Aurora’s Cash Burn Rate Is Rampant

Last night Aurora (ACB) released its Q2 2019 earnings, and there are some alarming issues in the numbers. The news came aftermarket at around 5 PM EST, which is never a good sign from a PR perspective.

Aurora’s gross margin has dropped a whopping 16% this quarter, the company says it’s due to a drop in the retail cost of cannabis combined with Canada’s excise tax. If that is in fact the case, and the price of cannabis continues to drop, how will these big producers stay in business?

A quick look at the numbers also shows that Aurora burned through exactly half of its cash last quarter, going from a cash position of $548.4M to $274.6M while their asset value remained stagnant.

The company remains optimistic as Aurora sky launched recently.

The company also notes

Net revenue of $54.2 million, up 83% sequentially, and up 363% compared to the same period in 2018, driven by Aurora’s strong performance in the launch of the Canadian consumer market with sales of $21.6 million, and the Company’s continued strength in the Canadian and international medical markets with sales of $26.0 million, up 8% in revenue and 23% in volume sold.

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