Aurora Cannabis (ACB) saw its net revenue fall by 11% in the first quarter, the Canadian company announced in first quarter results released after close on Tuesday.
After online magazine Marijuana Moment broke the news that Rep. Nancy Mace (R-SC) is leading a bill to deschedule and tax marijuana, many large cannabis companies saw their stocks surge throughout the weekend before evening out by the end of Tuesday.
Many companies pared back those gains after analysts urged caution.
For Aurora, net revenue for the quarter dropped 11% to C$60.1 million, just below expectations of C$61.328 million, but rose by approximately 10% compared to C$54.8 million in Q4 2021. Medical cannabis brought in C$41.0 million, a 23% increase from last period while consumer cannabis dropped 44% to C$19.1 million.
Overall, the company lost approximately 3.2% in the post-market.
The company said drops in consumer demand amid the lifting of pandemic-related restrictions contributed to the decline. Adjusted gross margin rose from 48% to 54% from prior-year quarter
"Our transformation plan is on track," Chief Executive Officer Miguel Martin said in a press statement. "We continue to strengthen and transform our business while benefiting from broad diversification across our international medical, domestic medical, and adult recreational segments."
The company currently has C$424.3 million, C$372.8 million in cash and cash equivalents and C$51.5 million in restricted cash, and has identified savings of between C$60 million to C$80 million by asset consolidation and eliminating supply chain inefficiencies.
"On a run-rate basis to date, we have executed over $33 million in annualized cost savings and are positioned to deliver approximately $60 to $80 million in aggregate across selling, general and administrative ("SG&A"), production, facility and logistic expenses upon the completion of our business transformation," Martin said.
At last bell, ACB shares were up 2.47% at $7.48. The company expects to release more savings at the end of the second quarter for FY23.