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36400.0 | 2023-04-05 00:00:00 UTC | The Best Growth Stocks Could Be in This Industry -- but There's a Catch | ACB | https://www.nasdaq.com/articles/the-best-growth-stocks-could-be-in-this-industry-but-theres-a-catch | nan | nan | The cannabis industry has taken a beating in recent years. Although in the past there has been a lot of hype and excitement around pot stocks when there was more hope surrounding the possibility of U.S. legalization, that optimism has since faded.
Investors have been significantly discounting pot stocks as their financials have been underwhelming. In the long run, that means there could be a lot of long-term gains to be made here given the industry's growth potential. But it's not a slam dunk -- those who buy and hold these stocks will be taking on quite a bit of risk.
No clarity about when federal legalization will happen, if ever
Analysts at MarketsandMarkets Research project that between now and 2027, the global cannabis market will grow at a compound annual growth rate of 24% reaching a value of more than $82 billion. If marijuana companies can achieve that level of annual growth, they would make for incredible investments to hang onto for the next several years.
Many of these types of estimates, however, make optimistic assumptions about the timeline for legalization that investors simply cannot rely on. While more U.S. states are likely to legalize marijuana in the future or expand from medical use to adult recreational use, full federal legalization may not happen for years, if ever.
In the meantime, losses continue to mount
The longer that there is no movement in Congress on legalization, the longer marijuana companies will struggle to generate growth and stay out of the red. For example, while multi-state operator Curaleaf Holdings (OTC: CURLF) has reported positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the past, it has been racking up net losses. And those losses have been getting deeper in recent quarters.
CURLF Net Income (Quarterly) data by YCharts.
And while new legal marijuana markets opening up have given it sales boosts in the past, the chart below shows how quickly its growth rate has plunged to just the single digits.
CURLF Revenue (Quarterly YoY Growth) data by YCharts. YOY = Year over year.
Those companies that survive could prove amazing investments
If federal legalization were to pass, there would be opportunities for significant economies of scale for producers such as Curaleaf, letting them cut their unit costs and potentially become profitable.
The risk is that many of today's cannabis businesses simply may not be around by the time those opportunities materialize. Although Curaleaf is a large operation today, and one that should be around in a few years, just how big or strong it will be down the road is a big question mark. The company has been scaling back, and it recently announced it will shut operations in California, Colorado, and Oregon.
A quick look at how poorly big players such as Canopy Growth and Aurora Cannabis have performed in recent years shows just how bad things can get. They, too, have been slashing costs and reducing their operations with the intent of improving their financials -- and those moves haven't paid off. Those two Canadian marijuana producers were once seen as industry leaders, but they have continually struggled with profitability, and their share prices have fallen by more than 85% over the past three years.
Those companies that are able to perform well and dominate the niche when federal legalization takes place -- or at least, do so a few years from now when the economy should be in better shape -- could be amazing investments. But predicting which cannabis companies will thrive is no easy task. And there's a real prospect that they all could struggle.
Should you invest in pot stocks right now?
While Curaleaf trades at less than 2 times revenue and looks like it could be a great buy, pot stocks are only suitable for investors with a high tolerance for risk. Considering some of the mammoth share price declines that companies in the industry have experienced, these are the types of investments you need to be able to afford to just leave alone for many years. If you think you may need to make use of the funds you're investing in the near to medium term, you'd likely be better off opting for safer stocks, because there's a lot of doubt hanging over the cannabis industry, and there's no clear indication of when pot stocks might recover.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | No clarity about when federal legalization will happen, if ever Analysts at MarketsandMarkets Research project that between now and 2027, the global cannabis market will grow at a compound annual growth rate of 24% reaching a value of more than $82 billion. For example, while multi-state operator Curaleaf Holdings (OTC: CURLF) has reported positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the past, it has been racking up net losses. Those companies that survive could prove amazing investments If federal legalization were to pass, there would be opportunities for significant economies of scale for producers such as Curaleaf, letting them cut their unit costs and potentially become profitable. | While more U.S. states are likely to legalize marijuana in the future or expand from medical use to adult recreational use, full federal legalization may not happen for years, if ever. In the meantime, losses continue to mount The longer that there is no movement in Congress on legalization, the longer marijuana companies will struggle to generate growth and stay out of the red. CURLF Revenue (Quarterly YoY Growth) data by YCharts. | While more U.S. states are likely to legalize marijuana in the future or expand from medical use to adult recreational use, full federal legalization may not happen for years, if ever. If you think you may need to make use of the funds you're investing in the near to medium term, you'd likely be better off opting for safer stocks, because there's a lot of doubt hanging over the cannabis industry, and there's no clear indication of when pot stocks might recover. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | Those two Canadian marijuana producers were once seen as industry leaders, but they have continually struggled with profitability, and their share prices have fallen by more than 85% over the past three years. Should you invest in pot stocks right now? Simply click here to get the full story now. |
36401.0 | 2023-04-04 00:00:00 UTC | Better Buy: Aurora Cannabis vs. Green Thumb Industries | ACB | https://www.nasdaq.com/articles/better-buy%3A-aurora-cannabis-vs.-green-thumb-industries | nan | nan | Marijuana stocks have performed poorly over the last two years. But, like any fledging industry, the cannabis industry has its trials.
However, over the long term, the industry has a significant growth runway ahead. Cannabis analytics firm BDSA estimates that global cannabis sales will reach $57 billion by 2026, a 13% annual growth forecast from $30 billion in 2021, with bulk of this growth expected to be driven by the Canadian and American markets. Investment opportunities seem lucrative, and investors with a higher risk appetite might stand to profit handsomely in the long run in this volatile industry.
Canada-based Aurora Cannabis (NASDAQ: ACB) and Chicago-based Green Thumb Industries (OTC: GTBIF), a U.S. multi-state operator (MSO), are two of the most popular names in the industry. But let's find out which one is positioned to capture this growth and worth investing in.
Image source: Getty Images.
The case for Aurora Cannabis
Aurora Cannabis, once a popular name in the Canadian cannabis industry, has seen some harsh days over the past couple of years. Some of its reckless decisions, such as going on an acquisition spree, have put an immense burden on its balance sheet when these acquisitions bled money.
However, in its most recent quarterly results, the company met its target of becoming EBITDA positive after failing repeatedly in the previous quarters. In its fiscal 2023 second quarter, adjusted EBITDA came in at 1.4 million Canadian dollars, a sizable improvement over the prior-year period's adjusted EBITDA loss of CA$7.1 million.
Unfortunately, EBITDA is not a true measure of profit, and the market wasn't impressed. Overall, Aurora still recorded a net loss of CA$67 million for the quarter. The company is still losing money which is a major point of concern. It spent CA$60.6 million in operating activities in the quarter, higher than it did in the prior quarter.
Aurora spent CA$180 million in cash while raising CA$77.6 million, primarily issuing stock, which doesn't sit well with investors. This is often a sign of tough times given the high interest rate environment and debt finacning was kept at a minimum. Aurora will have a tough time entering the U.S. market if U.S. federal legalization occurs unless it has solid financial support.
Aurora's shares have fallen 99% in value in the last five years. I see no reason for its shares to bounce back anytime sooner unless the company generates profits and positive cash flow.
The case for Green Thumb Industries
U.S. cannabis companies have proven that though federal legalization is important, the state markets can suffice to make them profitable. One such multi-state player is Green Thumb Industries which has quadrupled its revenue from $216 million in 2019 to $1 billion in 2022. Note that this outstanding growth is just from the limited legal state markets.
The company has aggressively expanded from 39 stores in eight states in 2019 to 77 stores in 15 states. Green Thumb has also managed to be consistently profitable by reporting positive net income based on generally accepted accounting principles (GAAP) for nine consecutive quarters. In the most recent fourth quarter, the company's adjusted net income of $12 million also was impressive. Revenue jumped 6% year over year to $259 million.
Industry experts predict more states like Pennsylvania, Florida, Maryland, Ohio, and Minnesota could also legalize cannabis this year. This means more opportunities for Green Thumb. It operates a significant number of stores under the Rise brand in these states.
Moreover, these states are limited license markets, meaning regulators are cautious about dishing out cannabis trade licenses freely. Companies who already hold these licenses have key advantages and could build a loyal customer base.
Green Thumb is financially robust, with $178 million in cash at the end of the year.
Which is the better choice?
When choosing between these two marijuana stocks, Green Thumb Industries is definitely the better buy. Aurora Cannabis has weaker fundamentals than domestic cannabis growers. The MSO is already profitable and has a strong presence in the U.S. cannabis market. Moreover, if cannabis is legalized at the federal level in the United States over the next decade or so, domestic producers like Green Thumb will have an upper hand.
Aurora, on the other hand, lacks significant financial strength to expand into U.S. markets. Given the fierce competition, Aurora could find itself left behind in the pack when it comes to establishing itself in the burgeoning U.S. market.
Wall Street analysts believe Green Thumb's stock is a strong buy, with a potential upside of 98% over the next year. Aurora, on the other hand, has a consensus hold rating and a 60% upside potential over the same time period.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Sushree Mohanty has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Green Thumb Industries. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Canada-based Aurora Cannabis (NASDAQ: ACB) and Chicago-based Green Thumb Industries (OTC: GTBIF), a U.S. multi-state operator (MSO), are two of the most popular names in the industry. Investment opportunities seem lucrative, and investors with a higher risk appetite might stand to profit handsomely in the long run in this volatile industry. The case for Green Thumb Industries U.S. cannabis companies have proven that though federal legalization is important, the state markets can suffice to make them profitable. | Canada-based Aurora Cannabis (NASDAQ: ACB) and Chicago-based Green Thumb Industries (OTC: GTBIF), a U.S. multi-state operator (MSO), are two of the most popular names in the industry. The case for Aurora Cannabis Aurora Cannabis, once a popular name in the Canadian cannabis industry, has seen some harsh days over the past couple of years. In its fiscal 2023 second quarter, adjusted EBITDA came in at 1.4 million Canadian dollars, a sizable improvement over the prior-year period's adjusted EBITDA loss of CA$7.1 million. | Canada-based Aurora Cannabis (NASDAQ: ACB) and Chicago-based Green Thumb Industries (OTC: GTBIF), a U.S. multi-state operator (MSO), are two of the most popular names in the industry. The case for Aurora Cannabis Aurora Cannabis, once a popular name in the Canadian cannabis industry, has seen some harsh days over the past couple of years. The case for Green Thumb Industries U.S. cannabis companies have proven that though federal legalization is important, the state markets can suffice to make them profitable. | Canada-based Aurora Cannabis (NASDAQ: ACB) and Chicago-based Green Thumb Industries (OTC: GTBIF), a U.S. multi-state operator (MSO), are two of the most popular names in the industry. The case for Green Thumb Industries U.S. cannabis companies have proven that though federal legalization is important, the state markets can suffice to make them profitable. Note that this outstanding growth is just from the limited legal state markets. |
36402.0 | 2023-04-03 00:00:00 UTC | Why Aurora Cannabis Stock Is Slumping Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-stock-is-slumping-today | nan | nan | What happened
Canadian marijuana company Aurora Cannabis (NASDAQ: ACB) is having another bad day. The pot seller's shares were down by a noteworthy 4.34% on moderate volume as of 2:05 p.m. ET on Monday.
