Aurora Grand Plan I recall in 2016, when Aurora was in the midst of their expansion phase, while they were freely using new share issues as their currency, someone put forward the theory that sounded a bit farfetched at the time, but appears to have gained weight recently.
The theory was that Aurora was trying to build out as fast as they could on the backs of investors, through either acquisition or actually building facilities, diluting and borrowing along the way. This was being done while upper management were fully aware they would never be a sustainable endevor. They provided guidance and a narrative to the contrary and inflated their potential to keep things going as long as they could. I mean, do you remember the Coke rumor that the company perpetuated? I think no one can argue Aurora has not thrown caution to the wind over the last few years.
The part that sounded crazy at the time was that they had an ultimate plan to bankrupt the company, allowing a large multinational, whether that be pharma, tobacco, CPG, or alcohol, to come in and buy up all the pieces for pennies on the dollar. These are quality facilities, Sky, Whistler, Larson – the list goes on. Shareholders get nothing in the end, the large company that orchestrated all of this gets a cannabis division cheaper than anyone else.
With Cam exiting, and now Terry, I can’t shake the thought that we are only steps away from seeing the successful conclusion of this plan. I can only speculate that the players were well compensated along the way. Cam, knowing how this ends, moved his family to a different continent knowing the backlash that this will cause in Alberta and British Colombia. This could get real ugly.
Earnings are out tomorrow, and I hope they show signs of sustainability. I think if the scenario above happens, it damages the whole sector. If I held shares, I would hold through earnings and reevaluate my position before the next quarter.