CannabisNews420.com – Cannabis/Marijuana Industry News
During the past trading week (February 3 to 7), a Canadian cannabis producer lost its long-time leader and announced cuts to improve profitability alongside another large player in the sector.
A battered cannabis company took another major hit after a superior court allowed for a class-action lawsuit to be carried through, and a multimillion-dollar deal was finally closed after months of uncertainty.
Here’s a closer look at some of the biggest cannabis news over the week.
Aurora CEO retires, joins Tilray in cutting 10 percent of staff
Another well-known name in the Canadian cannabis industry has fallen as the former CEO of Aurora Cannabis (NYSE:ACB,TSX:ACB) Terry Booth declared his retirement from the company after seven years at the helm.
The Thursday (February 6) announcement said that Aurora’s executive chairman, Michael Singer, would succeed Booth as interim CEO effective immediately, though Booth will serve on the board.
Aurora’s board of directors is also welcoming two new players: Lance Friedmann and Michael Detlefsen.
In a call with analysts after the market close on Thursday, Singer said the change had Booth’s full support and that the former CEO “recognizes that the next leg of our journey will be best led by a CEO with a different skill set.”
Aurora’s leadership change comes just a day after BNN Bloomberg reported the Alberta-based cannabis producer was planning to cut its workforce of about 3,400 employees by 10 percent.
With the announcement of Booth’s departure, the company also confirmed plans to bring its capital expenditures below C$100 million for the second half of fiscal 2020 amid a series of disappointing quarterly results.
Aurora expects impairment charges on certain intangible property, plant and equipment to cost anywhere from C$190 million to C$225 million. There will also be a goodwill write-down of up to C$775 million.
The company isn’t expecting, however, much growth when it comes to revenue in its upcoming quarter. Due to industry headwinds, including a dip in international revenues and low bulk sales, the firm estimates little to no quarter-over-quarter change in Q2 2020, with revenue projections of C$62 million to C$66 million.
Singer also blamed a slow rollout of retail stores in key provinces, changes in purchasing patterns of provincial distributors and shifting consumer preferences in dry flower on the firm’s less-than-impressive gains.
“We believe our succession plan, expansion of the board and the rationalization of our business will make Aurora much stronger and more focused than ever before,” Singer said.
Along with Aurora, Tilray (NASDAQ:TLRY) also announced plans to downsize its staff to reduce costs.
On Tuesday (February 4), the British Columbia-based company told news outlets that it was cutting 10 percent of its staff to reach its profitability goals.
In a statement to the Financial Post, Brendan Kennedy, CEO of Tilray, said the decision to cut its staff of over 1,400 employees wasn’t taken lightly.
“By reducing headcount and cost, Tilray will be better positioned to achieve profitability,” Kennedy said.
Since the announcement, Aurora has fallen 17.4 percent from market close on Thursday to market open on Friday (February 7), while Tilray fared a bit better, dropping only 1.8 percent from the start of the trading session on Tuesday to market open on Friday.
Aurora and Tilray’s woes are just some in a recent group of losses and departures that have plagued the industry in the past weeks.
Both Sundial Growers (NASDAQ:SNDL) and MedMen Enterprises (CSE:MMEN,OTCQX:MMNFF) lost their respective leaders last week. Earlier in the year, TerrAscend (CSE:TER,OTCQX:TRSSF) and The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) let go of their CEOs as well.
CannTrust faces class-action lawsuit on illegal growing debacle
Beleaguered cannabis firm CannTrust Holdings (NYSE:CTST,TSX:TRST) is up against its newest challenge after the Ontario Superior Court of Justice confirmed that a team of Ontario-based law firms was allowed to carry out a proposed securities class action against the firm.
On Monday, the law firms said the action was in connection to CannTrust’s failure to disclose the non-compliant cultivation of cannabis in some of its facilities that was revealed last summer.
In the fallout, the firm lost some of its key members, including former CEO Peter Aceto and former chairman Eric Paul, and had its cultivation and production license suspended.
More recently, in December, CannTrust was told it was on the brink of being delisted from the New York Stock Exchange (NYSE) as its share price slipped below the US$1 threshold the exchange requires to remain an active lister.
CannTrust has lost a stunning 75 percent of its value in New York since the news of its illegal growing operations broke. As of 2:08 p.m. EST, prices sit at US$0.93.
Curaleaf Holdings (CSE:CURA,OTCQX:CURLF) was one firm that got a win this past week when it closed its acquisition of Cura Partners, the owners of the Select brand.
The deal’s end has been a long time coming as it was first announced in May last year. Curaleaf’s deal did spend some time under the eye of antitrust regulators due to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
With Cura Partner’s assets, Curaleaf now has 53 dispensaries across the US in its portfolio.
The transaction was originally valued at US$948.8 million, but the firm told investors in October that it was amending the terms of the deal due to unfavourable market conditions.
Innovative Industrial Properties (NYSE:IIPR) announced a new partnership with Illinois-based Green Thumb Industries (CSE:GTII,OTCQX:GTBIF), starting with a sale leaseback deal for a processing facility in Ohio.
Another real estate investor, the energy and transportation-focused Power REIT (NYSEAMERICAN:PW), stepped into the cannabis space after purchasing two marijuana greenhouse properties in Southern Colorado for US$3.75 million.
While Power was moving into cannabis, marijuana producer Australis Capital (CSE:AUSA,OTC:AUSAF) branched out into fintech with the acquisition of Paytron, a payment service provider that specializes in secure processing and point-of-sale hardware, among other technologies.
Also in the US, iAnthus Capital Holdings (CSE:IAN,OTCQX:ITHUF) got the green light to begin its operations in New Jersey at its Pleasantville cultivation campus.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
The post Cannabis Weekly Round-Up: Aurora Loses CEO, Cuts Workforce appeared first on Investing News Network.