Aurora Cannabis shares shoot up on positive quarterly numbers

Our roundup of cannabis stocks shows some improvement for Canopy Growth Corporation after a shakeup in the corporate office, but it was humdrum week for Tilray, Cronos Group, and Aphria.

After more than a year of bad news, Aurora Cannabis Inc. share holders are finally seeing some sunshine.

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This week finally brought good news to investors in Aurora Cannabis Inc. following a very challenging year.

Its third-quarter financial results, released on Thursday (May 14), caused the share price rise to more than 30 percent in after-hours trading.

Then on Friday (May 15) after the bell rang to open markets, the share price jumped another $3.66, or 66.85 percent, to close the week at $15.35.

This came after the Edmonton-based licensed producer announced an 18 percent increase in net revenue over the previous quarter, rising to $78.4 million.

Consumer buying was especially strong, jumping 24 percent on the quarter to reach $41.5 million. Net revenue for medical cannabis rose by 13.5 percent. And the production price per gram in the third quarter was a very competitive 85 cents.

Aurora still has a long way to go before reaching its 52-week high of $146.28 ($12,19 before a reverse 12:1 stock split on Monday), It had to dilute the shares to retain its listing on the New York Stock Exchange.

According to Aurora’s recent results, it improved its cash position in the third quarter to $230.2 million. It also burned through 43 percent less cash in the third quarter compared to the previous quarter.

“I am incredibly proud of the Aurora team for working through these challenging times in order to maintain uninterrupted operations at all of our production facilities and ensure we continue to meet the needs of our patients and consumers,” executive chairman and interim CEO Michael Singer said when the results were released.

“I am also pleased that our third quarter 2020 financial results were in-line with our expectations, and that we remain firmly on track with the cost-savings and capex goals we detailed during our business transformation plan in February 2020.”

In other news involving the Canadian cannabis sector this week, Canopy Growth Corp. parted ways with two executives: chief operating officer Andre Fernandez and chief commercial officer Dave Bigioni.

This came in the wake of former Constellation Brands chief financial officer David Klein becoming Canopy Growth’s CEO earlier this year. Constellation is in a position to own more than 55 percent of the Smith Falls, Ontario–based licensed producer if it exercises all of its warrants.

Canopy Growth ended a roller-coaster week up 5.2 percent to close at $22.33 on Friday. It fell to $18.46 on May 14 before rallying back over the next two days.

Vancouver-based Zenabis Global Inc. saw its shares rise more than 36 percent on Friday to close at 75 cents in Toronto. This occurred on the same day it released unaudited financial statements showing a 72 percent jump in first-quarter net revenue to $19.9 million compared to the same period a year ago.

Zenabis Global’s quarterly comprehensive loss of $1.6 million was far lower than the $3.9-million net loss posted in the first quarter of 2019. It has cannabis operations on the east and west coasts of Canada.

The company anticipates producing 30,000 PAX Era vape cartridges per month, starting in May.

In addition, Zenabis Global is working with HYTN Beverages Inc. on a line of cannabis-infused sparkling water, though this has been delayed due to COVID-19 travel restrictions.

Meanwhile, it was a forgettable week for investors in Nanaimo-based Tilray Inc., which released its quarterly results on May 11. The stock price fell nearly three percent over five days, closing on Friday at US$7.77, following news of a quarterly net loss of $184.1 million—or $1.73 per share.

Cronos Group Inc. was up 2.5 percent on the week to close at $7.75. Shares in Aphria Inc. fell 2.1 percent from Monday to Friday to close at $4.70.

And Hexo Corp. shares were up six percent on the week to close at US$0.53. Like Aurora, Hexo is another licensed Canadian cannabis producer that’s been warned by the New York Stock Exchange.

That’s because Hexo is not in compliance with the NYSE’s listing standard of having a US$1 share price.

On May 13, the Ottawa-based company notified investors that it has six months from April 7 to have an average closing price of at least US$1 per share on the last day of any calendar month.

Hexo must also maintain a concurrent 30-day trading average closing price at US$1 over the next six months or else it will be delisted in New York.

Charlie Smith

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

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