Aurora Cannabis, one of the largest cannabis companies in Canada, went public on the New York Stock Exchange on Tuesday, joining a select few cannabis companies who list on US exchanges. Aurora’s market capitalization has more than doubled since August, with much of this growth attributable to a report in September by Bloomberg stating Coca-Cola was in talks with Aurora Cannabis to create CBD-infused beverages. Aurora’s first day on the NYSE was anything but celebratory though, as its share price dropped 7.9%. Several cannabis companies have seen their share prices plunge after marijuana legalization began in Canada on October 17.
Table of Contents
- Aurora Cannabis Secures NYSE Listing
- Aurora’s Astounding Growth
- Cannabis Stocks Drop After Canadian Legalization
Aurora Cannabis Secures NYSE Listing
Aurora Cannabis, a major Canadian-based cannabis producer who has reportedly been in talks with Coca-Cola about creating CBD-infused beverages, debuted on the New York Stock Exchange (NYSE) on Tuesday, but its shares fell 7.9%. The NYSE is the world’s largest stock exchange by market capitalization.
Aurora trades with the ticker symbol ACB.
News of Aurora’s intention to list on the NYSE was announced in mid-September. Aurora sent in its application to the NYSE on Oct. 9 and was accepted on Oct. 18.
Aurora already trades on the Toronto Stock Exchange and OTC markets. However, the Edmonton-based company removed its OTC listings once it listed on the NYSE.
Aurora’s move to obtain an NYSE listing provides the company with more opportunities for institutional investors to buy shares and signals its growing maturity in the global market.
“Through our NYSE listing, Aurora joins an established group of mature global brands with improved access and exposure to an engaged international institutional investor audience,” said Terry Booth, CEO of Aurora.
Aurora’s Astounding Growth
Aurora is one of the top cannabis companies in Canada with a market cap surpassing $10 billion.
The company is continually growing, posting a 223% increase in Q4 revenue from last year.
To keep up with growing demand, Aurora also made a significant acquisition when it purchased MedReleaf, a Canadian-based pharmaceutical cannabis producer, for $2.5 billion in June.
In September, a report by Bloomberg stated that Coca-Cola was in talks with Aurora Cannabis to create CBD-infused beverages, and Aurora’s stock soared as a result.
Since August, Aurora’s market cap has increased by more than 100%.
Cannabis Stocks Drop After Canadian Legalization
Legalization of recreational marijuana in Canada has not led to the results investors were likely expecting.
Aurora fell more than 12% on Monday before it dropped further during its Tuesday debut on the NYSE. Since legalization day on October 17, Aurora’s share prices have declined 30%.
However, Aurora is still up 45% over the past three months.
Aurora’s losses on Tuesday were shared by other prominent Canadian cannabis companies such as Tilray Inc. (-3.2%) and Canopy Growth (-0.9%).
The Horizons Marijuana Life Sciences exchange-traded fund lost 1.97% Tuesday, extending its losing streak to six days. Over this stretch, the ETF has dropped 23.5%.
Market analysts believe part of the reason for the fall in share prices may be a result of profit-taking, especially since cannabis valuations were skyrocketing over the past few weeks in anticipation of legalization.
Another reason could be that legal cannabis companies may not compete well with businesses who will still operate outside of the government’s watch, unregulated, untaxed, and selling cheaper products.
Whatever the case, these latest stock trends indicate that cannabis is still a volatile industry.
Cannabis investors will likely agree with Aurora’s chief corporate officer Cam Battley who told Investor’s Business Daily back in September, “I look forward very much to a reduction in volatility in this sector.”