Since the start of the year, Aurora's stock has now shed 27.5% of its value, and the share price has fallen well below the Nasdaq's $1 bid requirement, triggering a noncompliance notice from the exchange last month.
So what
What's behind this latest dip? Aurora's stock appears to be responding negatively to the news that OPEC nations plan on reducing oil output by approximately 1.2 million barrels per day in May. In response to this news, the benchmark Brent crude spiked to almost $85 a barrel.
While Canada produces the bulk of its energy from hydro sources, elevated oil prices will still affect energy costs for the country's cannabis producers. Most of these companies require enormous amounts of energy to cultivate their plants in high-tech indoor facilities.
Perhaps more importantly, though, higher oil prices will undoubtedly have negative downstream effects on discreationary spending by consumers, especially international tourists. That's unwelcome news for companies like Aurora that derive a large portion of sales from discretionary recreational products.
Now what
Is the stock a buy on this latest dip? Although Aurora has been leaning more heavily into the less economically sensitive medical marijuana category of late, it's hard to see how the company can avoid a reverse split at this point. Pure-play growth stocks have been trending lower in this risk-averse market, and this simply doesn't bode well for risk-laden cannabis stocks like Aurora.
As such, investors are probably best served by watching this story unfold from the safety of the sidelines.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Canadian marijuana company Aurora Cannabis (NASDAQ: ACB) is having another bad day. Since the start of the year, Aurora's stock has now shed 27.5% of its value, and the share price has fallen well below the Nasdaq's $1 bid requirement, triggering a noncompliance notice from the exchange last month. Aurora's stock appears to be responding negatively to the news that OPEC nations plan on reducing oil output by approximately 1.2 million barrels per day in May. | What happened Canadian marijuana company Aurora Cannabis (NASDAQ: ACB) is having another bad day. Since the start of the year, Aurora's stock has now shed 27.5% of its value, and the share price has fallen well below the Nasdaq's $1 bid requirement, triggering a noncompliance notice from the exchange last month. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | What happened Canadian marijuana company Aurora Cannabis (NASDAQ: ACB) is having another bad day. Aurora's stock appears to be responding negatively to the news that OPEC nations plan on reducing oil output by approximately 1.2 million barrels per day in May. Pure-play growth stocks have been trending lower in this risk-averse market, and this simply doesn't bode well for risk-laden cannabis stocks like Aurora. | What happened Canadian marijuana company Aurora Cannabis (NASDAQ: ACB) is having another bad day. Aurora's stock appears to be responding negatively to the news that OPEC nations plan on reducing oil output by approximately 1.2 million barrels per day in May. Simply click here to get the full story now. |
36403.0 | 2023-03-30 00:00:00 UTC | Don't Buy the Hype: Aurora Cannabis' Transformation Hasn't Worked | ACB | https://www.nasdaq.com/articles/dont-buy-the-hype%3A-aurora-cannabis-transformation-hasnt-worked | nan | nan | Restructuring and changes in strategy are moves that businesses often deploy when they're facing challenges and headwinds. But that doesn't mean the end result will be a better, more investable company. While Aurora Cannabis (NASDAQ: ACB) has been slashing costs and changing its operations in recent years, the company isn't out of the woods by any stretch. It's not a safe buy -- and it may never be. Here's why investors should tread carefully with this beaten-down pot stock.
The company's pivot toward medical marijuana has resulted in an adjusted earnings profit
Among the biggest moves that Aurora has made in recent years has been to shift its business more toward medical marijuana. Margins are better there, and competition isn't as intense. For the last three months of 2022, the company's medical cannabis net revenue totaled 39.5 million Canadian dollars -- more than double the CA$14.7 million it reported in consumer cannabis net revenue. Four years earlier, in 2018, the gap was much closer, with medical net revenue for the same period totaling just under CA$26 million, while consumer cannabis net revenue was CA$21.6 million.
And the move toward medical may appear to have paid off for the company, as seen in its most recent results, Aurora Cannabis reported a profit under adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). That was an important goal for the company to hit.
It's a big improvement from 2019 when then-CEO Terry Booth promised, "sustained positive EBITDA beginning in fiscal Q4 2019." The company has often failed to come through on its promises, so meeting any kind of goal is a positive for the business. Current CEO Miguel Martin has been cutting costs and has helped get the company to a positive adjusted EBITDA figure.
Aurora has improved, but not nearly enough
Investors should be careful to assign too much importance to adjusted EBITDA because it includes many adjustments and isn't reflective of the company's true profitability. Aurora still posted a loss of CA$67.2 million during the period. A good number for investors to focus on is gross profit, as that tells you how much revenue is left over after paying the cost of sales and what's available to cover overhead.
Last quarter, Aurora's gross profit before fair value adjustment totaled just CA$2.1 million. While its consumer cannabis business dragged that number down as its gross margin was negative, even on the medical cannabis side, Aurora generated a gross profit of just CA$13.1 million on net revenue of CA$39.5 million, for a margin of 33%.
That's simply far too low of a gross profit when you consider that Aurora incurred more in sales and marketing expenses than that -- CA$13.2 million -- during the period. And that's not even factoring in general and admin costs, which were more than double that figure, at CA$27.1 million.
Investors need to be careful with the company's adjusted calculations, because they aren't standardized accounting numbers, meaning there's a lot of leeway for Aurora to adjust them how it deems fit. But by doing so, it can paint a misleading picture of how the business is doing.
The business is still facing big risks ahead
Aurora looks to be moving away from the consumer cannabis business because of low margins. But by doing so, it's going to be more difficult for the business to generate growth. International cannabis markets are still fairly small and won't offer Aurora the type of growth it needs to attract many investors. At the same time, the company is still burning through cash and incurring losses along the way.
Even if you can stomach the risk and are willing to buy Aurora's stock, there's simply not a whole lot of reason to do so. There are better, high-risk stocks out there that at least have a decent chance of making you a good profit. In the case of Aurora, it isn't likely to become a better buy anytime soon. It has lost 94% of its value in three years, and although it has restructured its business, there are still plenty of reasons to steer clear of this pot stock.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | While Aurora Cannabis (NASDAQ: ACB) has been slashing costs and changing its operations in recent years, the company isn't out of the woods by any stretch. And the move toward medical may appear to have paid off for the company, as seen in its most recent results, Aurora Cannabis reported a profit under adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). A good number for investors to focus on is gross profit, as that tells you how much revenue is left over after paying the cost of sales and what's available to cover overhead. | While Aurora Cannabis (NASDAQ: ACB) has been slashing costs and changing its operations in recent years, the company isn't out of the woods by any stretch. For the last three months of 2022, the company's medical cannabis net revenue totaled 39.5 million Canadian dollars -- more than double the CA$14.7 million it reported in consumer cannabis net revenue. Four years earlier, in 2018, the gap was much closer, with medical net revenue for the same period totaling just under CA$26 million, while consumer cannabis net revenue was CA$21.6 million. | While Aurora Cannabis (NASDAQ: ACB) has been slashing costs and changing its operations in recent years, the company isn't out of the woods by any stretch. The company's pivot toward medical marijuana has resulted in an adjusted earnings profit Among the biggest moves that Aurora has made in recent years has been to shift its business more toward medical marijuana. For the last three months of 2022, the company's medical cannabis net revenue totaled 39.5 million Canadian dollars -- more than double the CA$14.7 million it reported in consumer cannabis net revenue. | While Aurora Cannabis (NASDAQ: ACB) has been slashing costs and changing its operations in recent years, the company isn't out of the woods by any stretch. While its consumer cannabis business dragged that number down as its gross margin was negative, even on the medical cannabis side, Aurora generated a gross profit of just CA$13.1 million on net revenue of CA$39.5 million, for a margin of 33%. That's simply far too low of a gross profit when you consider that Aurora incurred more in sales and marketing expenses than that -- CA$13.2 million -- during the period. |
36404.0 | 2023-03-29 00:00:00 UTC | 2 Reasons to Buy Aurora Cannabis and 1 Reason to Sell It | ACB | https://www.nasdaq.com/articles/2-reasons-to-buy-aurora-cannabis-and-1-reason-to-sell-it | nan | nan | Aurora Cannabis (NASDAQ: ACB) is one of the few Canadian cannabis retailers that is still seeing revenue growth, despite price compression and illegal sales negatively impacting the industry. The company is still losing money, but it appears to be edging its way toward profitability.
Aurora's path to success includes branching out to international markets while focusing more on medical marijuana sales at home.
Here are two reasons to buy Aurora stock and one to sell it.
Reason to buy No. 1: Aurora is moving toward profitability
In the second quarter of 2023, Aurora credited reduced selling, administrative, and general expenses, as well as increased revenue, for 1.4 million Canadian dollars (roughly $1.03 million) in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). That showed significant progress, as the company lost CA$7.4 million in adjusted EBITDA in the prior quarter and CA$7.1 million in adjusted EBITDA in the same period a year ago.
The growth in revenues was the biggest reason for positive adjusted EBITDA. Aurora reported revenue of CA$61.7 million in the quarter, up 25% sequentially and 2% year over year. The growth came across the company's various segments, as well as a full quarter of revenue from Bevo Farms, a plant propagation company that Aurora bought in August for $45 million, plus up to CA$12 million for hitting certain milestones over the next three years.
Bevo has the potential to be a great long-term value add for Aurora. The company, based in Langley, British Columbia, supplies vegetables and ornamental plants throughout North America. In the 12 months ending June 30, 2022, Bevo reported revenue of CA$39 million and adjusted EBITDA of CA$9 million.
There's another reason Aurora's revenue continues to grow: While other Canadian cannabis companies are fighting to gain market share in the country's adult-use sales, Aurora is instead focusing on growing medical marijuana sales.
In the second quarter, the company added to its No. 1 market share in Canadian medical marijuana with CA$39.5 million in revenue, up 25% over the prior quarter.
This isn't by accident. Two years ago, CEO Miguel Martin told Business Insider that he saw better margins for his company in medical marijuana sales, saying:
The medical business in my mind is the most exciting and potentially profitable piece of the entire cannabis business. The fact that everyone is just so consumed by this idea that only rec cannabis matters, I think, is a fallacy.
Reason to buy No. 2: The company's international presence
Aurora is in 11 international markets. It holds the No. 1 market share in dry flower sales in Poland, with a population of 38 million, and the No. 2 share in Germany, whose population is 83 million. The company also has a strong presence in Australia, Great Britain, France, and The Netherlands.
All those markets are expected to grow, especially Germany, which is expected to move to adult-use cannabis sales soon, and that move could begin a domino effect in the rest of Europe. If that happens, Aurora already has the infrastructure in place to benefit.
Cannabis research company BDSA said that it expects international markets to see big growth this year and in the coming years, with Germany among the top five contributors to global sales through 2026.
Reason to sell No. 1: The company could be delisted from the Nasdaq
Aurora's shares are down more than 82% over the past year and over 23% so far in 2023. The company got word on March 24 that it is facing possible delisting from the Nasdaq because Aurora's shares closed at below $1 a share over 30 consecutive business days.
The company has 180 days -- until Sept. 30 -- to regain compliance, which would require its shares going for $1 or more per share for 10 consecutive business days. If it doesn't, that would be seen as a disaster for the company because selling shares is one of the few ways cannabis companies use to raise cash. If it was dropped from the Nasdaq, it would likely still be listed on the Toronto Stock Exchange and over the counter in the U.S., but it would attract fewer investors.
