Aurora Cannabis Inc. reported a 24% sequential decline in revenue Thursday, reporting sales of C$75.3 million ($56.8 million) versus C$98.9 in the previous quarter, as the company slows its expansion plans in Canada and abroad.

U.S.-traded shares of Aurora












ACB, -7.32%











ACB, -6.61%










 fell more than 11.3% in the extended session.

The company reported fiscal first-quarter net income attributable to Aurora of C$12.8 million, or a penny a share, compared with C$105.5 million, or 12 cents a share, in the year-ago period.

Aurora said that it sold C$30.5 million of medical weed; recreational sales sequentially declined 33% to C$30 million, which Aurora said was due to slower provincial ordering. Aurora sold C$10.3 million worth of wholesale pot, which executives said mostly consisted of lower-quality product such as trim and shake, leftovers from the higher-value smokeable flower.

“During the summer, the provinces feasted on the supply that was available and stocked their shelves to the limits,” Chief Executive Terry Booth said in a conference call. “And that was maybe a good idea in their minds that they’re not going to have supply issues for the retailers anymore, but it also affected the next quarter, which they didn’t buy as much. The other thing that’s astride is — it’s some [cannabis companies], I mean including ourselves, we put some product aside for [cannabis] 2.0, and getting ready for this derivative market, if you will, its higher-value market.”

The derivative market Booth mentioned is the legalization of edibles, drinkables and vape products that are expected to be available to Canadian retailers next month. Such products were illegal in the country until October.

Overall, Aurora sold 12.5 tons of cannabis and produced 41.4 tons during the first quarter. The company said its cash cost per gram dropped to C$0.85 from C$1.14 in the prior quarter. “So, yes, our production with that high quality at low cost is designed specifically to be replicable and scalable,” Aurora Chief Corporate Officer Cam Battley said in the conference call late Thursday.

In the earnings announcement, Aurora said it planned to halt construction at one of its weed-growing facilities in Denmark. The company also said it would delay completing the final construction and activation of its Aurora Sun facility in Canada. In the earnings call, Chief Financial Officer Glen Ibbott said that the construction halts were as a result of the company’s ongoing monitoring of demand in Canada and elsewhere around the world, and would result in C$190 million in cash savings, “over the next few quarters.”

Aurora reported earnings amid a brutal stretch for some of the world’s largest cannabis companies. Before the opening bell, Canopy Growth Corp.












CGC, -14.38%











WEED, -14.27%










  reported a fiscal second-quarter loss of C$374.6 million ($282.4 million), or C$1.08 a share on revenue of C$76.6 million. Earlier this week investors saw results from Tilray Inc.












TLRY, -5.35%










 , which beat Wall Street revenue estimates, and Cronos Group Inc.












CRON, -6.06%










 ,












CRON, -6.04%










 which missed revenue expectations.

In the earnings release, Aurora said that it had secured a commitment of investors holding C$155 million of its March 2020 debentures to voluntarily convert their debentures. Remaining holders of the debt will have the option to convert their debentures at a discount.

“In order to capitalize on this global market, we recognize the need to be nimble and proactive. To enhance our financial flexibility and position us to take maximum advantage of future growth opportunities, we have also taken decisive steps to immediately strengthen our balance sheet,” Booth said in a statement.

In the earnings call, executives acknowledged that there was no lockup period associated with the freshly available shares from C$155 million that has already committed to convert the debenture into shares.

After years of mispronouncing the San Rafael ’71 brand, Aurora executives still appeared confused on how to say it. In the conference call late Thursday, Battley pronounced it the way locals say it in the California town the brand was named after: “San Rah-fell.” But Booth pronounced it, “San-Raf-aye-el.”

Ahead of Thursday’s extended-session moves, Aurora shares had declined 34% this year, as the ETFMG Alternative Harvest ETF












MJ, -4.55%










 had fallen 31%.