Is is time to sell Aurora Cannabis (TSX:ACB)?

Roth Capital Partners analyst Bill Kirk says Aurora Cannabis (Aurora Cannabis  Stock Quote, Chart, News, Analysts, Financials TSX:ACB) faces a larger-than-expected drag from Canadian medical cannabis reimbursement changes.

In a July 27 update, Kirk reiterated his “Neutral” rating on Aurora and lowered his target to $4.00 from $5.00.

Kirk said Aurora’s higher exposure to medical cannabis has supported stronger gross margins and international opportunities, but it also leaves the company more exposed to reimbursement changes.

“We flagged the potential headwinds associated with the Canadian medical cannabis reimbursement changes in our last note, but in revisiting the impact, we expect a larger drag than initially considered,” Kirk said.

Canadian veteran reimbursement changed to $6.00 from $8.50 as of April 1. Kirk said that pressure, along with planned international investments and the company’s exit from lower-margin businesses, is offsetting category growth, share gains and international expansion.

The analyst said Aurora’s EU-GMP infrastructure at Ridge, River and Leuna, Germany remains a unique advantage, but the Canadian reimbursement drag pushes EBITDA growth into fiscal 2028.

Kirk lowered his fiscal Q1 2027 forecast to net sales of $69.4-million from $73.3-million and Adjusted EBITDA of $3.5-million from $5.1-million.

For fiscal 2027, he now expects net sales of $299.5-million and Adjusted EBITDA of $22.8-million, down from $310.8-million and $30.5-million, respectively.

Kirk said Aurora still has longer-term advantages, including GMP-supplied international opportunities in markets such as Australia, Germany, Poland, New Zealand and the United Kingdom. He also pointed to the possibility of more countries introducing cannabis programs, including Switzerland and Austria.

But he said upside remains tied to regulatory change outside the company’s control. While Aurora’s balance sheet has improved and M&A in Europe remains possible, he said near-term EBITDA remains under pressure.

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