Last week, one of the largest cannabis operators in the North American region announced the appointment of a new CEO, who seems to have a serious goal of making the company shine once again. Aurora Cannabis continues to report falls after its latest financial report that showed close to $2.5 billion in losses across 2020 and a weak revenue expectation for the next fiscal year. Aurora was one of the first cannabis businesses to go public on the stock market back in 2018 and, since then, it has lost more than 90% of its stock value. However, things are expected to improve as Miguel Martin is taking over the operations with the fixed idea of changing the company’s strategy to right the ship.
“The opportunity is in the consumer business … bringing those incredibly premium and super premium brands that we’re blessed to have, Whistler, Aurora, and San [Rafael], back into the market in a strong way in the flower business,” Martin told Cheddar Wednesday. “And also take advantage of the rapid growth to emerging categories, which is vapor and pre-rolls.” Martin believes that the consumer-packaged goods market is the best way to go to bring the company right back up.
One of the main things that have caused a financial struggle is that the company spent a lot of resources in producing premium cannabis while customers seemed to prefer less expensive marijuana. In response, Aurora launches a series of “value” brands with more competitive prices to drag out customers from the illicit market, such as Daily Special, which is now responsible for 62% of the total revenue the company is reporting.
Now, Martin suggested that it is best to redirect the company to a focus on the premium flower so it can reach a positive adjusted EBITDA by the second quarter of 2021, even if some experts are unsure about how effective that plan would be.