During the past trading week (February 3 to 7), a Canadian cannabis producer lost its longtime leader and announced cuts to improve profitability.
A battered cannabis firm 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 loses CEO, joins Tilray in cutting 10 percent of staff
The Thursday (February 6) announcement states that Aurora’s executive chairman, Michael Singer, will succeed Booth as interim CEO effective immediately, though Booth will still 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 market close on Thursday, Singer said the change has 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 is 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 the 2020 fiscal year amid a series of disappointing quarterly results.
Aurora expects impairment charges on certain intangible property, plants and equipment to cost from C$190 million to C$225 million. There will also be a goodwill writedown of up to C$775 million.
The company isn’t expecting much growth when it comes to revenue in the 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 the purchasing patterns of provincial distributors and shifting consumer preferences 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 is 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’s share price has fallen 17.4 percent from market close on Thursday to market open on Friday (February 7). 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 marijuana 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
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 will be allowed to carry out a proposed securities class action against the firm.
On Monday (February 3), 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. The breach was revealed last summer.
More recently, in December, CannTrust was told it was on the brink of being delisted from the New York Stock Exchange as its share price slipped below the US$1 threshold that 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 on Friday, it sat at US$0.93.
The deal’s end has been a long time coming as it was first announced in May of 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 Partners’ assets, Curaleaf now has 53 dispensaries across the US in its portfolio.
Innovative Industrial Properties (NYSE:IIPR) announced a 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.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
Thoughtful Brands, Inc. (CSE:TBI)(FWB:1WZ1)(OTCQB:PEMTF) (the “Company” or “Thoughtful Brands“), an eCommerce technology company that researches, develops, markets, and distributes natural health products through various brands in North America and Europe, announces that it intends to consolidate its issued and outstanding common shares (“Shares”) at a ratio of ten (10) pre-consolidated Shares to one (1) post-consolidation Share (the “Consolidation
The Company currently has 389,274,701 Shares issued and outstanding. Following the Consolidation there will be approximately 38,927,470 Shares issued and outstanding. No fractional Shares will be issued and any fractions of a Share will be rounded down to the nearest whole number of Shares. The exercise or conversion price and the number of Shares issuable under any of the Company’s outstanding convertible securities will be proportionately adjusted upon Consolidation.
In the evolving rush of mergers and acquisitions (M&A) in the Canadian cannabis market, Canopy Growth (NASDAQ:CGC,TSX:WEED) announced it will acquire The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) in a deal worth approximately C$435 million.
Meanwhile, a cannabis operator in the US confirmed this week that it will receive a financial boost from a partner to solidify its position in the burgeoning Pennsylvania state market.
The Board of Directors of Aphria Unanimously Recommends Shareholders Vote “For” the Arrangement
Aphria to Host Special Meeting of Shareholders on Wednesday, April 14, 2021 to Approve Proposed Aphria-Tilray Business Combination
Love Hemp Group PLC (AQSE: LIFE) (OTCQB: WRHLF), one of the UK’s leading CBD and Hemp product suppliers, announces that as part of the equity fundraise announced yesterday, Antony Calamita and Andrew Male, Directors of the Company, subscribed for 285,714 Ordinary Shares and 1,428,571 Ordinary Shares respectively. The subscriptions are at a price of 3.5 pence per ordinary share for a total of £60,000. Following these subscriptions, Antony Calamita is now interested in 54,385,714 Ordinary Shares, representing 8.61% of the Company’s share capital as increased by the fundraising, and Andrew Male is now interested in 6,138,196 Ordinary Shares, representing 0.97% of the Company’s issued share capital as increased by the fundraising
Further, the timetable for receipt of applications under the Broker Option, which was also announced yesterday, has been extended until 5:00 pm 9 April 2021 to capture additional interest which was unable to be completed yesterday.
Revive Therapeutics Ltd. (“Revive” or the “Company”) (CSE: RVV, USA: RVVTF), a specialty life sciences company focused on the research and development of therapeutics for medical needs and rare disorders, would like to provide the following dial-in information for the Company’s upcoming Annual and Special Meeting (the “Meeting”) scheduled to be held at 11:00 a.m. Eastern Daylight Time on April 12, 2021. Shareholders and proxyholders may access the Meeting via teleconference by dialing 647-723-3984 or 1-866-365-4406 from Canada or the United States, then entering participation code “8487744” followed by the pound (“#”) sign.
In consideration of the COVID-19 pandemic and the recent restrictions imposed by the Ontario Provincial Government, shareholders and proxyholders will only be able to attend the Meeting via teleconference and will not be permitted to attend the Meeting in person at the address provided on the Notice of Annual and Special Meeting of Shareholders.