Aurora Cannabis is in trouble…

It’s still one of the “100 Most Popular” stocks on Robinhood, but Aurora Cannabis Inc. (NYSE: ACB) is in trouble.

In the last 52 weeks, the ACB stock price traded as high as $10.32 per share.

Now, it’s trading near its lows of $0.63.

And while Aurora was never in any of our model portfolios, we know a lot of our members own ACB and want to know what’s going to happen next.

Today, we’re going to take a look at how the company got in this position, as well as what shareholders need to do right now.

What Happened to Aurora

Aurora had a lot of promise coming out of the gate.

It was aggressively investing for growth and, by 2018, had become the second-largest cannabis company by market cap.

By 2019, that narrative completely changed. Oversupply in Canada’s medical marijuana market and a lack of dispensaries throughout Canada created a massive bottleneck for the entire industry. Aurora simply couldn’t sell enough products and, without a steady revenue stream, its large, strategic investments became major drags on the bottom line.

Aurora’s most recent earnings report did nothing to inspire buyers, either.

Executives reported a total net loss of $981 million on its February call. On top of that, Aurora announced it would cut its staff by 500 positions and reduced its forward revenue guidance by 31%.

The “Cannabis 2.0” movement in Canada, which opened the door for edible and vape sales, was expected to significantly bolster Aurora’s revenue last year. But domestic medical sales proved to be flat year-over-year at best.

International sales are struggling, too. In-roads to Europe are a growth mechanism for many cannabis companies, but Aurora continues to struggle to market its products and convert people into customers in Europe.

Aurora’s Identity Crisis

Ultimately, the root of Aurora’s problems can be chalked up to a lack of identity and poor positioning.

Aurora is a medical marijuana producer with no apparent plans to pivot towards recreational products anytime soon. Its product line is robust, but the strains and oils it offers, while tested and vetted as required by law, are essentially the same strains, tinctures and oils folks use recreationally.

So, those products can be purchased at any dispensary.

Source: https://shop.auroramj.com/shop
Click to Enlarge

And because it hasn’t formed a clear identity, Aurora operates much more like a nutraceutical company than a biotech firm. For example, GW Pharmaceuticals (Nasdaq: GWPH), maker of Epidiolex, the first FDA-approved cannabis-derived drug on the market.

Pivoting to recreational sales could help with the company’s identity problem, but there is even more competition in that sector than ever before.

For the year, the company is down over 66%, as of midday Monday, March 16. One-year losses are even more acute at over 92%.

Source: StockCharts.com
Click to Enlarge

It’s tempting to take a contrarian mindset when analyzing Aurora shares, but there are too many headwinds afflicting this company.

And there’s a big, looming problem.

The Potential to Delist

As the stock price keeps dropping, there is the chance Aurora will delist from the NYSE. That means it does not meet the requirements needed to be traded on the major exchange.

When that happens, trading will have to occur in the OTC markets.

That delisting will shake the confidence of many investors, making it harder for you to sell your shares.

If you still have any skin in the game with Aurora, now is the time to bail, cut your losses, and reposition that money elsewhere into opportunities with much better profit potential – opportunities like special-purpose acquisition companies (SPACs), top-tier companies with beaten down stock prices, and Reg CF deals.

All of which are being sent to members in NICI Membership, Cannabis IPO Insider, and Cannabis Venture Syndicate.


Comments

30 responses to “A Warning for Aurora Cannabis Owners”

    • Ted it looks like it’s going to be delisted. I read a report on another site March 3rd that said sell; and cut your losses. I hope that other ones rebound nicely. My defiant hold is Charlotte’s Web holdings.

    • Yes!!! average down now if you need too since the price is really nice and be patient. There is a lot of competition routing against this company I have seen it for over a year now.

    • About delisting, 90% of cannabis stocks are OTC (over the counter) stocks, not listed on US exchanges because of their federal illegal status. I purchased Aurora as an OTC stock before it was listed with a 400% profit and free trade. Delisting will only make it less accessible to traditional traders, who avoid cannabis stocks and not cannabis traders, who trade OTC and Canadian exchanges. All cannabis stocks will rebound when all this ends. Just don’t expect it to rebound as high as it was before. If your positioned too high in price, then read my other post.
      Have a great trade.
      Waltrek

      • I agree with your strategy in your previous post. I did that before the 1:12 reverse split. If you want to do it now it will cost you much more. Before the split shares were $1.00+ . Now they are $14. any suggestions on that reverse split? I bought ACB when it was $9.50 in 2018 and leveraged it with more shares @ $1.95 bringing cost to $4.25/share.
        Now I have 83 shares @ $49.88/share. Another 117 @ $14/share averages to $28.89. I feel that ACB had a much better shot at reaching $4.25 than ever getting close to $50

  1. I sold all my shares in Aurora Cannabis, I then purchased more shares in Charlotte’s Web I hope this was the better choice in companies?

