- Aurora Cannabis' new CEO, Miguel Martin, told Business Insider in an interview how he hopes to turn around the company after a tough few quarters of mass layoffs and stock declines.
- Aside from announcing its new CEO, Aurora said on Tuesday it would take a $1.4 billion impairment charge, and reduced its guidance for the fourth quarter.
- Martin said the "heavy lifting" has been done in terms of Aurora's "reset," allowing him to focus on turning the cannabis producer into more of a CPG-style business.
- Visit Business Insider's homepage for more stories.
Aurora Cannabis on Tuesday named Miguel Martin its new CEO and said it would take up to $1.4 billion in goodwill impairment charges when it reports earnings on September 22.
Martin, formerly the CEO of hemp company Reliva, joined Aurora in May after the Edmonton-based cannabis producer acquired Reliva. Martin was named chief commercial officer in July, just over a month after the acquisition, and he's now taking over from Michael Singer, Aurora's former interim CEO and executive chairman.
Martin is taking the CEO job at a difficult time for the company. The company has been laying off staff and closing facilities, and the stock has declined about 90% over the past year.
In an interview with Business Insider, Martin said the "heavy lifting and resetting" has been done.
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"Now it's about brand building and compliance," Martin said, adding that his focus will be on building Aurora into a "classic" CPG (consumer packaged goods) portfolio, where the company offers budget, premium, and super-premium product options in the categories in which it competes.
Martin said he wants to focus on two specific product categories for the Canadian consumer market: vaporizers and pre-rolled joints. He says these are the fastest-growing products in both Canada and in more established consumer cannabis markets in the US, like Colorado and California.
'Clearing the deck'
Aurora also reduced its guidance for the fourth quarter. The company said it expects between $52 and $54 million in net revenue, a decline from $56.4 million in the third quarter. That number includes $49.9 to $51.4 billion in cannabis net revenue.
The cannabis producer said it would pay $22.6 million to end its partnership to research the effects of CBD on athletes with the UFC in the first quarter of 2021. The company also aims to be EBITDA positive by the second quarter of 2021, rather than the first quarter, as it had previously told investors.
Singer, Aurora's former interim CEO and now executive chairman, said these moves were all about "cleaning up the past and clearing the deck" for Martin to step into the top job.
"We're very confident about a profitable business going forward," Singer said. "We're excited about our future and we think Miguel is the right fit."
Some analysts, however, gave Martin's appointment mixed reviews.
"The fact that he was given the CEO role so soon after would suggest limited availability of suitable (or indeed interested) parties externally," Jefferies analyst Owen Bennett wrote in a note.
Second, Bennett said that while Martin should be judged "on results," it is "easy to pick holes in his experience with regard to building international brands across a variety of distribution channels."
Before Reliva, Martin served as a VP at Altria and then as the general manager of Logic, a Florida-based e-cigarette manufacturer.
Vivien Azer, of the investment bank Cowen, said in a note that Martin is "well-placed" to take the helm of Aurora and that he "understands well highly-regulated categories."
Aurora shares have fallen 90% in the past year
The writedowns and reduced guidance come after a tough few quarters for the company, which saw numerous facilities closures, hundreds of layoffs, and a cratering stock price.
In June, Aurora laid off 30% of its staff or approximately 700 workers after it closed five cultivation facilities in Canada, as part of a broader effort to pare back expenses. Those layoffs included 25% of the cannabis cultivator's corporate staff, the company told Business Insider at the time.
Read more: The CEO of Canopy Growth lays out 3 reasons he's 'never been more bullish' on the cannabis industry
In February, Aurora's longtime CEO, Terry Booth, stepped down and the company cut 500 jobs. And in December of last year, Cam Battley, Aurora's chief corporate officer and the company's most public figure, stepped down from his role
As of June 30, Aurora says it had approximately $121 million cash on hand.
Aurora Cannabis, however, is still one of the most popular stocks on the millennial trading app Robinhood, and counts billionaire Nelson Peltz as a strategic advisor.
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