To avoid being delisted, the company might consider a reverse stock-split to bump up the share price, which is something else that would turn off investors.
While Aurora is in a relatively decent cash position, with CA$258.7 million as of the second quarter of fiscal 2023, being delisted would make it more difficult to raise funds, and its cash in hand fell CA$179 million through the first six months of fiscal 2023.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Jim Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis (NASDAQ: ACB) is one of the few Canadian cannabis retailers that is still seeing revenue growth, despite price compression and illegal sales negatively impacting the industry. Aurora's path to success includes branching out to international markets while focusing more on medical marijuana sales at home. The company, based in Langley, British Columbia, supplies vegetables and ornamental plants throughout North America. | Aurora Cannabis (NASDAQ: ACB) is one of the few Canadian cannabis retailers that is still seeing revenue growth, despite price compression and illegal sales negatively impacting the industry. That showed significant progress, as the company lost CA$7.4 million in adjusted EBITDA in the prior quarter and CA$7.1 million in adjusted EBITDA in the same period a year ago. In the 12 months ending June 30, 2022, Bevo reported revenue of CA$39 million and adjusted EBITDA of CA$9 million. | Aurora Cannabis (NASDAQ: ACB) is one of the few Canadian cannabis retailers that is still seeing revenue growth, despite price compression and illegal sales negatively impacting the industry. That showed significant progress, as the company lost CA$7.4 million in adjusted EBITDA in the prior quarter and CA$7.1 million in adjusted EBITDA in the same period a year ago. The growth came across the company's various segments, as well as a full quarter of revenue from Bevo Farms, a plant propagation company that Aurora bought in August for $45 million, plus up to CA$12 million for hitting certain milestones over the next three years. | Aurora Cannabis (NASDAQ: ACB) is one of the few Canadian cannabis retailers that is still seeing revenue growth, despite price compression and illegal sales negatively impacting the industry. The growth in revenues was the biggest reason for positive adjusted EBITDA. There's another reason Aurora's revenue continues to grow: While other Canadian cannabis companies are fighting to gain market share in the country's adult-use sales, Aurora is instead focusing on growing medical marijuana sales. |
36405.0 | 2023-03-21 00:00:00 UTC | Why Pot Stocks Are Glowing Green Today | ACB | https://www.nasdaq.com/articles/why-pot-stocks-are-glowing-green-today | nan | nan | What happened
Marijuana stocks, on balance, were on the mend Tuesday after a dreadful Monday, with Canadian pot companies having a particularly strong session. At the close of trading, Aurora Cannabis (NASDAQ: ACB) stock was up by 9.3%, Canopy Growth (NASDAQ: CGC) shares were higher by 5.9%, and Organigram Holdings (NASDAQ: OGI) was in the green by 9.2%.
On Monday, Aurora tumbled by 9%, Canopy Growth shares fell by 5%, and Organigram sank by 4.9%. Investors fled these risk-laden growth stocks in response to the ongoing banking crisis and a general aversion to risk by investors ahead of this week's Federal Reserve meeting. Now that private and public entities have stepped up to prevent a potential 2008-style global financial crisis, they appear to be attracting bargain hunters.
Image Source: Getty Images.
So what
Why are Canadian marijuana stocks reacting to banking and U.S. interest rate headwinds? Aurora, Canopy Growth, and Organigram sell products that are largely discretionary in nature, with the exception being medical marijuana. If the Federal Reserve's aggressive rate-hiking policy or a global banking crisis tip the U.S. economy into a full-blown recession, consumers may have no other choice but to rein in their spending on products like recreational marijuana. That scenario would obviously be bad news for these already struggling cannabis cultivators.
Now what
Are any of these small-cap marijuana stocks worth buying right now? That's a tough call. Aurora and Organigram are both trading under the Nasdaq's $1 minimum share price requirement. This unfavorable situation may force both companies to execute reverse stock splits before year's end. So, even though Aurora and Organigram both screen as deeply undervalued equities, it might be wise to wait until this key risk factor is off the table before buying shares.
Unfortunately, Canopy suffers from a similar problem. Over the past 15 months, its shares have fallen by a staggering 77.4%. As a result, the pot titan's stock has fallen to under $2 a share at the time of this writing. If management can't reverse that trend soon, Canopy may be headed toward a reverse stock split as well. As such, this low-priced pot stock doesn't exactly jump off the page as a screaming buy.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Organigram. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | At the close of trading, Aurora Cannabis (NASDAQ: ACB) stock was up by 9.3%, Canopy Growth (NASDAQ: CGC) shares were higher by 5.9%, and Organigram Holdings (NASDAQ: OGI) was in the green by 9.2%. If the Federal Reserve's aggressive rate-hiking policy or a global banking crisis tip the U.S. economy into a full-blown recession, consumers may have no other choice but to rein in their spending on products like recreational marijuana. So, even though Aurora and Organigram both screen as deeply undervalued equities, it might be wise to wait until this key risk factor is off the table before buying shares. | At the close of trading, Aurora Cannabis (NASDAQ: ACB) stock was up by 9.3%, Canopy Growth (NASDAQ: CGC) shares were higher by 5.9%, and Organigram Holdings (NASDAQ: OGI) was in the green by 9.2%. Aurora, Canopy Growth, and Organigram sell products that are largely discretionary in nature, with the exception being medical marijuana. If the Federal Reserve's aggressive rate-hiking policy or a global banking crisis tip the U.S. economy into a full-blown recession, consumers may have no other choice but to rein in their spending on products like recreational marijuana. | At the close of trading, Aurora Cannabis (NASDAQ: ACB) stock was up by 9.3%, Canopy Growth (NASDAQ: CGC) shares were higher by 5.9%, and Organigram Holdings (NASDAQ: OGI) was in the green by 9.2%. What happened Marijuana stocks, on balance, were on the mend Tuesday after a dreadful Monday, with Canadian pot companies having a particularly strong session. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | At the close of trading, Aurora Cannabis (NASDAQ: ACB) stock was up by 9.3%, Canopy Growth (NASDAQ: CGC) shares were higher by 5.9%, and Organigram Holdings (NASDAQ: OGI) was in the green by 9.2%. On Monday, Aurora tumbled by 9%, Canopy Growth shares fell by 5%, and Organigram sank by 4.9%. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. |
36406.0 | 2023-03-09 00:00:00 UTC | Here's How Aurora Cannabis Finally Posted an Adjusted EBITDA Profit | ACB | https://www.nasdaq.com/articles/heres-how-aurora-cannabis-finally-posted-an-adjusted-ebitda-profit | nan | nan | Aurora Cannabis (NASDAQ: ACB) hit a long-awaited milestone in its most recent earnings results: adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. It's not a true accounting profit, but it is what many cannabis companies aim for.
But what does that really mean for investors, and is it a big deal? Here's a closer look at how Aurora achieved an adjusted EBITDA profit, and whether that should impact your decision to buy the stock or not.
What adjusted EBITDA is and isn't
Having an adjusted EBITDA profit isn't the same as reporting a positive net income number. There is no reporting standard for adjusted EBITDA per generally accepted accounting principles (GAAP).
For investors, this means that the company has significant leeway into what goes into the calculation. Since it's a non-GAAP (adjusted) number, a company can make adjustments to that number that it otherwise wouldn't be able to make to net income.
And so while it is an adjusted earnings calculation, it isn't a metric that may be all that comparable from one company to the next.
These are all the adjustments to earnings that Aurora made to arrive at adjusted EBITDA
Aurora reported its second-quarter results in February and for the period ending Dec. 31, 2022, its adjusted EBITDA profit totaled 1.4 million Canadian dollars, compared to a loss of CA$7.1 million in the prior-year period. However, the company's actual reported net loss for the period was CA$67.2 million. Here's a look at how that morphed into an adjusted EBITDA profit:
Image source: Company filings. Chart by author.
The one thing that stands out to me is the broad range of adjustments here. There are so many potential categories where Aurora can make an adjustment and back out costs. It becomes difficult to know how the company performed given all of these adjustments. And unfortunately, this is the norm in the cannabis industry and that means evaluating companies based on adjusted EBITDA can be incredibly challenging.
Investors are better off following cash flow
Cannabis companies can have volatile earnings due to changes in fair value, which can heavily impact the bottom line; in the chart above, fair value and impairment was the largest category and had the biggest impact on adjusted EBITDA. As a result, a case can be made that adjusted earnings are important. But given the number of adjustments Aurora has made to adjusted EBITDA, I'd also argue the metric still isn't useful, given how much noise there is in that final number.
To get a better idea of how a company is doing, investors may be better off looking at cash flow. This gives you insight into how much money is flowing into and out of the business. And cash is an important consideration, especially for marijuana companies, because being low on cash may mean that a business needs to raise money via debt or issuing shares (and that results in dilution for shareholders).
During its most recent quarter, Aurora used up CA$60.6 million from its day-to-day operating activities, which is far worse than the CA$21.6 million it used up in the same period last year. When put within that context, the adjusted EBITDA profit doesn't look as impressive anymore.
Aurora isn't a buy based on its recent results
Achieving adjusted EBITDA may be important for the company to hit that milestone and to show that it came through on its promise. But I would be more concerned about the company's worsening cash burn, or that its net revenue of CA$61.7 million rose just 2% year over year.
It's hard to make a case for buying shares of Aurora as this has been a disastrous pot stock to own; in five years, it has fallen an incredible 99% in value. Adjusted profitability or not, there's little doubt in my mind this stock is heading for another reverse stock split as its share price isn't likely to rebound anytime soon.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis (NASDAQ: ACB) hit a long-awaited milestone in its most recent earnings results: adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. Aurora isn't a buy based on its recent results Achieving adjusted EBITDA may be important for the company to hit that milestone and to show that it came through on its promise. It's hard to make a case for buying shares of Aurora as this has been a disastrous pot stock to own; in five years, it has fallen an incredible 99% in value. | Aurora Cannabis (NASDAQ: ACB) hit a long-awaited milestone in its most recent earnings results: adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. What adjusted EBITDA is and isn't Having an adjusted EBITDA profit isn't the same as reporting a positive net income number. Aurora isn't a buy based on its recent results Achieving adjusted EBITDA may be important for the company to hit that milestone and to show that it came through on its promise. | Aurora Cannabis (NASDAQ: ACB) hit a long-awaited milestone in its most recent earnings results: adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. What adjusted EBITDA is and isn't Having an adjusted EBITDA profit isn't the same as reporting a positive net income number. Since it's a non-GAAP (adjusted) number, a company can make adjustments to that number that it otherwise wouldn't be able to make to net income. | Aurora Cannabis (NASDAQ: ACB) hit a long-awaited milestone in its most recent earnings results: adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. What adjusted EBITDA is and isn't Having an adjusted EBITDA profit isn't the same as reporting a positive net income number. These are all the adjustments to earnings that Aurora made to arrive at adjusted EBITDA Aurora reported its second-quarter results in February and for the period ending Dec. 31, 2022, its adjusted EBITDA profit totaled 1.4 million Canadian dollars, compared to a loss of CA$7.1 million in the prior-year period. |
36407.0 | 2023-03-09 00:00:00 UTC | 3 Cannabis Stocks to Buy and Hold for the Next 10 Years | ACB | https://www.nasdaq.com/articles/3-cannabis-stocks-to-buy-and-hold-for-the-next-10-years-3 | nan | nan | One sector that's undoubtedly gone from bubble territory to flat-out deflated is cannabis. Many producers saw valuations skyrocket upon the federal legalization of cannabis in Canada in late 2018. Of course, the ensuing bubble, which lasted for most of 2018 and some of 2019, is a mania many have moved past.
