Shares of Aurora Cannabis (NYSE:ACB) plunged 28.9% in December, according to data provided by S&P Global Market Intelligence, after the month began with reports that it was laying off more workers and pausing operations at one of its marijuana production facilities.
Share prices across the marijuana industry were under heavy pressure as companies began scaling back operations. While the COVID-19 pandemic could have presented the legal cannabis sector with a unique opportunity for growth, it didn't pan out that way, and by December, analysts were saying that they expected sales to grow at a much slower pace than they had before.
Aurora was already a bit troubled before that. Earlier in 2020, it was at risk of being delisted from the New York Stock Exchange until it initiated a 1-for-12 reverse stock split. And while that crisis was averted, it's still a loss-generating operation that's trying to cut costs. Management has failed to live up to its repeated promises to at least turn in positive adjusted EBITDA.
Aurora also lacks an advantage possessed by many of its large peers -- a deep-pocketed partner. Canopy Growth, for example, has an alliance with alcoholic beverage giant Constellation Brands, while HEXO has one with tobacco powerhouse Altria.
Cannabis-infused beverages and THC edibles are two of the biggest opportunities the marijuana industry has before it, but Aurora Cannabis seems unable to gain traction anywhere. Maybe with a new administration in Washington and Democrats in control of both the Senate and the House of Representatives, the U.S. government can get a legalization bill approved. That outcome could spark some optimism for this marijuana stock.