Arora Canabis (ACB) Updates

The cannabis industry keeps hitting with one after another bad news and it looks like never ending! Today it was Arora Cannabis (ACB) which had some bad news. Let's see..

The bad news first
  • Aurora said that CEO Terry Booth would step down from that position. Michael Singer, the company's executive chair, will become interim CEO. He (Terry) will still be in the board as advisor. 
  • Company forecast next (2nd) quarter revenue between 50 million to 54 million Canadian dollar which is less than previously forecasted. 
  • The company also said it expected write-downs on goodwill of between 740 million to 775 million Canadian dollar.
  • It laid-off nearly 500 (about 10%) staff company-wide.
  • The continual credit crunch for the company has been a constraint.

Some good news
  • It announced appointment of two new board of directors: Friedmann who has 25 years of experience with Kraft Foods and MondelÄ“z International (one of the world's largest snacks company). The other director Michael Detlefsen is currently the Managing Director of Pomegranate Capital Advisors. 
  • The company has reached an agreement with syndicate of banks (Canada) to provide Aurora with additional financial flexibility that would help ACB to achieve near-term profitability and providing the Company with options to refinance the facility at maturity.
  • The company also announced that it plans to better align fixed costs and capital expenditures with current market conditions. These combined changes will significantly accelerate Aurora's path to cash flow break even while still maintaining the Company's ability to capitalize on the long-term global cannabinoids market opportunity. 

My thoughts
It has been a very bumpy ride for the whole cannabis sector and more for ACB. Probably 
nobody expected so many hurdles for the whole sector. It's painful for now but in my view 
it will bring more transparencies for future growth. This company is a leader but going 
through a very rough time at present. The new board structure could possibly  enable them 
to have new partnership. I have accumulated enough shares but depending on the situation 
I will determine wether to add more/hold/trim. I still feel that this company has a bright 
future for longer term but struggling with the current phenomena. I hope and wish that this  
is the final blow before the turnaround! For short-term, it may still continue to be bumpy 
but long-term could still be very rewarding with the current share price. If you are invested, 
we are sailing on the same boat and possibly rainy season will be over soon! But I do not 
want to provide any false hope as nobody can predict the future, so due diligence from the 
readers are warranted.

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