Aurora stock is tanking today after Aurora Cannabis (TSX:ACB) (NYSE:ACB) announced that it would lay off up to 500 staff members and the departure of its longtime CEO Terry Booth.
Double Figure Drop in Aurora Stock
In news that is sure to rock the cannabis industry, Canada’s second-biggest pot firm by market cap yesterday revealed that it would cut approximately 500 jobs, including 25% of corporate positions, as the beleaguered company feels the pain of C$1 billion in impairment charges on Thursday. The company said it expects charges of as much as C$225 million on assets and nearly C$775 million on goodwill in Q2, while net revenue will be between C$50 million and C$54 million. Aurora stock is down 16% on the news.
In addition to the huge round of layoffs, the company has also announced the retirement of its longtime CEO Terry Booth, to be replaced by Executive Chairman Michael Singer on an interim basis. Booth co-founded Aurora Cannabis in 2013 when the Canadian government created a new regulatory regime for medical cannabis and led the firm to become one of the biggest cannabis producers in the world. However, escalating losses and out of control expenses led to an 85% drop in Aurora stock over the last 12 months, and it has become clear that restructuring was needed.
Outgoing Aurora Chief Booth said in a statement, “Over the last seven years, Aurora has built an incredible platform and a leading position in the global Cannabis industry. I am proud and humbled to have led that journey with a deeply talented and passionate team of employees. While there is still much work to be done, the timing is right to announce my retirement with a thoughtful succession plan in place and the immediate expansion of the Board of Directors.” Aurora stock is currently trading for just $2.24.
CEO Exodus Grips Cannabis Market
Booth’s departure is the latest in the recent CEO exodus, which is gripping the cannabis industry as companies look to distance themselves from the troubles that have gone on before. Last week, former US high-flier MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) announced that its controversial CEO and co-founder Adam Bierman would be leaving the company. However, only time will tell if the new bosses can transform the fortunes of their respective firms.
What do you think about Aurora Cannabis’s prospects now?
Featured Image: Canva