But this sector has also seen impressive uptake in recent years, growing at a respectable rate, with valuations that are (finally) starting to jibe with reality. There are some great growth opportunities to be had for investors with the patience to avoid looking at their portfolios on a day-to-day basis.
Here are three of the top cannabis stocks I think are worth buying and holding for the next decade.
Curaleaf: A U.S. MSO with impressive revenue growth
U.S.-based multi-state operators (MSOs) like Curaleaf (OTC: CURLF) have certainly had a rough go over the past two years. Trading above $16 per share in February 2021, Curaleaf stock now trades under $4 per share.
However, over the past two years, Curaleaf has seen some very impressive growth. Revenue has more than doubled over this period, with gross profits increasing by a similar amount. The company hasn't been able to turn a net profit, but its earnings before interest and taxes have increased, albeit at a slower rate than revenue growth.
Curaleaf has proven to be a sector outperformer, for what it's worth. Compared to the AdvisorShares Pure U.S. Cannabis ETF Curaleaf's one-year decline of approximately 40% is much better than the more than 65% decline seen in this exchange-traded fund over the past year.
As the U.S. adult-use cannabis market continues to grow, and more states legalize cannabis for recreational use, Curaleaf stands to benefit perhaps the most from this growth. That's because the company's vertically integrated business model is scalable, and has already shown proof of concept with respect to its previous rollouts. For example, Connecticut's adult-use market is estimated to be worth over $215 million in the first year. As Curaleaf continues to expand into new markets, I anticipate the company's growth trajectory is likely to remain intact.
Canopy Growth: A Canadian cannabis company with a valuation that makes sense
Canada-based Canopy Growth (NASDAQ: CGC) is the first of two foreign stocks included on this list. As mentioned, Canada legalized cannabis federally for recreational use in 2018. Accordingly, Canopy Growth (formerly Tweed) stock saw an incredible surge on this news, given its roots in the Great White North.
Unfortunately for investors who bought in near the peak hysteria, realized growth in terms of recreational use hasn't really panned out according to initial estimates. Previous estimates in 2017 called for the Canadian cannabis market to be between $4.2 billion Canadian dollars and CA$6.2 billion in 2018. Fast forward five years later, and Canadians only spent CA$4.5 billion in 2022 (near the low point of the initial range five years ago).
It's no wonder then that Canopy Growth and its Canadian peers have been slammed over the past few years. That said, while Canopy's previous valuation was grossly exaggerated, its current valuation seems a lot more palatable. Trading at around 3.2 times sales (compared to 7.7 times at the end of 2021), the company has felt its fair share of valuation compression due to sector-specific and macro forces alike.
As one of the largest cannabis companies in Canada, with some exposure to the U.S. market, Canopy Growth provides investors with perhaps one of the most stable options among the generally highly volatile international players in this segment. That's because this is a company with valuation and growth metrics that continue to remain robust, despite declining sector-wide numbers. Relative to its peers, Canopy remains one of the highest-quality cannabis companies in terms of fundamentals right now.
Aurora Cannabis: Great geographical diversification
Another leading Canadian cannabis option, Aurora Cannabis (NASDAQ: ACB), has also been a very unprofitable investment for its long-term shareholders in recent years. Many of the same issues and headwinds apply.
That said, I think Aurora is among the more unique players worth a look at for those seeking multibagger potential in the coming decade. This is a company with a strong presence in its domestic Canadian market. However, from a geographical and product-specific perspective, Aurora has done a good job of diversifying its offerings in a number of ways.
The company serves both wholesale and retail markets in the European Union, Australia, the Caribbean, South America, and Israel. In the U.S. market, Aurora has taken significant market share in the niche hemp-derived CBD market. And in Canada, Aurora has a significant market share in both retail and wholesale channels.
As far as vertical integration goes, Aurora is among the best options in this sector. One of the aspects I like best about the company's business model is its increased focus on value-added products such as oils, capsules, edibles, extracts, and the like. If legalization ever takes hold in the U.S., Aurora is a company with a product and brand portfolio that's able to serve many market segments. That's something for long-term investors to think about.
If you don't mind a little fire, these stocks could spark your portfolio
Overall, the cannabis sector remains a highly speculative one. That said, as the saying goes, no risk, no reward.
Long-term investors looking to add a small slice of portfolio exposure to this sector may want to dive into these three options. They're each unique players in their respective markets, and ones I think could lead the way in terms of capital appreciation, if and when the next bull market begins.
10 stocks we like better than Curaleaf
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis: Great geographical diversification Another leading Canadian cannabis option, Aurora Cannabis (NASDAQ: ACB), has also been a very unprofitable investment for its long-term shareholders in recent years. But this sector has also seen impressive uptake in recent years, growing at a respectable rate, with valuations that are (finally) starting to jibe with reality. The company hasn't been able to turn a net profit, but its earnings before interest and taxes have increased, albeit at a slower rate than revenue growth. | Aurora Cannabis: Great geographical diversification Another leading Canadian cannabis option, Aurora Cannabis (NASDAQ: ACB), has also been a very unprofitable investment for its long-term shareholders in recent years. As the U.S. adult-use cannabis market continues to grow, and more states legalize cannabis for recreational use, Curaleaf stands to benefit perhaps the most from this growth. As mentioned, Canada legalized cannabis federally for recreational use in 2018. | Aurora Cannabis: Great geographical diversification Another leading Canadian cannabis option, Aurora Cannabis (NASDAQ: ACB), has also been a very unprofitable investment for its long-term shareholders in recent years. Canopy Growth: A Canadian cannabis company with a valuation that makes sense Canada-based Canopy Growth (NASDAQ: CGC) is the first of two foreign stocks included on this list. As one of the largest cannabis companies in Canada, with some exposure to the U.S. market, Canopy Growth provides investors with perhaps one of the most stable options among the generally highly volatile international players in this segment. | Aurora Cannabis: Great geographical diversification Another leading Canadian cannabis option, Aurora Cannabis (NASDAQ: ACB), has also been a very unprofitable investment for its long-term shareholders in recent years. However, over the past two years, Curaleaf has seen some very impressive growth. It's no wonder then that Canopy Growth and its Canadian peers have been slammed over the past few years. |
36408.0 | 2023-03-02 00:00:00 UTC | Here's the Single Best Argument for Buying Aurora Cannabis Stock Right Now | ACB | https://www.nasdaq.com/articles/heres-the-single-best-argument-for-buying-aurora-cannabis-stock-right-now | nan | nan | Suppose you bought $10,000 of Aurora Cannabis (NASDAQ: ACB) stock five years ago and held onto those shares. How much would your initial investment be worth today? Around $91. Ouch.
With that abysmal performance, you might think making a case for investing in Aurora Cannabis today would be an exercise in futility. But that's not necessarily so. Here's the single best argument for buying Aurora Cannabis stock right now.
Four important words
I think the best argument for investing in Aurora Cannabis can be summed up in four words: Brighter days are ahead. If these four words are true, buying the heavily beaten-down marijuana stock could pay off nicely. But are they true?
There are definitely some reasons to believe that the worst is over for Aurora. For example, the company achieved positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in its latest quarter. While that's not the same thing as true profitability, it's nonetheless a huge milestone for Aurora that's taken a long time to happen.
This positive adjusted EBITDA shouldn't be a fluke, either. Aurora Cannabis CEO Miguel Martin stated in the company's fiscal 2023 second-quarter conference call, "We are confident that we can deliver positive adjusted EBITDA on an annualized basis going forward." Martin acknowledged, though, that there could be some quarters when adjusted EBITDA dips into negative territory due to the volatility of the cannabis industry.
Delivering positive adjusted EBITDA is certainly a step in the right direction for Aurora. However, that by itself isn't a compelling reason to consider buying the stock.
Big potential catalysts in Europe
On the other hand, Aurora's big potential catalysts that could be on the way in Europe could make the stock much more attractive. In particular, developments in Germany could lead to huge opportunities for the company.
Martin said in the recent quarterly call that Germany should provide "further clarity around recreational legalization" this spring. Adult-use cannabis could be legalized in the country as early as 2025. To put this market opportunity into perspective, Germany's population is more than twice the size of Canada's population.
Aurora Cannabis should be in a prime position to be a top player in Germany's recreational cannabis market. It's currently one of only three medical cannabis producers with domestic production licenses in the country. This status seems likely to give Aurora a competitive advantage as Germany moves forward with its recreational cannabis plans.
Even better for Aurora, Germany could be just the tip of the iceberg for European recreational marijuana legalization. Other European Union countries, including the Czech Republic and Poland, could follow in Germany's footsteps.
There's also an opportunity for Aurora to receive a boost in Germany's medical cannabis market. The country has a major effort underway to reduce red tape with its medical-qualification process for medical cannabis. Currently, only around 30% of patients who seek medical cannabis make it all the way through the process. Aurora thinks that some enhancements could be announced relatively soon that could clear the way for more patients to be approved for using medical cannabis products.
Is the best good enough?
My view is that brighter days really could be ahead for Aurora Cannabis with its improved financial position and potential catalysts in Germany and other European countries. I believe this is the best argument for buying the stock right now. But is the best argument a good enough reason to invest? That's a different story.
Aurora continues to lose money. It's not clear at this point how soon the company will turn a profit. Significant headwinds are likely to prevail in the Canadian cannabis market for some time to come. Canada remains the most important market for Aurora.
The strongest argument against buying Aurora Cannabis is that there are too many other stocks that offer more attractive risk-reward profiles. I think that the best case against investing in Aurora outweighs the best case for buying the stock, at least for now.
10 stocks we like better than Aurora Cannabis
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Suppose you bought $10,000 of Aurora Cannabis (NASDAQ: ACB) stock five years ago and held onto those shares. Aurora Cannabis CEO Miguel Martin stated in the company's fiscal 2023 second-quarter conference call, "We are confident that we can deliver positive adjusted EBITDA on an annualized basis going forward." Martin acknowledged, though, that there could be some quarters when adjusted EBITDA dips into negative territory due to the volatility of the cannabis industry. | Suppose you bought $10,000 of Aurora Cannabis (NASDAQ: ACB) stock five years ago and held onto those shares. With that abysmal performance, you might think making a case for investing in Aurora Cannabis today would be an exercise in futility. Here's the single best argument for buying Aurora Cannabis stock right now. | Suppose you bought $10,000 of Aurora Cannabis (NASDAQ: ACB) stock five years ago and held onto those shares. Here's the single best argument for buying Aurora Cannabis stock right now. Aurora Cannabis should be in a prime position to be a top player in Germany's recreational cannabis market. | Suppose you bought $10,000 of Aurora Cannabis (NASDAQ: ACB) stock five years ago and held onto those shares. There's also an opportunity for Aurora to receive a boost in Germany's medical cannabis market. My view is that brighter days really could be ahead for Aurora Cannabis with its improved financial position and potential catalysts in Germany and other European countries. |
36409.0 | 2023-03-01 00:00:00 UTC | 1 Shocking Number That Should Have Investors Thinking Twice About Pot Stocks | ACB | https://www.nasdaq.com/articles/1-shocking-number-that-should-have-investors-thinking-twice-about-pot-stocks | nan | nan | In the Canadian cannabis industry, legalization has made things worse for investors, not better. Companies are dealing with red tape, excise taxes, and more competition. Meanwhile, the black market still undercuts the price of legal pot. It has been a disastrous result for both companies and investors in these businesses. It's a painful but important lesson, one that should remind investors that even if the U.S. were to legalize marijuana, that doesn't mean U.S.-based pot stocks would suddenly rise in value and become great investments.
