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Why Aurora cannabis stocks jumped over 30% today

What happened

After jumping 32% earlier in the session, shares of a Canadian sweat company Cannabis Aurora (NYSE: ACB) remain up 21% at 10:50 p.m. EST. This year the stock was on an uneven journey. Although shares have fallen 65% year-on-year, they jumped about 80% just after the November 3 US election.

So what

And the election is still driving action today. The news that the Trump administration has officially cleared the way for the transition to Biden’s presidency gives marijuana company investors more optimism for the industry.

marijuana leaves and bud

Image source: Getty Images.

Investors in pot stocks applauded the election for several reasons. Five states – New Jersey, Arizona, Mississippi, Montana and South Dakota – had voting initiatives to legalize marijuana, and all five passed.

Aurora shared more than twice on election week alone. Part of the rise was the belief that the Biden administration would be more friendly to federal weed legalization. However, investors cannot count on this.

Now what

Aurora has spent much of this year restructuring its business and raising capital as its losses increase. The changes include job cuts, the closure of operations to consolidate production and the sale of additional fundraising stocks.

In the recently reported first quarter fiscal 2021, Aurora said it had revenue of about $ 52 million. This was a decline from the previous year, which is not something that investors in the growth industry want to see.

The potentially good news for investors is that the company is looking to achieve positively adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in its next quarter. This is where investors need to focus in the near future.

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