(This story has been updated with additional details.)
Terry Booth has stepped down as chief executive of Aurora Cannabis, the Canadian multinational marijuana company he helped build from the ground up over the past seven years.
His exit is the latest in a string of high-profile CEOs who’ve departed cannabis firms in the past year.
Aurora announced Booth’s “retirement” after stock markets closed Thursday, and disclosed that close to 500 full-time positions were eliminated to save costs.
Executive Chairman Michael Singer takes over as interim CEO, effective immediately.
The company also said it expects to report noncash asset impairment charges of up to 225 million Canadian dollars ($169 million) and write-downs of goodwill of up to CA$775 million.
Booth steered Aurora to become one of the biggest cannabis companies in the world, but shareholders grew restless as losses piled up and no clear pathway to profitability emerged.
He co-founded Aurora in 2013 when the Canadian federal government created a new regulatory regime for medical cannabis.
Booth invested CA$2.5 million of his own money in the startup, and, according to regulatory filings, the value of his holdings in the company totaled roughly CA$159 million as of June 30, 2019.
However, Aurora’s stock has plunged 74% since then.
Booth is the latest high-profile cannabis CEO to walk away from his job following disappointing company results.
Last week, Adam Bierman – the flamboyant co-founder of once-high-flying cannabis retailer MedMen Enterprises – resigned as CEO of the Los Angeles-based company and surrendered his voting control.
Also last week, Canadian cannabis producer Sundial Growers announced the departure of CEO Torsten Kuenzlen.
Most top producers replaced their CEO or other senior executives in the past year.
Voting results from Aurora’s annual general meeting show that confidence in Booth had been slipping in recent years.
At last year’s meeting, 84.33% of the votes cast were in favor of Booth’s appointment to the board.
That’s down substantially from 99.91% in favor in 2016.
Aurora’s revenues never met expectations after Canada legalized adult-use cannabis in October 2018.
The company reported lower-than-expected quarterly net revenue of CA$75.2 million for the period ending Sept. 30, 2019, missing consensus forecasts.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss widened to CA$39.7 million for the period, substantially worse than the consensus expectations of a CA$17.6 million loss.
International sales of dried medical cannabis came in at a disappointing CA$4.5 million.
“The public market got impatient with Aurora’s losses, debt load and equity dilution,” said Mike Regan, an equity analyst for Marijuana Business Daily’s Investor Intelligence.
“This culminated in the enormous dilution in November 2019 from the direct equitization of the convertible debt due in March 2020, which sent the stock down 36% in three days.
“This change in management may help give investors the confidence to invest additional capital, but given the still-substantial debt, the new CEO will have a tough road ahead of them.”
In December, Aurora lost two of its most important executives – Chief Global Business Development Officer Neil Belot and Cam Battley, chief corporate officer.
A regulatory filing states that: “In the event of a termination without cause or a resignation for good reason including a change-of-control, Terry will be entitled to a payment of 24 months of his base salary and cash bonus, and any and all invested equity options granted to him, including but not limited to Options and RSUs, shall vest immediately.”
Booth’s share ownership as of June 30, 2019, totaled roughly 15,229,163 common shares, with 2.17 million options.
Aurora used its stock as currency to fuel a cascade of acquisitions in recent years – diluting shareholder value in the process.
As of Sept. 10, 2019, Aurora had 1,028,762,723 common shares outstanding.
Aurora trades as ACB on the New York Stock Exchange and the Toronto Stock Exchange.
Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at email@example.com.