1 number to put an exclamation mark on the Canadian cannabis industry's struggles
According to law firm Miller Thomson, Canadians have lost 131 billion Canadian dollars investing in the cannabis industry. One of the lawyers at the firm, Larry Ellis, says, "it's an industry that has been created by the Canadian government and frankly set up to fail."
It's hard to argue that point, as marijuana advertising is essentially non-existent in Canada, and even branding faces extreme limitations as packages are standardized and are full of warning labels, with only tiny areas available for logos. Limits on size also mean that recreational consumers can easily find larger quantities on the black market.
The Canadian government hasn't done the cannabis industry any favors either with the limitations it has put into place on marijuana companies. This October will mark the five-year anniversary of Canada legalizing marijuana. And while the industry has grown in size, it hasn't been a good business to get into, as public companies struggle to achieve growth and profitability.
Canadian pot stocks quickly went from boom to bust
Before legalization took place in 2018, there was a lot of hope and optimism that there would be incredible growth and earnings potential. And for that first year following legalization, companies were up big with triple-digit sales growth. But that was short-lived, and now many companies, even the larger ones in the industry, are struggling to keep sales from declining:
CGC Revenue (Quarterly YoY Growth) data by YCharts
Aurora Cannabis and Canopy Growth (NASDAQ: CGC) were among the biggest names in the industry in 2018, and it looked for a while as though they would be dominant forces as it grew. Instead, they have been shutting down facilities and laying off staff, all in an effort to improve their bottom lines. Canopy Growth has even been distancing itself from the Canadian pot market by divesting its Canadian retail operations. Its focus has shifted to the U.S. market, even though it remains illegal at the federal level. And even if the U.S. legalizes pot, that still doesn't mean the industry will be in a better place.
Investors should tread carefully when it comes to pot stocks
The cannabis industry is a dangerous place to invest in; shares of Canopy Growth and Aurora Cannabis are down more than 95% since October 2018. Even if you're willing to hold on for the very long haul, there's no telling which companies will be around years from now. Cannabis companies are burning through cash, and simply hanging on doesn't mean that your investment will get out of the red. Whether you're looking at Canadian or U.S.-based pot stocks, there's plenty of risk with investing in the industry. Even if legalization takes place in the U.S. in the near future, there's no guarantee that multi-state operators won't face the same kind of red tape their Canadian counterparts have been dealing with for years now.
Unless you've got a high risk tolerance, you're better off avoiding pot stocks for the foreseeable future, as things could still get much worse from here.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | It's hard to argue that point, as marijuana advertising is essentially non-existent in Canada, and even branding faces extreme limitations as packages are standardized and are full of warning labels, with only tiny areas available for logos. Canadian pot stocks quickly went from boom to bust Before legalization took place in 2018, there was a lot of hope and optimism that there would be incredible growth and earnings potential. Even if legalization takes place in the U.S. in the near future, there's no guarantee that multi-state operators won't face the same kind of red tape their Canadian counterparts have been dealing with for years now. | 1 number to put an exclamation mark on the Canadian cannabis industry's struggles According to law firm Miller Thomson, Canadians have lost 131 billion Canadian dollars investing in the cannabis industry. But that was short-lived, and now many companies, even the larger ones in the industry, are struggling to keep sales from declining: CGC Revenue (Quarterly YoY Growth) data by YCharts Aurora Cannabis and Canopy Growth (NASDAQ: CGC) were among the biggest names in the industry in 2018, and it looked for a while as though they would be dominant forces as it grew. Investors should tread carefully when it comes to pot stocks The cannabis industry is a dangerous place to invest in; shares of Canopy Growth and Aurora Cannabis are down more than 95% since October 2018. | 1 number to put an exclamation mark on the Canadian cannabis industry's struggles According to law firm Miller Thomson, Canadians have lost 131 billion Canadian dollars investing in the cannabis industry. The Canadian government hasn't done the cannabis industry any favors either with the limitations it has put into place on marijuana companies. Investors should tread carefully when it comes to pot stocks The cannabis industry is a dangerous place to invest in; shares of Canopy Growth and Aurora Cannabis are down more than 95% since October 2018. | The Canadian government hasn't done the cannabis industry any favors either with the limitations it has put into place on marijuana companies. And even if the U.S. legalizes pot, that still doesn't mean the industry will be in a better place. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. |
36410.0 | 2023-03-01 00:00:00 UTC | 1 Thing Aurora Cannabis Investors Should Watch in 2023 | ACB | https://www.nasdaq.com/articles/1-thing-aurora-cannabis-investors-should-watch-in-2023 | nan | nan | Aurora Cannabis (NASDAQ: ACB) is coming off a horrible 2022, in which its share price plummeted 83%. That's what a lack of sales growth and consistent losses will do to a business.
This year is off to a decent start with the company reporting some encouraging results already. And management is optimistic. Investors might want to watch for more mergers and acquisitions, now that the business is in stronger financial shape.
The company finally posted an adjusted profit
In Aurora Cannabis' most recent quarterly results, for the period ending Dec. 31, the company finally delivered on a long-awaited goal: reaching profitability on the basis of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
While not a true accounting profit, adjusted EBITDA earnings are what many cannabis companies strive for. And last quarter, adjusted EBITDA swung to a positive 1.4 million Canadian dollars ($1.03 million), compared with a loss of CA$7.4 million in the previous period. Its net loss, however, was CA$67.2 million, higher than the CA$51.9 million loss it incurred three months earlier.
The company now says it has "one of the strongest balance sheets in the Canadian cannabis industry" with cash on hand totaling CA$310 million as of Feb. 8. While its cash position isn't bad, the company continues to burn through it during its day-to-day operations.
Data by YCharts.
Management hints at mergers and acquisitions ahead
Although Aurora isn't flush with cash, management believes that it's in a much stronger position now than it has been in the past. And in a recent interview with Reuters, CEO Miguel Martin said that its net cash position gives it the opportunity for mergers and acquisitions.
But investors shouldn't expect anything massive or groundbreaking, since Martin also said, "Something that's additive to medical would be more interesting to us than maybe others."
Focusing on medical marijuana has certainly helped improve Aurora's financials. In the past quarter, the company's adjusted gross margin before fair value adjustments was 61% for medical marijuana versus only 20% for consumer cannabis.
The positive takeaway for investors is that a potential acquisition might be one in the medical segment that helps strengthen Aurora's margins and gives it the opportunity to further improve on its bottom line.
Aurora needs a growth catalyst
Aurora has done a good job of improving its bottom line, but the problem remains that this isn't much of a growth stock. Net revenue of CA$61.7 million was barely up from the CA$60.6 million in the prior-year period. The company has been struggling to generate strong, consistent growth, and acquiring a business might be one way to achieve that.
The keys are the scope of the deal and how much of a game changer it will be. After all, while its cash position has improved, having CA$310 million isn't a terribly large amount to work with. And any significant deals will likely have to involve stock, thereby diluting shareholders in the process.
Investors should remain cautious
Shares of Aurora are down 78% in the past 12 months, and although the company has hit adjusted EBITDA profitability, that's not enough of a reason to take a chance on this beaten-down pot stock. There's still lots of risk for Aurora investors today as the losses and cash burn remain.
Any deal that the company will pursue will likely be modest; investors shouldn't get their hopes up for a large transaction that gets the company back to generating high levels of growth. That's why this remains a stock worth watching -- but not buying.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis (NASDAQ: ACB) is coming off a horrible 2022, in which its share price plummeted 83%. The positive takeaway for investors is that a potential acquisition might be one in the medical segment that helps strengthen Aurora's margins and gives it the opportunity to further improve on its bottom line. Investors should remain cautious Shares of Aurora are down 78% in the past 12 months, and although the company has hit adjusted EBITDA profitability, that's not enough of a reason to take a chance on this beaten-down pot stock. | Aurora Cannabis (NASDAQ: ACB) is coming off a horrible 2022, in which its share price plummeted 83%. The company finally posted an adjusted profit In Aurora Cannabis' most recent quarterly results, for the period ending Dec. 31, the company finally delivered on a long-awaited goal: reaching profitability on the basis of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). And last quarter, adjusted EBITDA swung to a positive 1.4 million Canadian dollars ($1.03 million), compared with a loss of CA$7.4 million in the previous period. | Aurora Cannabis (NASDAQ: ACB) is coming off a horrible 2022, in which its share price plummeted 83%. The company finally posted an adjusted profit In Aurora Cannabis' most recent quarterly results, for the period ending Dec. 31, the company finally delivered on a long-awaited goal: reaching profitability on the basis of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). And last quarter, adjusted EBITDA swung to a positive 1.4 million Canadian dollars ($1.03 million), compared with a loss of CA$7.4 million in the previous period. | Aurora Cannabis (NASDAQ: ACB) is coming off a horrible 2022, in which its share price plummeted 83%. Aurora needs a growth catalyst Aurora has done a good job of improving its bottom line, but the problem remains that this isn't much of a growth stock. After all, while its cash position has improved, having CA$310 million isn't a terribly large amount to work with. |
36411.0 | 2023-02-27 00:00:00 UTC | 2 Cheap Growth Stocks to Avoid for Now | ACB | https://www.nasdaq.com/articles/2-cheap-growth-stocks-to-avoid-for-now | nan | nan | When a stock looks like it's on sale, the temptation to buy a handful of shares can be high. But if you can keep your desires at bay when prices look low, particularly with less-than-healthy growth stocks, your portfolio will be a lot healthier in the long run.
On that note, there is a pair of cannabis stocks with low valuations that are likely to be tantalizing for investors who want to see their money multiply in value in a short amount of time. Rather than making their shareholders richer, however, both are likely to be poor purchases. Here's why.
Image source: Getty Images.
1. Tilray Brands
As the biggest recreational marijuana seller in Canada and the largest medicinal operator in the European Union, Tilray Brands (NASDAQ: TLRY) is perhaps the most globalized marijuana business in the world.
So it's a bit shocking that its shares are so inexpensive. If there's going to be a business that reaps the benefits of the global growth of the cannabis industry, Tilray is likely to be it. The average price-to-book (P/B) ratio of the S&P 500 is near 4, but Tilray's P/B is 0.4. That means the stock's valuation is so low that its shares are trading for less money than the company would be worth in a bankruptcy liquidation sale of all its assets.
Obviously, with $433.5 million in cash and equivalents at the ready and only $608.9 million in debt, it won't be going bankrupt anytime soon, but the point is that it's priced at a steep bargain.
