Insider Buying: CEO Picks Up $1 Million Worth Of Aurora Cannabis Stock

 | Dec 03, 2019 06:13AM ET

What people say and what they do often don't align. But that's not the case when it comes to Aurora Cannabis (NYSE:ACB), (TSX:ACB) CEO Terry Booth.

The chief executive of the Edmonton-based marijuana producer – one of the biggest players in the cannabis space – has made his intentions clear in both ways during the past week.

First, according to a , Booth purchased 270,000 common shares of his company on Nov. 25. He purchased them on the open market at a price of $3.68 for a total of $993,600.

Then, four days later, Booth reiterated his optimism about his company’s future prospects during an , while acknowledging that more turbulent times are probably ahead, especially for Canadian-based cannabis companies.

According to Booth, for growers that cannot keep a lid on the cost of producing the weed, especially as the industry deals with a growing oversupply, there will be what he called “carnage.” He did, however, point out that Aurora has been successful in keeping its costs well in check. Said Booth:

“I think you'll see some carnage in the production area when people are growing it for $4 and $5 a gram. We’re doing it for less than a buck.”

“We're not going to want to get into any price wars, but if the market does go down in pricing because of oversupply, we're best prepared to deal with it.”

Viewing the future through that singular lens raises a red flag for other big Canadian-based producers, including Canopy Growth (NYSE:CGC), (TSX:WEED) and Tilray (NASDAQ:TLRY). Both have seen their cost of production hover in the upper edges.

But there are many lenses needed to see the full kaleidoscope of this burgeoning industry.

Here is another lens to consider: acknowledging that Aurora’s stock price has taken a battering in the latter part of 2019, Booth’s recent purchase raises the question: is now the time to buy? Speculation is rife as to whether many cannabis stocks are hitting bottom and will rebound upward.