Who are Aurora Cannabis?
Aurora Cannabis Inc. is a Canadian licensed cannabis production company. Founded in 2006 by four entrepreneurs, Aurora Cannabis now boasts eight production facilities, five sales licenses and operations in 24 countries spanning over three continents including North America, Europe and Australia.
Aurora Cannabis is the second largest cannabis production company on the globe in terms of market capitalization -- the first being Canopy Growth Corporation. The company trades on the Toronto Stock Exchange under ACB. It also trades on the New York Stock Exchange (NYSE) under the same acronym.
Aurora Cannabis (ACB) stocks have rapidly declined from December 2018 till August 2019. Source
Why is Aurora Cannabis in the News So Much?
Aurora Cannabis is no stranger to media attention. In the last few years, the cannabis production company has featured in the press for two predominant reasons;
- The buying/acquisition of competing companies and;
- The rise and fall of the company’s stocks.
The Buying/Acquisition of Competing Companies
Aurora Cannabis has bought and acquired several subsidiaries during its lifespan as a company. Its subsidiaries include;
- Pedianos GmbH -- Pedianos is a wholesale importing, exporting and distribution company based in Berlin, Germany. The company services several countries with cannabis flower sourced from Canada and The Netherlands.
- CanniMed -- In March 2018, Aurora Cannabis acquired CanniMed, a process which had begun the previous year on the 13th of November. When Aurora Cannabis had indicated its interest in acquiring CanniMed, the company’s board rejected the offer and proposed an alternate and mutually beneficial merger with Newstrike, a recreational cannabis company. In retaliation, Aurora launched a hostile takeover bid on Cannimed shareholders, which became the first hostile takeover bid in Canada’s Cannabis industry. In the end, Aurora Cannabis acquired CanniMed for $1.1 billion.
- MedReleaf -- Aurora’s acquisition of MedReleaf was a much simpler process in comparison to that of CanniMed. In May 2018, both companies announced a friendly takeover where MedReleaf would be taken over by CanniMed in a $3.2 billion stock deal. Though the deal still requires approval from MedReleaf’s shareholders and the government, it is likely all requirements will be met in due time.
The Rise and Fall of Cannabis Stocks
Aurora Cannabis currently trades in two stock markets; the Toronto Stock Exchange (ACB.TO or TO:ACB) and the New York Stock Exchange (ACB.NYSE or NYSE:ACB). Given the volatile nature of the stock market, its affairs are frequently monitored by business and industry experts and analysts.
In the past few months, Aurora Cannabis Stocks -- particularly NYSE:ACB -- have performed poorly. In recent financial reports, it has been revealed that the company has garnered a loss, much to the chagrin of investors. It has also been revealed that the next time the company will turn a profit may be in 2020. As reported by The Motley Fool, losses came up to $11 million within the last quarter.
According to analysts, the hefty decline witnessed in Aurora’s stocks can be attributed to the fact that the market is not interested in cannabis stocks at the moment. Despite its size and reputation, Aurora Cannabis has done very little to impress its current and potential investors.
What Could Be The Future of Aurora Cannabis?
The future of Aurora Cannabis is uncertain. The cannabis market, particularly the Canadian Market, has witnessed a steady rise and fall since its legalisation. With a little over a year under its belt, there is still heavy uncertainty regarding the supply and distribution of cannabis and cannabis-based products within the country and the countries to which Canada and Aurora Cannabis export these products.
Aurora’s efforts to please investors backfired heavily when it released an unaudited growth report which placed the company’s performance this quarter at $43 million, $11 million more than its actual performance. With this plan backfiring, investors are now wary about what aspects of business they can fully entrust the company with. If audits can be falsified at such an early stage, there is no telling what lengths Aurora Cannabis will go to in order to secure investors.
With the cannabis market set to boom as more countries make their products legal, Aurora still has time to grow. It remains to be seen if the company can keep its head above water long enough to see that happen.