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Buds & Duds: Aurora Cannabis CEO Terry Booth’s resignation sparks bloodbath in weak cannabis sector

Aurora's transformation plan showed it has eliminated about 500 full-time staff positions, or roughly 17% to 18% of its workforce

Buds & Duds: Aurora Cannabis CEO Terry Booth’s resignation sparks bloodbath in weak cannabis sector
Marijuana stocks were steeped in red as money losing companies in the cannabis industry tried desperately to right the ship

Marijuana stocks were steeped in red Friday as money-losing companies in the cannabis industry tried desperately to right the ship. Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) led the bloodbath after CEO Terry Booth resigned.

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, lost 2.5% to 102.7 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF was down nearly 3% at C$8.48, while the OTCQX Cannabis index also tumbled by 3% to 424.3 points.

Duds

Aurora Cannabis revealed late Thursday that Booth is retiring amid “sweeping changes” for the Canadian licensed producer, the latest marijuana company to slash costs amid a looming cash crunch in the sector. Aurora outlined a “business transformation plan” in a statement which showed it has eliminated about 500 full-time staff positions, or roughly 17% to 18% of its workforce.

Aurora will have a hard time attracting the talent necessary to instill investor confidence, according to analysts.

Aurora stock plunged nearly 15.2% to US$1.70 in New York, while it tumbled nearly 16% to C$2.24 in Toronto.

Canopy Growth Corporation (TSE:WEED) (NYSE:CGC) failed to inspire optimism with its announcement that it will release results for the fiscal third-quarter 2020 period ended on December 31, 2019 before the opening bell on February 14.

Shares in Canopy fell 6.9% to US$19.72 in New York, while it tumbled 7.1% to CA$26.16 in Toronto.

Buds

GrowGeneration Corp (OTCMKTS:GRWG) received a boost from participating in the just-concluded Indo Expo Tradeshow, in Denver, Colorado.

The company’s stock was up nearly 7.2% to US$5.62.

GW Pharmaceuticals plc (NASDAQ:GWPH), which derives a lion's share of its revenue from its cannabinoid seizure drug Epidiolex, is having a good run in January thanks to encouraging preliminary fourth-quarter and full-year results. The big takeaway from the initial results were meteoric sales of Epidiolex. During its first full year of sales as a treatment for two rare but potentially deadly forms of childhood epilepsy, Epidiolex netted $296 million.

GW Pharmaceuticals stock was up 7% to US$126.58.

Contact the author Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

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