Unfortunately, the discount is a bit of a trap for the moment. The issue with Tilray is that its growth appears to be slowing at the same time as its margins are deteriorating and its strategic plans appear to be taking longer than expected. In the last three years, its quarterly revenue only rose by 33.7%. And in the last year, quarterly sales actually shrank by around 5%, reaching $144.1 million in its fiscal second quarter of 2023. Its gross margin is now slightly worse than it was in late 2019.
Management hasn't signaled any plans to slash costs to make up for the decline, and it remains unprofitable. That's a bit concerning, but the even bigger issue is that recreational marijuana legalization is stalled in its favored international markets. Therefore, Tilray's 2021-vintage strategic deal with MedMen to enter the U.S. market in the event of legalization remains on the sidelines even though competitors are already encroaching in newly opened state markets.
Tilray's aspirations to sell to new recreational markets in the E.U. are also in limbo, at least for the moment, dashing hopes that countries there would be moving forward with legalization promptly after 2021. With much-awaited catalysts delayed and financial performance deteriorating, it's best to avoid buying shares of Tilray for now.
2. Aurora Cannabis
Aurora Cannabis (NASDAQ: ACB) is another Canadian cannabis cultivator, and it holds the leading position in its home country's medicinal market, which is a big part of how it was able to bring in CA$61.7 million for its fiscal first quarter of 2023.
In terms of its valuation, Aurora's P/B multiple is 0.7, which puts it at a bit more expensive than Tilray but still firmly in the bargain bin relative to the wider market's average P/B. But it's another case of a stock being cheap because of the headwinds it's experiencing.
Much like with Tilray, it's unprofitable, and despite realizing CA$340 million in cost savings since early 2020, its quarterly net losses aren't trending consistently in the right direction. And its quarterly gross margin has worsened considerably over the last three years, despite the company's strategic transformation plan designed to slash its overhead and take it closer to profitability.
For now, management is working on getting the company to make cash instead of burning it. The issue is that there aren't many effective avenues for doing that in the near term. The Canadian cannabis market is currently experiencing a glut of marijuana that's driving down prices and making it harder for businesses to maintain their margins.
While it might be possible for Aurora to rally in the next few years as the glut resolves and prices rise again, there simply isn't a very strong investing thesis for buying it at the moment as its turnaround is far from guaranteed, and so the risks of a stock purchase are quite high.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis Aurora Cannabis (NASDAQ: ACB) is another Canadian cannabis cultivator, and it holds the leading position in its home country's medicinal market, which is a big part of how it was able to bring in CA$61.7 million for its fiscal first quarter of 2023. In terms of its valuation, Aurora's P/B multiple is 0.7, which puts it at a bit more expensive than Tilray but still firmly in the bargain bin relative to the wider market's average P/B. And its quarterly gross margin has worsened considerably over the last three years, despite the company's strategic transformation plan designed to slash its overhead and take it closer to profitability. | Aurora Cannabis Aurora Cannabis (NASDAQ: ACB) is another Canadian cannabis cultivator, and it holds the leading position in its home country's medicinal market, which is a big part of how it was able to bring in CA$61.7 million for its fiscal first quarter of 2023. Management hasn't signaled any plans to slash costs to make up for the decline, and it remains unprofitable. The Canadian cannabis market is currently experiencing a glut of marijuana that's driving down prices and making it harder for businesses to maintain their margins. | Aurora Cannabis Aurora Cannabis (NASDAQ: ACB) is another Canadian cannabis cultivator, and it holds the leading position in its home country's medicinal market, which is a big part of how it was able to bring in CA$61.7 million for its fiscal first quarter of 2023. Tilray Brands As the biggest recreational marijuana seller in Canada and the largest medicinal operator in the European Union, Tilray Brands (NASDAQ: TLRY) is perhaps the most globalized marijuana business in the world. While it might be possible for Aurora to rally in the next few years as the glut resolves and prices rise again, there simply isn't a very strong investing thesis for buying it at the moment as its turnaround is far from guaranteed, and so the risks of a stock purchase are quite high. | Aurora Cannabis Aurora Cannabis (NASDAQ: ACB) is another Canadian cannabis cultivator, and it holds the leading position in its home country's medicinal market, which is a big part of how it was able to bring in CA$61.7 million for its fiscal first quarter of 2023. That's a bit concerning, but the even bigger issue is that recreational marijuana legalization is stalled in its favored international markets. And its quarterly gross margin has worsened considerably over the last three years, despite the company's strategic transformation plan designed to slash its overhead and take it closer to profitability. |
36412.0 | 2023-02-23 00:00:00 UTC | Could Aurora Cannabis Stock Be Delisted? | ACB | https://www.nasdaq.com/articles/could-aurora-cannabis-stock-be-delisted | nan | nan | Abysmal, atrocious, horrible, rotten -- pick your favorite description for how Aurora Cannabis (NASDAQ: ACB) stock has performed over the last few years. They're all applicable.
Aurora's share price currently stands more than 99% below its level from late 2018. The Canadian marijuana stock is down nearly 80% from where it was just one year ago. But there's now a more pressing dilemma than this catastrophic decline: Could Aurora Cannabis stock be delisted?
The simple answer
The simple answer to that question is yes. Aurora Cannabis has been delisted from stock exchanges before. However, the reasons why were positive. For example, the Canadian cannabis producer initially listed its shares on the Canadian Stock Exchange (CSE). It later moved to the Toronto Stock Exchange (TSE), resulting in a delisting from the CSE.
Similarly, Aurora originally listed its shares in the U.S. on the New York Stock Exchange (NYSE). In 2021, the company switched to the Nasdaq stock exchange to cut costs.
However, this time it's not as good of a story. Nasdaq requires that all stocks trade above $1 per share. If any stock is below $1 for 30 consecutive business days, the stock exchange will alert the company that it's out of compliance with listing requirements. The company then has 180 days to regain compliance or face delisting.
As of right now, Aurora isn't out of compliance. Its stock has closed below $1 for only nine consecutive business days. The problem, though, is that the trend doesn't look good. Aurora's shares have fallen 21% since Feb. 2, and no rebound appears to be in sight. A double-digit percentage gain is needed within the next three weeks to avoid a noncompliance notice from Nasdaq.
The better answer
The simple answer isn't always the best answer. That's true in this case. While Aurora Cannabis stock could be delisted from the Nasdaq stock exchange, it almost certainly won't actually be delisted.
Remember, Nasdaq gives companies 180 days to regain compliance. Even if Aurora's share price closes below $1 for 30 consecutive days, all it needs to do to remedy the situation is to close above $1 for 10 consecutive trading days.
It's quite possible this could happen naturally. For example, Aurora could report better-than-expected quarterly results that boost its share price. There could also be other developments that make investors jump aboard. One possibility is that Germany could establish a framework for the legalization of recreational marijuana that's beneficial to Aurora.
However, Aurora's fate doesn't rest on external factors alone. The company could take matters into its own hands via a reverse stock split.
Regular stock splits increase the number of shares outstanding to reduce the share price. Reverse stock splits do the opposite. They decrease the number of shares outstanding to increase the share price. Should Aurora be in danger of delisting by the Nasdaq at some point in the future, you can bet that it will conduct a reverse stock split if necessary.
Not as bleak a picture as you might think
Even the potential for being on the brink of delisting sounds ominous. However, the picture for Aurora Cannabis actually isn't as bleak as you might think.
Aurora delivered positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first time ever in its latest quarter. CEO Miguel Martin said in the quarterly conference call that he couldn't guarantee the company would generate positive adjusted EBITDA every quarter. But he said that Aurora is "confident that we can deliver positive adjusted EBITDA on an annualized basis going forward."
That aforementioned possibility of Germany legalizing recreational pot isn't a long shot, either. Germany's health minister has indicated that the country could provide additional clarity about its legalization plans this spring. The recreational market could even open as early as 2025. As one of only three medical cannabis producers with domestic production licenses, Aurora could be in a great position to profit in an expanded market.
I won't pretend that everything looks great for Aurora Cannabis right now. That's certainly not the case. However, even with the stock potentially at risk of becoming noncompliant with Nasdaq's listing requirements, Aurora's outlook isn't as abysmal, atrocious, horrible, and rotten as it's been in the past.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Abysmal, atrocious, horrible, rotten -- pick your favorite description for how Aurora Cannabis (NASDAQ: ACB) stock has performed over the last few years. Aurora delivered positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first time ever in its latest quarter. However, even with the stock potentially at risk of becoming noncompliant with Nasdaq's listing requirements, Aurora's outlook isn't as abysmal, atrocious, horrible, and rotten as it's been in the past. | Abysmal, atrocious, horrible, rotten -- pick your favorite description for how Aurora Cannabis (NASDAQ: ACB) stock has performed over the last few years. For example, the Canadian cannabis producer initially listed its shares on the Canadian Stock Exchange (CSE). While Aurora Cannabis stock could be delisted from the Nasdaq stock exchange, it almost certainly won't actually be delisted. | Abysmal, atrocious, horrible, rotten -- pick your favorite description for how Aurora Cannabis (NASDAQ: ACB) stock has performed over the last few years. While Aurora Cannabis stock could be delisted from the Nasdaq stock exchange, it almost certainly won't actually be delisted. 10 stocks we like better than Aurora Cannabis When our award-winning analyst team has a stock tip, it can pay to listen. | Abysmal, atrocious, horrible, rotten -- pick your favorite description for how Aurora Cannabis (NASDAQ: ACB) stock has performed over the last few years. Aurora Cannabis has been delisted from stock exchanges before. As of right now, Aurora isn't out of compliance. |
36413.0 | 2023-02-23 00:00:00 UTC | Aurora Cannabis Stock: Bear vs. Bull | ACB | https://www.nasdaq.com/articles/aurora-cannabis-stock%3A-bear-vs.-bull | nan | nan | Canada-based Aurora Cannabis (NASDAQ: ACB) has been on a downward spiral for the past few years. Industry headwinds, as well as some of Aurora's own actions, dragged the stock down, causing investors to lose faith in the company.
Aurora has left no stone unturned to achieve positive earnings before interest, taxes, depreciation, and amortization (EBITDA). Despite cutting costs by shutting underperforming facilities and making acquisitions in a bid for growth, it failed time and again to hit its target. However, its most recent quarterly results came as a big surprise. Let's look at both the positive and negative aspects of investing in Aurora's stock right now.
Image source: Getty Images.
Bull case: Aurora hit its target of achieving positive adjusted EBITDA
Aurora was once a popular Canadian marijuana stock. The company and its peers benefited from high demand in Canada after the legalization of recreational marijuana in 2019. However, regulatory challenges and pricing pressure created a demand-supply imbalance, hurting revenue for the majority of companies. Aurora's balance sheet had already been strained by its acquisition spree at the time.
Since then, the company has tried and failed numerous times to reduce costs and achieve positive EBITDA. Aurora's recent fiscal 2023 second quarter ended Dec. 31 provided a ray of hope for investors. The company finally achieved a positive adjusted EBITDA of 1.4 million Canadian dollars ($1.03 million), a significant improvement over the previous year's adjusted EBITDA loss of CA$7.1 million.
While many Canadian players are still experiencing falling revenue, Aurora's net revenue rose 2% year over year to CA$62 million. Revenue increased by 20% sequentially.
