Publicly listed Canadian cannabis firm Aurora Cannabis Inc. (ACB) took a pounding on the Toronto Stock Exchange Monday, its stock falling 2.0 percent on lingering concerns among analysts of continuing slow growth in a legal market undercut by black market marijuana producers.

The world's second largest cannabis company after Canopy Growth Corporation (another Canadian firm) has seen its shares plummet 26 percent thus far into 2019. ACB's stock fell to C$4.86 (US$3.68) at the end of the day Monday after opening at C$4.93.

It fell 2.3 percent at one point after Seaport Global Securities, LLC downward revised its estimates for ACB growth and MKM Partners analyst Bill Kirk lowered his ACB stock price target to C$3.50 ($2.65) from C$5.00 (US$3.78).

“The company has said that it is tracking toward EBITDA profitability, but we expect the landscape to get much tougher, ahead,” wrote Seaport. “ACB is in the process of fleshing out an expensive asset base in Canada and Denmark, against markets that are anticipated to open slowly. Now more than ever, we believe that Canadian LPs need to maintain a low cost structure while also maintaining appropriate capital/cash reserves.”

Seaport downgraded Hexo Corp and Canopy Growth (CGC) to neutral from buy and maintained ACB and Tilray as neutral. It also sounded a warning that cannabis investors forsake Canada for the United States.

“As for the U.S. multistate operator group, we see a completely different set of circumstances in place, and we would broadly recommend that investors rotate away from Canada and toward the U.S.," wrote Seaport in a note to investors.

“We do not think that recent vape headlines will materially cut into forward MSO financials, and we see a number of opportunities for public MSOs on the horizon.”

On the other hand, MKM analyst Bill Kirk renewed his sell rating on ACB stock citing lower prices for cannabis. He also pointed to the widening gap between the price of legal pot and black market pot and fewer-than-expected new marijuana store openings in Quebec and Ontario.

In a note to clients, Kirk wrote ACB warned in its Sept. 12 earnings call that July and August earnings had slowed, "and including Hexo Corp’s commentary and pace of new stores, we have no evidence that September and early October were any better."

Kirk lowered his Q1 fiscal 2020 sales estimate for ACB to C$98 million (US$74 million) from the previous C$117 million (US$88 million), which is seven percent below the consensus C$105 million (US$79 million).

“We believe profitability for cultivators will generally get worse before getting better,” he wrote. “Pricing is already decreasing and supply availability will continue to grow/improve.”

Will Halverson (L) smokes from a bong as Mimi Bui lights a joint with their meal at Lowell Farms: A Cannabis Cafe in West Hollywood, California Will Halverson (L) smokes from a bong as Mimi Bui lights a joint with their meal at Lowell Farms: A Cannabis Cafe in West Hollywood, California Photo: AFP / Frederic J. BROWN