  2. I dumped Aurora a few months ago but what can you tell us about acreage ?
    What is happening with the acquisition?

  3. I bailed out 3 weeks ago, and I am sure happy with that move. Thanks for all the inside scoop NICI. Please continue. Joe B.

  4. I’m sorry but I have to be a contrarian on this. This is no time to sell any stock. Stocks go up and stocks go down, that’s just what stocks do. If you sell at what ever loss your at now, your not cutting your losses, your locking in your losses. No matter how bad it looks you don’t lose money until your sell. All stocks will recover when this is over, both good and bad. I love the NICI reports and that’s why I’m here. This report tells me I may have to adjust my long term holding plans but not to sell at a loss in this current market. It’s time to buy more to better your position so when it does recover it won’t have to go up as far to sell at a profit. If you sell now you already lost more than half your investment and if you invest it in another stock, that stock will have to go far enough to cover that loss before your in profit. Sure it looks better on paper and it might make you feel better. But when all the stocks recover, if you hold the one and purchase the other they will both increase in value and you take no losses. I’ve been trading cannabis stocks sense 2017 Aurora being one of my first. I made a 400% profit and sold half for a free trade plus 100% profit. But I also purchased a stock that went to a 99% loss and took a 100% profit and it only recovered by 25% of that loss. And over the years I’ve done this with several losing stocks. To this day I haven’t taken any losses. NONE! I now have over 50 different stocks with anywhere between 5 and 150,000 shares and I started with only $1500.00. If you look at the long term charts sense 2017 of almost any cannabis stock you will notice that the whole industry has been a bear market sense the rally of Jan 2018. That means the peaks keep getting lower and lower. But this is normal because they are preparing for the explosion. They will recover and they will go down again. So buy, buy ,buy as much as you can when they are down. Buy ones you have to better your position and sell half when they’re in profit to get some cash out for when they go back down. Patience is the key. But wait until they’re down as far as they will go. Buy more when they’re red and sell 1/2 when they’re green!!! But use the charts, 1 year charts, they will tell you when. I wrote a book to remind me of my plan when it gets rough like now with this crash. And I’ve written about this on the NICI boards. The goal is long term, buy as much good stock you can at the lowest positions you can and prepare for the explosion!!!
    HAVE A GREAT TRADE!!!
    WALTREK

    • I love your words of wisdom Waltrek, being new to this its comforting to know that buying cannabis stocks at cents on the dollar will pay off down the road.

    • Do your theories pertain to a stock like Aurora when the company sounds so bleak? Regardless of the down swing in the market, as a good time to buy? If this is a loser now, how can we think it will ever regain anything?

    • OK, here’s an update. Look at a three to six month chart to see what I’m showing you. I have 100 shares @ $2.0497. I bought 400 shares @ $.65. This moves my CBS (cost basis per share) to $.9299. On March 27 2020 the price went to $1.13. At that point could sell all 500 shares at say $1.10 and sell at a profit instead of a loss. The total cost of the trade is $464.97 and the total sell would be $550.00, with a profit of $85.03. Did I? No, I expect to make more later. But It would be a profitable transaction. I’ve done this so many times I loss count. I still have not takin’ any losses. It could take some time for some stocks. But you have all the time you need. The stock is yours till you sell. Plus, I like to sell only half my position so I pull half my money out and still have half my shares, more than I started (250) @ a better price ($.92.99) so when it does go up I still make profit. And I can still buy the other stock. That’s more shares at a better price with possibility for future profits. To me that’s better than selling it a loss, buying a stock I don’t know with half the money I started with and wait for it to go up far enough to cover the losses from selling at a loss. And what if that new stock goes down, will I have to sell it at a loss too. Plus once the price hits bottom it can only go up. Patience is all it takes. Going from $1500.00 to $12500.00 in three years I think is good growth considering I’m always in the red. I think that’s doubling my invested amount each year. You see I sell the green and buy the red!! When you sell the green all that’s left is the red! And of course buy new stocks when the charts are right when I can.
      Have a great trade!
      Waltrek

  5. My husband told me to sell all my cannabis stocks, but I got them all on the “watch list” we keep IIPR, we were doing so good with that one until the virus hit! But we kept it only have two but will buy more! Looking forward to the future of Cannabis (Someday).

