Aurora Cannabis made its anticipated debut on the New York Stock Exchange Tuesday. The timing of the move wasn’t great, as many cannabis stocks tumbled again in a selloff that has lasted more than a week.
Once the stock opened for trading on the NYSE, Aurora shares fell as much as 15%. By Tuesday’s market close, Aurora’s stock had recovered somewhat, finishing the day down 12% at $10.08 a share.
The decline came as another day of stock losses for the cannabis sector. Tilray closed down 1.5% Tuesday, while Canopy Growth fell 1.4% and Cronos Group also fell 2.1%. Pot stocks have been steadily declining for more than a week, prompted in part by Canada’s move to legalize recreational marijuana last week. Speculators who had bid up pot stocks for months have been selling on the Canada news to try and lock in profits.
As of Tuesday’s close, Aurora shares traded in Toronto had lost 32% of its value in the past six trading days, while Tilray is down 27%, and Canopy and Cronos have both lost about a quarter of their value.
Last month, Aurora indicated its interest in having its stocks trade on a U.S. stock exchange. In early October, the company filed a Form 40-F, which allows stocks traded in Canada to have a list shares in the U.S. The company’s stock had been available to trade on the OTC markets, but the lack of liquidity in OTC stocks caused problems, such as trading app Robinhood suspending trading in Aurora shares due to high demand.
Aurora has bought up a number of cannabis startups, earning it the moniker of “the Berkshire-Hathaway of cannabis stocks.” In the past two years, the company bought 11 companies, including Vancouver-based ICC Labs, which has a 70% market share in Uruguay, the first country to legalize pot. Other acquisitions include MedReleaf, CanvasRx, and Anandia. The dealmaking has given Aurora the annual growing capacity for 570,000 kilograms of cannabis as well as sales and operations in 14 countries.
Aurora’s investments helped the company post a net profit of $77 million in its fiscal year ended June 30. Most of that profit came from gains on the sales of derivatives and other securities, which totaled $186 million. At the operating level, Aurora posted a loss of $96 million, versus an operating loss of $11 million a year earlier.