The landscape of cannabis investing has changed significantly between 2019 and 2020, and many of the largest, most respectable pot stocks have lost their allure. Despite starting the previous year as many analysts' favorite pot stock, Aurora Cannabis (NYSE: ACB) has quickly lost a lot of its appeal in a relatively short time.
While the company continues to report losses, some experts are worried that there's a bigger issue that threatens the company's financial situation. Specifically, Aurora has over 3.2 billion Canadian dollars in goodwill on its balance sheet, a shockingly high figure when one considers the company's market cap is only at CA$2.7 billion. Since companies are required to audit and evaluate their goodwill at least on an annual basis, some experts are worried that Aurora could end up reporting a goodwill adjustment in the billion-dollar-plus range.
Should investors be worried about this? Let's take a deeper look at the situation.