Marijuana stocks have been all the rage for the past several years as states have moved towards legalization. But the Trump Administration put a damper on that this week right after Andrew Left’s Citron Research blasted Aurora Cannabis (TSE: ACB) with a litany of claims including “Enron-type accounting” and no path to profitability.
Aurora VP Cam Battley said the company made a strategic choice to operate at a loss while it builds up production capacity, which is supposed to hit 250,000 pounds of marijuana per year by the middle of 2018. That’s a lot of weed! He added that Citron “doesn’t have a clue what he’s talking about.”
Aurora’s shares popped 20% on the day Citron came out with their thesis – not the best outcome on for an activist short seller on the first day. We’ll have to see where it goes from here, especially in light of the new Jeff Sessions-crackdown on the legal marijuana industry in the U.S.