The lack of pot shops in Canada has Aurora Cannabis (ACB.TO)(ACB) rethinking its promised path to profitability. But the company will get there before its peers, according to chief operating officer Cam Battley.
The Edmonton-based licenced producer announced its first-quarter 2020 earnings after the closing bell on Thursday, reporting an EBITDA loss of $39.7 million for the period ended Sept. 30. Analysts had expected a narrower negative $19.5 million figure.
The quarter, which also saw a 33 per cent decline in Canadian recreational sales, sunk Aurora’s shares to the lowest level in two years.
Back in January, the company targeted sustained earnings before interest, taxes, depreciation and amortization in the reporting period ended June 30. Battley said those hopes were dashed in large part because cannabis stores were slow to open in key markets.
“We, and everybody else, anticipated that there would be more retail infrastructure developed in the country,” he told Yahoo Finance Canada in an interview on Friday. “It's very frustrating.”
The dearth of brick-and-mortar stores, and its impact on financial results, has been a unifying theme as the sector reported quarterly results this week.
Organigram (OGI.TO)(OGI), Tilray (TLRY), and Canopy Growth (WEED.TO)(CGC) were among the scores of licenced producers pointing the finger at weaker-than-expected retail openings, particularly in Ontario. Canada’s most populous province has just 24 cannabis stores open for business. Alberta has over 300.
Battley has quit issuing timelines for profitability while stores remain sparse. He’s confident the situation will be short-lived.
“We're not making projections for the moment because of a very significant variable over which we don't have direct control,” he said. “We’re just being cautious for the time being. We hope to be able to provide greater clarity soon. But we’re very pleased with our progress relative to our peers. We know we are going to get there.”
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