Another top executive in the Canadian marijuana industry is out of their job, as Aurora Cannabis Inc. announced the departure of chief corporate officer Cam Battley.
Mr. Battley joined Aurora in 2016 and quickly became the company’s public face, often handling media interviews and answering questions from analysts about the cannabis producer’s strategy. Mr. Battley had also been one of the industry’s most vocal optimists, often touting how much potential there was to expand.
His sudden departure, announced late Saturday, follows the ouster of former Canopy Growth Corp. chief executive Bruce Linton this summer, as well as the exits of top leaders at Aphria Inc. in January. As well, both the chairman and chief executive of CannTrust Holdings Inc. exited this summer after Health Canada discovered the company was growing cannabis in unlicensed rooms.
All four companies had been leaders in the race to dominate the Canadian cannabis industry but have struggled over the past year – even though the recreational use of marijuana was legalized in October, 2018. Legalization was expected to be the catalyst that would justify their lofty market valuations.
However, weak sales and the scandal at CannTrust have contributed to investors abandoning the sector, which has sent share prices plummeting. Aurora’s stock price closed at $2.95 on Friday, down 56 per cent year-to-date – and down 80 per cent from its record high right before recreational cannabis was legalized.
The Horizons Marijuana Life Sciences Index ETF, which broadly tracks the cannabis sector, has lost 64 per cent of its value since peaking in October, 2018.
While a market shakeout had been expected by some, optimists had hoped that Canada’s largest producers, including Aurora, would be somewhat immune because they had raised ample cash to build sizable production facilities.
But even the giants are suffering amid the market rout. Last month, Edmonton-based Aurora reported a 24-per-cent drop in revenue quarter over quarter and also announced that it was deferring for the foreseeable future the completion of a 1.6-million-square-foot growing facility in Medicine Hat, as well as halting construction work on a greenhouse in Denmark.
On some level, Aurora’s size has ultimately hurt the company. Instead of saying small and nimble, Aurora, led by chief executive Terry Booth, aggressively expanded over the past two years, using its easy access to capital and inflated valuation to fuel a string of deals.
Notably, Aurora launched a hostile takeover bid for CanniMed Therapeutics Inc., Canada’s oldest medicinal marijuana supplier, in late 2017 and ultimately acquired the company for $1.2-billion. A few months later, in April, 2018, Aurora purchased Canadian rival MedReleaf Corp. for $3.2-billion.
Aurora also sought expansion anywhere it could – abroad, and into complementary sectors. The marijuana producer bought a greenhouse design firm and a German cannabis distributor, and partial stakes in a chain of liquor stores in Alberta and a lab for testing cannabis and soft-gel and wafer makers, among others.
In the past month, Aurora has started scaling back – as have many of its rivals – now that it’s become clear growers have produced far more cannabis than provincial wholesalers are selling to legal stores.
While Mr. Battley is leaving Aurora, the company said he will continue to have connections to the corporate family. Aurora owns a 10-per-cent stake in MedReleaf Australia, which is a privately held firm that sells medical marijuana in Australia and currently uses Aurora as its supplier. Mr. Battley will serve on MedReleaf Australia’s board.
Aurora declined to comment for this story on the timing of Mr. Battley’s departure. In a statement announcing the exit, CEO Mr. Booth said the company is “grateful for Cam’s leadership and passion over his many years with Aurora," adding that he is sure "Cam will be successful as he moves on to tackle Australia.”
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