What happened

Shares of Aurora Cannabis (ACB 3.26%) fell 12.9% in June, according to data from S&P Global Market Intelligence. The former cannabis darling has fallen on hard times to say the least, with the stock down a whopping 86% over the past year. Nevertheless, June's decline can likely be attributed to a mere correction after May's huge 59% gain following the company's March quarter earnings report, which beat expectations.

Aurora's stock drifted back down in June despite several significant announcements that could be actually be taken as positive developments.

closeup of hands clipping a cannabis bud with scissors.

Aurora Cannabis had its share price clipped in June. Image source: Getty Images.

So what

June was a month of retrenchment and retooling for Aurora that included asset sales and cost cuts made in order to lessen its cash burn and help its ailing balance sheet. In early June, Aurora sold off all of its 23% stake in fellow Canadian alcohol and cannabis retailer Alcanna for $27.6 million Canadian dollars ($20.4 million). Unfortunately, that seemed like desperate move, as the share sale at CA$3 was far below the CA$15 purchase price back in 2018.

The retooling continued with president and co-founder Steve Dobler announcing his retirement from the board. Later in the month, former CEO and co-founder Terry Booth joined Dobler in announcing his retirement.

In conjunction with the retirement of Aurora's old guard, the company also announced a significant restructuring plan. Aurora plans to lay off 25% of its selling, general, and administrative (SG&A) workforce and 30% of production workers, and to shutter five of its Canadian production facilities. The company also wrote down a number of assets, a move that has been widely anticipated not just for Aurora, but for many Canadian pot stocks.

Now what

Aurora's new management believes the company can achieve EBITDA profitability in the first quarter of fiscal 2021, which began July 1 and ends Sept. 30. For the recent quarter, management has projected a significant decrease in cash burn, which totaled CA$155 million in the fiscal third quarter.

Still, even if the company hits that goal, investors should be aware that EBITDA is not the same as earnings. That's especially true of a company like Aurora, which has existing production facilities that will need at least some maintenance capital expenditures, and Aurora will still have interest to pay on over CA$570 million in debt and convertible debentures. As such, Aurora remains an extremely speculative stock in an unstable industry, making it appropriate only for high-risk speculators.