Cannabis shares turned red again on Monday, with Aurora Cannabis slipping another 9% after disappointing earnings, and MedMen slipping 17% as a result of job cuts and asset sales.
The ETFMG Alternative Harvest ETF
recently dropped 2.3%, with 23 of its 36 member stocks lower. The ETF has fallen for six consecutive days, dropping 34% year-to-date.
The Horizons Marijuana Life Sciences ETF
decreased by 1
SPX, + 0.01%
declined by 0.1% and the Dow Jones Industrial Average
DJIA, + 0.06%
were flat. Aurora
which saw the worst trading session in more than five years with a drop of 17%, extended its one-month losses to 32%, continuing to react to last week's losses Two facilities will halt construction and convert $ 155 million of convertible bonds into stocks to save cash.
The news shocked investors after a period of decline in the industry and a comprehensive reassessment of risk. Investors who bought stocks enthusiastically earlier this year are expecting heavy losses as the introduction of legal cannabis in Canada did not deliver the hoped-for profits.
See also: Short sellers continue to focus on cannabis even after the summer sale
Do not miss: All the excuses that cannabis companies make for an ugly harvest  Merchant MedMen
said late Friday that it plans to mine more than 20% of its staff and sell assets as it faces a money crisis, a growing problem for cannabis companies. The company announced that it would lay off 190 employees, reduce marketing and outsource functions such as human resources to reduce spending on sales, general and administrative activities to an annual rate of $ 85 million.
Last fiscal year On June 29, MedMen reported $ 244 million in general and administrative expenses and $ 27.5 million in selling and marketing expenses.
See: Canopy Growth CEO Defends Ugly Quarter as a One-Time Event
MedMen will sell its stake in a pot-focused real estate investment trust for $ 14 million and divest various venture investments For a net A $ 8 million return will be sought on the sale of "certain businesses and licenses in states that are currently considered non-critical to the company's retail balance."
In October, MedMen announced the plan to acquire PharmaCann LLC, one of the companies Share deal worth $ 682 million when it was first announced in 2018.
declined 1.4% after the company discovered illegal planting in a facility in Niagara who had acquired it as part of Acquisition of Newstrike Brands ltd. in the past year. The company said the growth was in a block that was not "reasonably" licensed, but promptly informed Health Canada and the regulator was satisfied that the company had handled the problem appropriately.
See: Canada calls on cannabis companies to improve disclosure of cross-shareholdings.
The plant is no longer in operation after Hexo has decided to cease operations as part of a cost-cutting measure.
"Hexo has now decided to proactively tackle this event, as recently false information has been leaked that has been spread to damage the company's reputation," states a statement.
Elsewhere in the industry, Tilray Inc.
TLRY + 0.73%
fell 1.3%, Cronos
decreased 1.1%, Aphria Inc.
decreased by 7% and Canopy Growth Corp.
decreased by 4%.
shares of Aleafia Health
decreased by 5% and Organization Chart by 9%.
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