Aurora Cannabis appoints new CEO, but will it last?
Three strikes and out, let’s hope that this is not the path for Miguel Martin, the newly appointed CEO for Edmonton-based cannabis company Aurora Cannabis. Martin takes the reins from Michael Singer, the interim CEO since Terry Booth retired from Aurora Cannabis. Singer helped in deciding who would be right for the organization, and without a doubt, the name Martin was at the top of the candidates.
His knowledge of the team and his entrenchment in the company helped to sign the deal. Singer will remain with Aurora Cannabis as executive chairman. Miguel Martin was the top man for Aurora’s US cannabidiol company Reliva, and his move to chief commercial offer at Aurora Cannabis was just one step closer to his current CEO position.
His focus will be on ensuring the Canadian market stays stable and lucrative while building international strategies. However, Martin's appointment does not come at a smooth time for the cannabis industry, even if the position is with a well-known giant like Aurora Cannabis, as the company made its second round of significant cuts this year while looking for ways to develop a re-constructing plan to address profitability struggle.
55% of the Aurora Cannabis workforce, including administrative, general production, and selling staff were let go in the process. The reconstructing also included the ceasing of some of the operations at five Aurora Cannabis facilities. Aurora Canada was also not the only cannabis company that was needing to look at re-constructing.
Then the COVID-19 came into the world, bringing with it financial hardships for the cannabis industry. The losses have been massive for the industry, and many companies have collectively laid off thousands of workers and permanently shut down facilities as has Aurora Cannabis.
Aurora Cannabis was expecting to take a non-cash write-down of goodwill and intangible assets worth between 1.6 billion and 1.8 billion dollars in the fourth quarter, which ended in June. Furthermore, the write-down includes 140 million dollars in inventory charges and a 90 million dollar asset write-off. The interim executive Singer believes these moves will improve the gross margins and accelerate positive cash flow.
He believes that Aurora Corp will now have the correct balance for long-term success by implementing the financial discipline, operational excellence, and strong execution. This all sounds great, but can the new CEO of Aurora Cannabis follow with the same perspective and business plan? The Aurora Corp., now led by Martin, believes that cannabis companies and corporations are facing are a cleanup, which will ultimately allow those like Aurora Cannabis to focus on the future.
The company has ended its relationship with the Ultimate Fighting Championship. The partnership came when it looked like the multi-million dollar deal would help to fund clinical research on the relationship between 100 percent hemp-derived CBD products. The products were meant to alleviate inflammation, pain management, and injury recovery for UFC athletes.
The announcements from the company sent Aurora cannabis stock into a nosedive. So, only time will tell if Martin is three strikes and out, or can he prove that a third choice is the correct one, and with his knowledge, Aurora Cannabis might just keep growing and budding in the future. Can he do it? We’ll just have to wait and see.