our new name – ManifestSeven – speaks to the evolution of our company and the destiny of legal, compliant cannabis in the United States,” said Sturges Karban, ManifestSeven’s Chief Executive Officer and Director. “As we prepare to enter the public markets, we are already seamlessly integrating fully compliant operations across California, creating the cannabis industry’s first omnichannel distribution and retail superhighway. Our name change speaks to our ambition to continue growing in California and other markets as they legalize across other states.”

Aurora Cannabis Inc.

Aurora Cannabis Inc. (NYSE: ACB) announced that the company has added product information numbers (PINs) to 78 medical cannabis products. The PINs are meant to help track insurance coverage for medical cannabis patients. Patients hoping to submit health insurance claims to third party providers will be able to specifically identify the products they use, which in turn will theoretically help speed up the coverage process.

Flower One Holdings Inc.

Flower One Holdings Inc.  (CSE: FONE) announced that it has closed its previously announced public offering of unsecured convertible debenture units of the company. Issuing 50,000 units as a priced of $1,000, the company raised $50 million. The net proceeds of the offering will go towards working capital, general corporate purposes, finishing the development and construction of a production facility in Nevada, and the payment of outstanding notes.

Newstrike Brands Ltd.

Newstrike Brands Ltd. (TSXV: HIP) announced that it will invest $5 million in Green Tank Technologies, a manufacturer of cannabis vaporizer hardware and technology. “. Our strategic investment in Green Tank puts us in a strong position to become a preferred supplier of end-to-end vape solutions to the adult use recreational market,” said Mark E. Burton, Chief Strategy Officer, Newstrike Brands.


William SumnerOctober 26, 2018
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5min9240

It’s time for your Daily Hit of cannabis financial news for October 25, 2018.

On the Site

MedMen Enterprises

MedMen Enterprises (MMNFF) reported fourth quarter revenues of $20.6 million, an increase of 1,317% over last year’s $1.5 million and a 44% sequential increase over the third quarter revenue of $14.3 million. The jump was attributed to the number of stores that came online during the quarter. However, operating expenses for the fourth quarter, including SG&A, was $72.6 million.

Canadian Cannabis Companies Report Record Sales Post-Legalization

It has been a little more than a week since recreational cannabis sales were launched in Canada, and already the policy has become a big hit. Millions of dollars in cannabis sales have already been recorded, and in the province of British Columbia alone there have been more than 21,000 transactions.

Cannabis Companies Are Navigating Trump’s Tariffs

Medical Marijuana, Inc. (OTC: MJNA) CEO Dr. Stuart Titus tells Green Market Report how his company has had to navigate the rapidly changing landscape when it comes to President Trump’s approach to international trade and tariffs.

In Other News

Aurora Cannabis Inc.

Aurora Cannabis Inc. (ACB) announced that the Polish Ministry of Health has given the company approval to import its first shipment of medical cannabis, which is expected to occur over the next several days. Aurora Deutschland GmbH will ship the product to a hospital and a pain treatment in Warsaw. “Becoming the first company to supply cannabis to Poland is validation of Aurora’s ability to do business in international markets with high barriers to entry,” said Neil Belot, Chief Global Business Development Officer for Aurora. “This is an important milestone for patient access in Poland…”

Namaste Technologies Inc.

Namaste Technologies Inc.  (N) today closed its previously announced bough deal short form prospectus offering, which included the full exercise of the over-allotment option. In total, 17.25 million units of the company were sold at a price of $3.00 per unit; generating $51.75 million in funding. Each unit consisted of one common share and three quarters of one common share purchases warrant. Eight Capital and Canaccord Genuity Corp. acted as co-lead underwriters and joint book runners. The underwriters for the deal received a 6% commission of the gross proceeds. The proceeds from the offering will be used by the company to general working capital; as well as inventory and supplies, capital improvements, personnel and facility operations, etc.

4Front Holdings, LLC

4Front Holdings, LLC announced that it has closed a private placement of equity securities. Initially seeking $15 million, the company increased the initial amount to $31 million due to increased demand. Eight Capital acted as the lead underwriter and bookrunner. The proceeds of the offering will go towards the funding of ongoing investments, the buildout of its multiple Mission-branded dispensaries and cultivation facilities, and for merger and acquisition opportunities. “The success of the Offering demonstrates that our message of pursuing prudent yet aggressive growth is resonating with investors,” said Josh Rosen, 4Front CEO and co-founder. “I’m particularly excited by the caliber of our new investors, as well as the broad participation in the Offering by our existing investors.”


William SumnerMay 10, 2018
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This is your Daily Hit of cannabis news for May 10, 2018:

On The Site

Opinion: Overwhelming Public Support For Marijuana Doesn’t Mean Legalization

In recent days, it seems the dam has broken and a string of positive developments have materialized for marijuana reformers—welcome news to the legal marijuana industry, the voters who supported it, and the local communities relying on it for new tax revenues. But given the structure of anticipated reforms—and the history of the implementation of prior reforms—the path ahead is unlikely to be smooth. Continue Reading…

In Other News

Aurora Cannabis Inc.

Following a less than stellar release of its quarterly financial statements, Aurora Cannabis Inc. (ACB) has announced that, following escrow release conditions, the company has acquired 2.3 million shares in Alcanna Inc. (CLIQ), formerly known as Liquor Stories NA, to the tune of $34.6 million. Aurora now holds 9.2 million shares in Alcanna, which represents approximately 25% ownership in the company (on a non-diluted basis). Alcanna will use the proceeds to establish a chain of adult use cannabis dispensaries, approximately 50 stores in total.

Liberty Health Sciences Inc.

Liberty Health Sciences Inc. announced that is has closed its short term prospectus offering on a bought deal basis, which includes the full exercise of the underwriters over-allotment option. In total, 23,55,875 units of the company were sold at $0.90 per unit, for approximately $23 million. A unit of the company consists of one common share and one common share purchase warrant, which entitles the holder to purchase one common share of the company until May 10, 2020 at a price of $1.10 per share. The company will use the proceeds from the offering to partially fund the purchase of a 75% ownership stake William Noyes Webster Foundation, Inc.

Namaste Technologies

Namaste Technologies Inc. (N), announced that, in accordance with its previously announced letter of intent, the company has signed a share purchase agreement to acquire 51% of the outstanding shares with 2624078 Ontario Inc., also known as Infinite Labz. As Infinite Labz seeks to become a Health Canada Licensed Producer and Dealer of medical cannabis oil, Namaste has agreed to finance the construction of a production facility for the company in Etobicoke, Ontario. Once construction and licensing is complete, Infiinte Labz will sell low cost medical cannabis oils and extracts through Namaste’s subsidiary, Cannmart Inc. “We are very pleased to have entered into a definitive agreement as we believe that the facility at Infinite Labz can be instrumental in allowing Namaste to participate in the recreational market,”stated Namaste President and CEO, Sean Dollinger.


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