Aurora Cannabis names new CEO, to book up to $1.8 billion in charges
Aurora Cannabis Inc. on Tuesday named Miguel Martin its chief executive officer, tasking the insider to turn around the troubled pot producer, and said it would book up to $ 1.8 billion in restructuring charges.
Toronto- listed shares of the company closed 10.8-percent lower at $ 9.92 as its fourth- quarter net revenue forecast of $70 million to $72 million came below analysts’ average estimate of $ 76.8 million, according to Refinitiv IBES data.
For most weed producers in Canada, which legalized recreational cannabis in October 2018, profits have proven elusive due to fewer- than- expected retail stores, cheaper rates on the black market and slow overseas growth.
The COVID-19 pandemic has also made it harder for the cash- strapped industry to get investor dollars and forced companies to shut stores. In response, Aurora has laid off hundreds of employees, shut five facilities and amended its loan agreements.
The company said on Tuesday Martin would replace interim CEO Michael Singer, who took the helm after the exit of founder and chief executive Terry Booth in February. Singer will stay on as executive chairman.
To rein in costs and reach profitability, the Edmonton-based company also ended its partnership with mixed martial arts franchise Ultimate Fighting Championship.
“Aurora wants to portray having a plan, but we are not sure a concrete action agenda has yet been developed,” said Bill Kirk of MKM Partners.
David Kideckel, an analyst at ATB Capital Markets, said he remains cautious on the stock in the near term, but recognizes the company’s efforts to steer the ship in the right direction after past missteps. Aurora is slated to report its fourth- quarter financial results after the close of markets on Sept. 22.