Aurora Cannabis (TSX:ACB) stock fell 3.03% on November 22. Shares have plunged 29.9% over the past month. Cannabis stocks have suffered a broad retreat since legalization, largely due to the global stock selloff that has spread to nearly all sectors in North American markets.
Aurora received another piece of bad news in mid-November as Ontario’s retail network became less welcoming to its ambitions. The Ontario government announced on November 14 that retail licenses would not be issued to corporations with more than 9.9% of ownership controlled by one or more licensed cannabis producers or affiliates.
The new PC government has attempted to fashion itself as pro-small business, and this seems to be another attempt to strengthen its political bona fides with applications for licenses set to open on December 17.
Aurora currently owns over 20% of Alcanna Inc. (TSX:CLIQ), an Edmonton-based alcohol and cannabis retailer. Alcanna has posted impressive early numbers in Alberta but had ambitions to expand into Ontario as well. Reports suggested that the company immediately made inquiries into Ontario following the announcement that the province would opt for private retail.
Alcanna stock has plunged 24% month-over-month and was negatively impacted by the news.
Canopy Growth will also see potential retail growth curbed by this move, but both companies will undoubtedly explore alternatives in order to gain access in other ways.
The Ontario Cannabis Store (OSC) has received extremely poor reviews in the early goings, and brick-and-mortar retail will not be launched in the province until April 2019. The demand for efficient retail in the sector will be high.
