Aurora Cannabis (ACB.V) has, for a long time now, struggled to get out of its own way. From an enigmatic CEO who stays up too late and hits ‘send’ too soon, to a beaten up balance sheet, the owner of Canada’s admittedly shiny, pretty, and jealousy-producing licensed pot facility has had plenty to work through without legal actions poking it in the ribs.
But that’s what’s happening, and happening. and happening.
Former insider Marc Levy, once-President of Prescient Mining, which Aurora RTOed into, played a little fast and loose with his trading. Or so some former Aurora folk like to whisper.
So Aurora is suing Levy. And Levy’s mom is suing Aurora for money she says is owed from a pre-RTO loan. And she says she’s owed many 2c warrants that Aurora refuses to process.
Aurora, meanwhile, says the Levy clan didn’t do what they were supposed to do during the RTO, and thus breached contract and get nothing.
Also, the interest rate on that loan, according to Aurora, is beyond the point of criminality.
If this looks like a giant puddle of bad intentions to you, I think you’re right.
At the heart of it all, it kind of makes sense strategically for Levy to respond to Aurora’s charges with a lawsuit of his own, especially as Aurora isn’t dripping in cash just yet and is in no position to get into a protracted legal battle.
Then again, that absence of cash means issuing those warrants and paying out that loan is hardly the company’s priority right now.
Realistically, this is all about both Levy and Aurora CEO Terry Booth figuring out who most prepared to take a punch in order to dish one out.
I’ve much respect for Aurora’s Cam Battley and believe he’s likely the only guy in the mix playing from his head and not his gut right now, but to outsiders, this is a messy deal that is not getting better, and Aurora’s stock price is heading in the direction you’d expect as it continues.
Both parties would do well to settle and never darken each other’s door again. Because having a nemesis is bad business.
— Chris Parry
http://www.twitter.com/chrisparry