TORONTO (Reuters) – Aurora Cannabis (ACB.TO) co-founder and Chief Executive Terry Booth will retire and step down from the marijuana producer, with Executive Chairman Michael Singer becoming interim CEO, the company said in a statement on Thursday.
The Logo for Aurora Cannabis Inc., a Canadian licensed cannabis producer, is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 8, 2019. REUTERS/Brendan McDermid
The company has also cut about 500 jobs, including about 25% of corporate positions, and will cut capital expenditures in the second half of fiscal 2020 to bring them to below C$100 million ($75.3 million), it said in the statement.
Aurora’s U.S. listed stock fell 13% in after-hours trading. The shares were halted pending news release earlier on Thursday.
Booth will remain on Aurora’s board and will become a strategic adviser to the company, Aurora said, confirming an earlier Reuters story.
“I don’t think we’re going to see some sort of major strategic change, because Singer has been involved with the company and they’re keeping Booth on as an advisor,” said Andrew Kessner, an analyst at William O’Neill in New York. “This is to signal to the market that they are making changes.”
The executive change makes Aurora the latest in a string of Canadian cannabis companies to change leadership as soaring costs and disappointing sales prompt concern from investors sitting on billions of dollars in losses.
Singer has been on the board of the Alberta-based company since May 2016, serving as a director and chairman, before being named executive chairman nearly a year ago.
He takes leadership of Aurora as the company is facing criticism for its aggressive global expansion amid uncertain demand. Aurora has stopped estimating when it will become profitable after missing its own guidance.
Aurora also said it had made amendments to its secured credit facilities, including removal of some covenants. Analysts have warned the company may not be able to meet the covenants of a C$360 million loan due in August 2021.
Aurora has begun a formal search for a permanent CEO, Booth said in the memo without providing a time frame, adding that details would be shared once the process is complete.
Booth’s departure follows the abrupt exit of Chief Commercial Officer Cam Battley.
Canopy Growth (WEED.TO) and Aphria APH.TO, as well as mid-tier cannabis companies including Supreme Cannabis (FIRE.TO) and Sundial Growers (SNDL.O), have all seen their CEOs replaced over the past year.
Aurora’s expenses in the most recent quarter were almost four times its sales. Aurora shares fell 5.2% in Toronto before being halted.
Reporting By Nichola Saminather; Editing by Chris Reese, Tom Brown and Cynthia Osterman