To boost revenue further, Aurora may find good opportunities in Germany. According to the company's management, it was the second-largest producer of cannabis flowers in the country. Aurora is also one of Germany's three licensed growers of medical marijuana. When recreational cannabis is legalized in Germany, having a solid foothold could be extremely beneficial to Aurora.
The company also expects Poland, the U.K., the Czech Republic, and France to be promising markets.
Bear case: Stock dilution could still be an issue
Aurora argues that it has the best balance sheet in the Canadian cannabis industry. It had $310 million in cash and $65 million in restricted cash at the end of the quarter. This is good news for the time being, but the company has raised the majority of its capital through stock offerings. Raising capital by selling stock does not sit well with investors because it is frequently interpreted as a failure to raise capital through other means. New share issues also dilute the value of existing stockholders.
Meanwhile, the business is losing money. It reported a net loss of CA$67 million in the second quarter of fiscal 2023, compared with a loss of $CA52 million in the first quarter. However, losses in the latest period were lower than the CA$75.1 million loss in Q2 fiscal 2022.
Should investors buy Aurora Cannabis now?
Though the company met its goal of positive EBITDA this quarter, it must do so in the future to regain investors' trust. Aurora Chief Executive Officer Miguel Martin assured investors during theearnings callthat the company will "deliver positive adjusted EBITDA on an annualized basis going forward." However, because of the volatile nature of the cannabis industry, Martin also stated that it may not occur in every quarter.
Although the quarterly results were good news for Aurora, I would still advise investors to hold off on investing in the stock for the time being. It is prudent to avoid this marijuana stock until it generates profits and positive cash flow. Beyond that, the cannabis industry has much better companies that have the potential to make investors money in the long run.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Sushree Mohanty has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Canada-based Aurora Cannabis (NASDAQ: ACB) has been on a downward spiral for the past few years. Despite cutting costs by shutting underperforming facilities and making acquisitions in a bid for growth, it failed time and again to hit its target. Aurora Chief Executive Officer Miguel Martin assured investors during theearnings callthat the company will "deliver positive adjusted EBITDA on an annualized basis going forward." | Canada-based Aurora Cannabis (NASDAQ: ACB) has been on a downward spiral for the past few years. Bull case: Aurora hit its target of achieving positive adjusted EBITDA Aurora was once a popular Canadian marijuana stock. The company finally achieved a positive adjusted EBITDA of 1.4 million Canadian dollars ($1.03 million), a significant improvement over the previous year's adjusted EBITDA loss of CA$7.1 million. | Canada-based Aurora Cannabis (NASDAQ: ACB) has been on a downward spiral for the past few years. Industry headwinds, as well as some of Aurora's own actions, dragged the stock down, causing investors to lose faith in the company. Bull case: Aurora hit its target of achieving positive adjusted EBITDA Aurora was once a popular Canadian marijuana stock. | Canada-based Aurora Cannabis (NASDAQ: ACB) has been on a downward spiral for the past few years. Bull case: Aurora hit its target of achieving positive adjusted EBITDA Aurora was once a popular Canadian marijuana stock. The company finally achieved a positive adjusted EBITDA of 1.4 million Canadian dollars ($1.03 million), a significant improvement over the previous year's adjusted EBITDA loss of CA$7.1 million. |
36414.0 | 2023-02-20 00:00:00 UTC | Is Aurora Cannabis a Buy? | ACB | https://www.nasdaq.com/articles/is-aurora-cannabis-a-buy | nan | nan | Aurora Cannabis (NASDAQ: ACB) hasn't been a very rewarding stock to buy in recent years. Far, far from it. But, with a concerted effort to reverse its fortunes in progress, it just might be able to perform better between now and 2026.
Does that make this stock, which is down about 95% in the past three years, a buy right now? Let's investigate.
Things are looking up
Despite the crash-and-burn stock history, there's a small body of evidence indicating that Aurora Cannabis is succeeding in making a turnaround. For investors, betting on that turnaround evolving into a bull run for the stock means believing that the company's problems will continue to abate, enabling it to reach profitability while maintaining or increasing its market share. That's a tall order, and it's a risky bet to make, but it isn't as outlandish as it might have seemed a mere year ago.
On Feb. 9, the company reported its earnings for its fiscal second quarter of 2023, which ended Dec. 31. One bright spot was that its sales were up by 1.1 million Canadian dollars ($820,000) from the same quarter a year ago, reaching a total of CA$61.7 million. That means its brands of cannabis aren't losing market share despite the ongoing collapse of the Canadian marijuana market, where it's the leading medicinal operator by revenue. Another positive development was that the company reported positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$1.4 million for the quarter, fulfilling a promise that management made and inching it closer toward generating cash instead of burning it.
Now, with management heralding the completion of Aurora's strategic transformation plan, the next task will be to pursue profitable growth without repeating the mistakes of the past, specifically building too much production capacity for the level of demand in the Canadian marijuana market. On that note, it's laudable that the company was able to slash its excess operations by making layoffs and closing facilities in time to meet its self-imposed deadline for reaching positive adjusted EBITDA. And it probably won't overbuild this time around either because management has repeatedly signaled that profitability is a higher priority than top-line expansion. But unfortunately, the next leg of the journey toward profitability is going to be just as hard, and there are a few indications that things aren't going as planned.
Don't log in to your brokerage just yet
The case against buying Aurora, however, is much more compelling than the argument in favor of buying it.
By definition, reaching profitability requires slashing costs or increasing revenue. But in Q2, Aurora Cannabis reported that its adjusted gross margin, when calculated without any changes from the fair market value of cannabis and without considering its bulk wholesale business, fell to 49%. That was lower than the prior quarter's adjusted gross margin of 54%, not to mention the adjusted gross margin of 54% from a year-earlier quarter.
Furthermore, astute readers will note that the figures above are reported by the company on a heavily modified basis, which means that they were calculated using a slew of nebulous accounting adjustments and exclusions. Without making all of those accounting concessions, Aurora's quarterly gross margin is still negative, and it shows no upward trend over the last three years. Likewise, without making any adjustments, its quarterly EBITDA is still deep in the red. And over the past 12 months, it hemorrhaged more than CA$181.3 million in cash. It still has CA$258.9 million in cash on hand, but its trailing-12-month total expenses were quite large, at more than CA$467.8 million.
Soon enough something will need to give for the company to operate at its current level of expenditures for the next few years. Expect it to take out fresh debt or to issue new stock -- neither of which is positive for shareholders.
Beyond the next year, an even bigger problem is that it hasn't demonstrated any kind of competitive advantage that it might use to defend its market share or to reach the profitable growth that management is targeting. So it's likely that larger competitors in Canada will force it to spend on marketing to remain in the running, keeping its costs high. Add that to the host of issues outlined above as a great reason to avoid buying this stock.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis (NASDAQ: ACB) hasn't been a very rewarding stock to buy in recent years. For investors, betting on that turnaround evolving into a bull run for the stock means believing that the company's problems will continue to abate, enabling it to reach profitability while maintaining or increasing its market share. Now, with management heralding the completion of Aurora's strategic transformation plan, the next task will be to pursue profitable growth without repeating the mistakes of the past, specifically building too much production capacity for the level of demand in the Canadian marijuana market. | Aurora Cannabis (NASDAQ: ACB) hasn't been a very rewarding stock to buy in recent years. One bright spot was that its sales were up by 1.1 million Canadian dollars ($820,000) from the same quarter a year ago, reaching a total of CA$61.7 million. Another positive development was that the company reported positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$1.4 million for the quarter, fulfilling a promise that management made and inching it closer toward generating cash instead of burning it. | Aurora Cannabis (NASDAQ: ACB) hasn't been a very rewarding stock to buy in recent years. For investors, betting on that turnaround evolving into a bull run for the stock means believing that the company's problems will continue to abate, enabling it to reach profitability while maintaining or increasing its market share. Another positive development was that the company reported positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$1.4 million for the quarter, fulfilling a promise that management made and inching it closer toward generating cash instead of burning it. | Aurora Cannabis (NASDAQ: ACB) hasn't been a very rewarding stock to buy in recent years. Does that make this stock, which is down about 95% in the past three years, a buy right now? Another positive development was that the company reported positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$1.4 million for the quarter, fulfilling a promise that management made and inching it closer toward generating cash instead of burning it. |
36415.0 | 2023-02-18 00:00:00 UTC | Better Buy: Aurora Cannabis vs. Cresco Labs | ACB | https://www.nasdaq.com/articles/better-buy%3A-aurora-cannabis-vs.-cresco-labs | nan | nan | Though cannabis stocks have been frighteningly underperforming for the last 24 months or so, the industry itself has been expanding rapidly. If Allied Market Research's estimates are correct, the global cannabis market could reach $149 billion by 2031.
As with any high-growth industry, there's no doubt investing in cannabis stocks today is risky business. However, it also has the potential to make risk-tolerant investors wealthy in the long run with attractive investment options in both the Canadian and U.S. markets.
While the Canadian market is legal at the federal level, unlike the American market, the latter is much larger. Let's take a closer look to see if Aurora Cannabis (NASDAQ: ACB), a once-hot cannabis stock, or Cresco Labs (OTC: CRLBF), a U.S. multi-state operator (MSO), is a better investment right now.
Image source: Getty Images.
The case for Aurora Cannabis
The last few years have been difficult for Aurora Cannabis. When demand was high in Canada, the company went on an acquisition spree that subsequently weighed heavily on its balance sheet. Demand-supply imbalances in Canada affected revenue, compounding Aurora's problems.
After repeatedly failing to meet its target of positive EBITDA, the company's recent quarterly results provided a ray of hope. In its fiscal 2023 second quarter, it finally reported a positive adjusted EBITDA of 1.4 million Canadian dollars. That's a significant improvement over the prior-year period's adjusted EBITDA loss of CA$7.1 million.
Aurora's net revenue increased by 2% year over year to CA$62 million, and grew 20% sequentially. Though the quarterly results appear to be encouraging, there are still some concerns. Aurora has no significant financial partners, unlike its peers, Tilray and Canopy Growth. It has raised capital by diluting its stock, which is not beneficial to shareholders. Aurora will struggle to enter the U.S. market if and when federal legalization happens unless it has a strong financial backing.
Aurora's path will not be easy unless the company generates profits and achieves positive cash flow.
The case for Cresco Labs
Despite not being a big name in the U.S. cannabis industry, Cresco Labs is slowly gaining traction through its nationwide network of 57 stores.
But Cresco is about to get bigger after completing the acquisition of Columbia Care. The acquisition should close at the end of Q1 2023 and will add another 130 dispensaries to Cresco's portfolio. Merging with Columbia may push it to the forefront of the industry as competition heats up. Each of its fellow MSOs, Trulieve Cannabis, Curaleaf Holdings, and Green Thumb Industries, have over 100 locations each in key cannabis markets.
It is also focusing on long-term profitability by closing underperforming facilities to save money. According to management, this strategy had a significant impact on its most recent quarterly results. Adjusted EBITDA dropped to $42 million in the third quarter, down from $56 million in the year-ago period, while revenue fell 2% to $210 million.
But even with just 57 stores nationwide, Cresco managed to generate $822 million in revenue in 2021, a respectable result compared to bigger players. Last year, Trulieve Cannabis earned $938 million in revenue, while Curaleaf earned $1.2 billion.
