Aurora Cannabis shares plunge by 29 percent; other weed stocks also decline

Canopy Growth Corp. is now worth nine times as much as the Edmonton-based weed company.

Aurora Cannabis Aurora Aurora shares weed company

Aurora Cannabis's headquarters and this greenhouse facility are in Edmonton. Photo by Khoshhat

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This was a grim day on the markets, but few shareholders were hammered as badly as those with a stake in Aurora Cannabis. Today, the stock price fell 29.09 percent to close at $6.90 on the Toronto Stock Exchange. In contrast, a year ago Aurora shares traded for more than $60.

As a result of today’s slide, the company is now only worth $778.9 million.

Aurora shares plummeted following release of Aurora’s dismal fourth-quarter and year-end results after stock markets closed on Tuesday (September 22).

Aurora Cannabis disclosed total quarterly revenue of $72.1 million, down five percent from the previous quarter.

Of that, $35.3 million came from the consumer cannabis sector. The company generated another $32.2 million from medical cannabis.

But the figure that really caught investors’ attention was the quarterly loss of $1.86 billion.

As a result, that pushed Aurora’s annual net loss to $3.31 billion. This far exceeds the $300.5-million loss for the fiscal year ending June 30, 2019.

A fixed-asset impairment charge of $86.5 million and a $135-million charge on inventory contributed to the shortfall.

These impairment charges also took a toll on Aurora shares.

Aurora explained that effective April 1, it has changed its accounting policy regarding the inventory costing of byproducts, including trim from dried cannabis.

Rout of Aurora Cannabis shares exceeds other weed stock declines

Investors in Canada’s most valuable cannabis company also suffered sizable losses. Shares in Canopy Growth Corp. fell 8.61 percent today. They closed at $19.43 in Toronto.

That left the Smith Falls company with a market value of $7.21 billion.

As a result, Canopy Growth is now worth nine times as much as the value of all of the outstanding Aurora shares.

Meanwhile, Nanaimo-based Tilray endured a tough day on NASDAQ as its shares plunged by 12.4 percent. They’re now trading at US$4.70. The company’s market cap stands at US$597.18 million.

Another big weed company, Cronos Group, didn’t fare quite as badly on the Toronto Stock Exchange. The company’s shares dipped by 4.11 percent to close at $6.76.

Cronos is worth $2.37 billion—three times that of Aurora Cannabis.

Among others in the sector: Hexo shares dropped by 6.48 percent; Aphria shares declined by 1.5 percent; and U.S.-based Curaleaf Holdings was down 0.59 percent.

In comparison, the tremendous drop in the price of Aurora shares was truly extraordinary.

Charlie Smith

I'm the editor of the Georgia Straight newspaper in Vancouver, as well as a CannCentral contributor.

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