  6. I bought 3000 Shares of IONKF while it was on its way down. I reasoned that it may go up (insert one of a hundred excuses why), wow, that was foolish. Today it trades at $.007 a share. That 3000 shares that I expected to go up is now valued at $21.00. I lost $305.55 on that one play.
    If you can see how foolish that was, then the answer to the above questions is in this my Comment response. Hoping for the impossible could be costly.
    Also, many commenters ask a question as to what to do with your personal investment situation. Nici is not a License Broker so this prevents them from answering your personal investment questions. If they were a licensed Broker, they would not provide an answer for free.

    • You can’t say you lost $300 until you actually sell it. If it is a good company, then be patient and wait. You can’t go by short term losses, especially in this volatile market.

    • I’m going to give you something for free! But first I have to say, “What ever possessed you to buy that stock?” First, it produces vape pins and cartridges and to purchase it at $.10 you had to purchase it between Aug 1 and Sept 16 2019. That was during or just after the vape crisis. It’s not in the NICI database so where did it come from? These are questions you don’t need to answer except to yourself. But don’t feel too bad I’ve got several of these from three years ago. Plus with the crash everybody’s stocks are or were doing this? Next question, did you sell it yet at a loss? If not does it really make sense to sell it for $21? Would it be worth $94 to get it all or even more back? Have you read my posts? This is an example, Going by the numbers you gave, your CBS (cost basis per share) would be 3000 @ .1089 with a cost of $326.55. If you purchased 47,000 shares @ .002 which it did hit Mar 13th at the cost of $94, that would move your CBS to .0084. That would put you in the ball park. Sounds crazy but, If the stock went up to $.01 which is possible at anytime, you could sell the total 50,000 shares for $500.00 you get all your money back plus a nice profit! With an average volume of 382K it’s even feasible. Or you can sell half and still have enough if it keeps going up for more profit. You get half your money back and still have more shares then you started at a much better position. It could happen quickly or take a couple of months, or even a year and you have all the time in the world. And half of $420.55 is still better then $21.00. That’s my BOL method and I’ve done it many times over!! This is a method, not a recommendation or personal advise.
      Have a great trade!!
      Waltrek

    • Update, OK, If you did what I showed you, by the numbers I used, on April 22, 2020 it opened at .002 your CBS would change to be .0084 and today you would be in profit at .011!
      Have a great trade!!!!
      Waltrek

  7. What if the company could reposition it’s name into an incorporate trust company and settle some of it’s debits with leanders an shareholders to keep afloat at least untill a buyers market has a resurgence.

  8. I’m expecting ACB to come back reason being it’s still expanding in other parts of the world. Sometimes you have to do more research on a company and have faith in the ones who names are big in the game. This Cannabis market is new and there is a lot of laws holding them back from exploding. Be positive and watch how ACB come back.

  9. Robert Walters has hit the nail on the head as it were…. Read his post above as it defines exactly how you should be investing and managing your portfolio. Use the NICI database to identify your picks then follow what he says above.

  10. I have been trading stocks since 1990.

    I have had many stocks do a “reverse split” and so far I have NEVER had any one of them return to my initial investment.

    In fact, they fall from the “new price” all the way back to the price they were at before the reverse split in a short time. If investors don’t like a stock at $.69 why would they like it at $9.00???

    I am 77 years old and I am hoping that ACB will be the first reverse split that actually works for me (us) before I pass on to the great beyond.

  11. I started investing in ACB in 2017. I have 1474 shares at an average cost of $7.37092 each. I stand to lose over $9800 as I write this. I’m very upset and feel very uncertain as to what I should do. Any suggestions? Is there any way for me to recoup?

  12. I’ve got 2 suggestions. Go back and reread what Waltrek said above. The second one is for the future – never put that much money into one stock. With a nice chunk like 10 grand you could have bought 50 pot stocks at $200 a piece. That way your risk is spread out and if a few of them go out of business you’re only losing $200 on each one. Then more of them will languish around the price you bought them at, not making much but not losing. But the third group will take off and multiply your money over and over. This method is called using assymetric bets. You risk a small amount on each stock for the chance of making 10 times your money or possibly much more. Because this a brand new asset class, you can buy good companies at pennies on the dollar and ride them for all they’re worth.

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