Peltz's Departure From Aurora Sends Shockwaves Though Cannabis Stocks

Last week was a tough week for cannabis stocks as ETFs plummeted with disappointing earnings reports. The ETFMG Alternative Harvest ETF MJ, the AdvisorShares Pure Cannabis ETF YOLO,  The Cannabis ETF THCX, the Amplify Seymour Cannabis ETF CNBS all lost around 6% on average. Even the SPDR S&P 500 ETF Trust SPY was down 0.4%. The major disappointment was delivered by Aurora Cannabis Inc. ACB's beyond disappointing fourth-quarter earnings report.

What happened with Aurora?

The Edmonton, Canada-based company reported a loss of $2.5 billion for the fiscal year. Total net revenue of $54.1 million dropped 5% from the previous quarter. More specifically, revenue for consumer cannabis in the recreational market dropped 9% to $26.7 million. Revenue for medical cannabis only increased 4% as net revenue was $24.2 million, helped by market growth in Canada and Europe. Continuing operations resulted in a loss of $1.40 billion. The shares plummeted following the results, already being down 91% over the past 12 months, reducing the company's market value to a fraction of its former size.

Departure of Peltz

The past year has been a tough one for Aurora and it doesn't seem to be getting any easier as on Monday, the billionaire investor Nelson Peltz resigned as advisor. Aurora brought in Peltz after Canadian competitors Canopy Growth CGC and Cronos Group CRON locked up multibillion-dollar investments from global liquor giant Constellation Brands STZ and Virginia-based Altria MO, hoping that he will strike a similar deal with his connections to major U.S. consumer goods firms like PepsiCo PEP and Mondelez International MDLZ. Being a director of fast-food holding firm Wendy's Co. WEN and Procter & Gamble PG, he seemed like the perfect person to help the company expand internationally. It was a good idea, but Aurora ended up losing more than $2.6 billion since Peltz joined last year as it failed to catch up to its competitors.

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