Aurora Cannabis (TSX:ACB)(NYSE:ACB) stock has dropped 17% over the past month as of close on September 27. This has pushed Aurora stock into negative territory for 2019. Investors in the cannabis space are gearing up for "Cannabis 2.0" in Canada, which will include the legalization of edibles and vape pens. Companies like Aurora are ready to launch a plethora of products in response.
The company released its fourth quarter and full-year results for fiscal 2019 on September 11. Net revenue jumped 52% from the prior quarter to $98.9 million and kilograms produced rose 86% to over 29,000 in the quarter. Still, Aurora missed its own guidance in the quarter which sparked a selloff for the second-largest producer listed on the TSX.
CCO Cam Battley said that the miss stemmed from its non-core cannabis revenues, including analytical testing and patient counselling. Aurora was forced to push back its projection for positive EBITDA to fiscal 2020, an adjustment which shook its market value. Aurora management also added that the slow pace of the retail rollout had been a drag on its growth.
Aurora announced in June that it planned to expand into the edibles market. It has also entered into a partnership with the UFC in the United States to enhance research on using CBD for pain management and recovery. The company plans to have its new slate of products hit shelves by the middle of December.
Shares of Aurora had an RSI of 29 at the time of this writing, putting the stock in technically oversold territory. The company is still on track for profitability in the first half of fiscal 2020 and it should receive a boost from the next wave of cannabis legalization. I’m buying the dip in late September.
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