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Aurora Cannabis is plunging ahead of its debut on the New York Stock Exchange

Oct 22, 2018, 20:08 IST

A worker collects cuttings from a marijuana plant at the Canopy Growth Corporation facility in Smiths FallsThomson Reuters

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Aurora Cannabis is plunging Monday, down more than 10%, one day ahead of the company's trading debut on the New York Stock Exchange.

The Canadian procuder, which grows cannabis for both the adult-use and medicinal market, has seen its market capitalization explode by more than 150% since August - to nearly $10 billion - as both corporate giants and investors have gotten in on the "green rush" into marijuana.

On August 15, the beverage maker Constellation Brands announced it was investing $4 billion in Aurora rival Canopy Growth, sparking a wave of interest in the space.

A month later, Bloomberg reported that Aurora had held talks with Coca-Cola about developing beverages infused with CBD, one of the nonpsychoactive compounds found in cannabis. No deal was announced.

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"Aurora has expressed specific interest in the infused beverage space, and we intend to enter that market," an Aurora spokesperson told Business Insider at the time.

"There is so much happening in this area right now and we think it has incredible potential. As a rule, we do not discuss business-development initiatives until they are finalized; however, we have a responsibility to our shareholders to give proper consideration to all relevant opportunities that are presented."

And last week, Canada became the second country in the world to legalize marijuana, but that didn't have the impact that investors were hoping for. Cannabis stocks got slammed as traders sold the news.

But investors remain optimisitic that Canada's legalization is the dawn of a new era for investors.

"We believe that the legalization in Canada offers a road map to invest in the companies that will form the basis of the legal cannabis industry in the coming years," Jon Trauben, a managing partner at the cannabis-focused Altitude Investment Management, said.

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Aurora Cannabis will trade under the ticker "ACB" beginning on Tuesday.

Jeremy Berke contributed to this report.

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