New markets could help Cresco's revenue grow even more this year. The company may benefit from the legalization of recreational cannabis in Pennsylvania, Ohio, and Florida. Although none of those states have legalized recreational marijuana yet, there has been progress. Cresco currently operates 11 dispensaries in Pennsylvania, five in Ohio, and 22 in Florida. The acquisition of Columbia will result in more stores in each of these states.
Cresco is trading at 0.61 times sales which is probably undervalued. However, with such growth drivers in place, it seems poised to recover at a certain point in the future.
If cannabis is legalized in the U.S., not all businesses will benefit. Only financially secure and stronger businesses like Cresco will be able to thrive in the long run.
The verdict
When given a choice between these two, Cresco Labs seems a better buy. This MSO has stronger fundamentals than Aurora Cannabis. Cresco is already profitable and commands a significantly larger market share in the U.S.
Analysts on Wall Street believe Cresco's stock is a buy, with potential upside of 224% over the next 12 months. Aurora, on the other hand, has a consensus hold rating and 18% potential upside over the same period.
If the U.S. federally legalizes cannabis, domestic growers like Cresco will have an advantage. On the other hand, Aurora lacks a strong financial backer to help it establish a position in the U.S. market. It will take a while for Aurora to capture the burgeoning U.S. market, given the intense competition.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Sushree Mohanty has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cresco Labs, Green Thumb Industries, and Trulieve Cannabis. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Let's take a closer look to see if Aurora Cannabis (NASDAQ: ACB), a once-hot cannabis stock, or Cresco Labs (OTC: CRLBF), a U.S. multi-state operator (MSO), is a better investment right now. However, it also has the potential to make risk-tolerant investors wealthy in the long run with attractive investment options in both the Canadian and U.S. markets. After repeatedly failing to meet its target of positive EBITDA, the company's recent quarterly results provided a ray of hope. | Let's take a closer look to see if Aurora Cannabis (NASDAQ: ACB), a once-hot cannabis stock, or Cresco Labs (OTC: CRLBF), a U.S. multi-state operator (MSO), is a better investment right now. Each of its fellow MSOs, Trulieve Cannabis, Curaleaf Holdings, and Green Thumb Industries, have over 100 locations each in key cannabis markets. Last year, Trulieve Cannabis earned $938 million in revenue, while Curaleaf earned $1.2 billion. | Let's take a closer look to see if Aurora Cannabis (NASDAQ: ACB), a once-hot cannabis stock, or Cresco Labs (OTC: CRLBF), a U.S. multi-state operator (MSO), is a better investment right now. The case for Aurora Cannabis The last few years have been difficult for Aurora Cannabis. The case for Cresco Labs Despite not being a big name in the U.S. cannabis industry, Cresco Labs is slowly gaining traction through its nationwide network of 57 stores. | Let's take a closer look to see if Aurora Cannabis (NASDAQ: ACB), a once-hot cannabis stock, or Cresco Labs (OTC: CRLBF), a U.S. multi-state operator (MSO), is a better investment right now. While the Canadian market is legal at the federal level, unlike the American market, the latter is much larger. The case for Aurora Cannabis The last few years have been difficult for Aurora Cannabis. |
36416.0 | 2023-02-16 00:00:00 UTC | Where Will Aurora Cannabis Be in 1 Year? | ACB | https://www.nasdaq.com/articles/where-will-aurora-cannabis-be-in-1-year-0 | nan | nan | Nearly five years ago, Aurora Cannabis (NASDAQ: ACB) acquired medical marijuana company MedReleaf in an all-stock deal valued at roughly 3.2 billion Canadian dollars ($2.4 billion). Today, Aurora Cannabis is a small fraction of that valuation. At the time, there was a lot of excitement in the emerging Canadian pot market. Now, that hope has turned to despair as companies struggle to both grow and stay out of the red.
Aurora is showing signs of progress, but is it on the right track, and will the business be in a better place a year from now?
The company's financials are improving but the business still isn't sustainable
On Feb. 9, Aurora Cannabis released its second-quarter results for the period ended Dec. 31, reporting positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$1.4 million. That's an important milestone for the company, which a year ago, reported an adjusted EBITDA loss of CA$7.1 million. Getting to positive adjusted EBITDA was a key goal for the company's management.
The problem, however, is that the company is still bleeding cash. During the period, it used up CA$60 million in its operations and CA$130 million on debt and interest payments. Without positive operating cash flow, it's going to potentially lead to more dilution down the road, which has already been a big problem for shareholders.
ACB Shares Outstanding data by YCharts
One way it can improve its financials is by focusing on the medical marijuana market, which has helped it achieve adjusted EBITDA profitability.
Could Aurora make more of a pivot toward medical marijuana?
The Canadian cannabis market is highly competitive and saturated. Investors have to look no further than the once-leading cannabis company in the industry, Canopy Growth (NASDAQ: CGC), as proof that companies are starting to give up on the market. Canopy Growth has divested its Canadian retail operations and is scaling back, transitioning to what it calls "an asset-light model in Canada."
The one area where Aurora has found success is by focusing on medical marijuana, especially as it has expanded internationally. In that segment, Aurora reported a positive gross profit (before adjustments) of CA$13.1 million in the second quarter versus a loss of CA$8 million on the consumer side. If Aurora is serious about remaining profitable and improving its cash flow, it's clear that it would need to focus on the medical segment more so than the consumer one. And that's already the path that the company has been on.
This past quarter, medical marijuana net revenue totaled CA$39.5 million and represented 64% of its top line. Three years ago, in 2020, medical marijuana sales for the same period were CA$27.4 million and accounted for 49% of all net revenue. It seems to be no coincidence that as the company has been pursuing medical marijuana products, which command better margins, its financials have improved.
Will a turnaround happen?
Over the past 12 months, Aurora's stock has plummeted almost 80%. And even with these improved results, I don't think it's enough for the stock to suddenly become a buy. Aurora is still burning through cash and I wouldn't expect that to change in just a year from now. Its sales in Q2 were also up only 2% from the prior-year period. And its medical marijuana sales were down 14%, which the company blames on the "timing of sales to certain international export markets." If that's true and the growth rate does improve, there could be some potential for the stock to attract contrarian investors.
But overall, there isn't enough of a reason to be bullish on Aurora's stock today. The company isn't generating any meaningful growth and still faces significant challenges down the road. Investors shouldn't assume things will get any better in the near future and should continue to avoid this troubled pot stock.
One year from now I expect the situation to be much the same as it is right now for Aurora Cannabis, with the company still struggling to grow -- except the stock will likely be even lower.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ACB Shares Outstanding data by YCharts One way it can improve its financials is by focusing on the medical marijuana market, which has helped it achieve adjusted EBITDA profitability. Nearly five years ago, Aurora Cannabis (NASDAQ: ACB) acquired medical marijuana company MedReleaf in an all-stock deal valued at roughly 3.2 billion Canadian dollars ($2.4 billion). The company's financials are improving but the business still isn't sustainable On Feb. 9, Aurora Cannabis released its second-quarter results for the period ended Dec. 31, reporting positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$1.4 million. | Nearly five years ago, Aurora Cannabis (NASDAQ: ACB) acquired medical marijuana company MedReleaf in an all-stock deal valued at roughly 3.2 billion Canadian dollars ($2.4 billion). ACB Shares Outstanding data by YCharts One way it can improve its financials is by focusing on the medical marijuana market, which has helped it achieve adjusted EBITDA profitability. In that segment, Aurora reported a positive gross profit (before adjustments) of CA$13.1 million in the second quarter versus a loss of CA$8 million on the consumer side. | Nearly five years ago, Aurora Cannabis (NASDAQ: ACB) acquired medical marijuana company MedReleaf in an all-stock deal valued at roughly 3.2 billion Canadian dollars ($2.4 billion). ACB Shares Outstanding data by YCharts One way it can improve its financials is by focusing on the medical marijuana market, which has helped it achieve adjusted EBITDA profitability. The company's financials are improving but the business still isn't sustainable On Feb. 9, Aurora Cannabis released its second-quarter results for the period ended Dec. 31, reporting positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$1.4 million. | Nearly five years ago, Aurora Cannabis (NASDAQ: ACB) acquired medical marijuana company MedReleaf in an all-stock deal valued at roughly 3.2 billion Canadian dollars ($2.4 billion). ACB Shares Outstanding data by YCharts One way it can improve its financials is by focusing on the medical marijuana market, which has helped it achieve adjusted EBITDA profitability. Three years ago, in 2020, medical marijuana sales for the same period were CA$27.4 million and accounted for 49% of all net revenue. |
36417.0 | 2023-02-14 00:00:00 UTC | CVI Investments Now Owns 4.90% of Aurora Cannabis (ACB) | ACB | https://www.nasdaq.com/articles/cvi-investments-now-owns-4.90-of-aurora-cannabis-acb | nan | nan | Fintel reports that CVI Investments has filed a 13G/A form with the SEC disclosing ownership of 15.78MM shares of Aurora Cannabis Inc. (ACB). This represents 4.9% of the company.
In their previous filing dated June 1, 2022 they reported 16.50MM shares and 5.70% of the company, a decrease in shares of 4.37% and a decrease in total ownership of 0.80% (calculated as current - previous percent ownership).
Analyst Price Forecast Suggests 59.09% Upside
As of February 14, 2023, the average one-year price target for Aurora Cannabis is $1.46. The forecasts range from a low of $0.94 to a high of $3.15. The average price target represents an increase of 59.09% from its latest reported closing price of $0.91.
The projected annual revenue for Aurora Cannabis is $198MM. The projected annual EPS is -$0.36.
What is the Fund Sentiment?
There are 290 funds or institutions reporting positions in Aurora Cannabis. This is a decrease of 8 owner(s) or 2.68% in the last quarter. Average portfolio weight of all funds dedicated to ACB is 0.06%, a decrease of 33.48%. Total shares owned by institutions decreased in the last three months by 7.63% to 57,227K shares. The put/call ratio of ACB is 0.07, indicating a bullish outlook.
What are large shareholders doing?
Etf Managers Group holds 10,602K shares representing 3.11% ownership of the company. In it's prior filing, the firm reported owning 10,527K shares, representing an increase of 0.71%. The firm decreased its portfolio allocation in ACB by 0.57% over the last quarter.
MJ - ETFMG Alternative Harvest ETF holds 10,423K shares representing 3.06% ownership of the company. In it's prior filing, the firm reported owning 10,527K shares, representing a decrease of 1.00%. The firm increased its portfolio allocation in ACB by 8.87% over the last quarter.
Renaissance Technologies holds 5,928K shares representing 1.74% ownership of the company. In it's prior filing, the firm reported owning 4,251K shares, representing an increase of 28.30%. The firm increased its portfolio allocation in ACB by 2.01% over the last quarter.
D. E. Shaw & holds 3,662K shares representing 1.07% ownership of the company. In it's prior filing, the firm reported owning 2,665K shares, representing an increase of 27.24%. The firm increased its portfolio allocation in ACB by 29.42% over the last quarter.
Millennium Management holds 3,128K shares representing 0.92% ownership of the company. In it's prior filing, the firm reported owning 3,275K shares, representing a decrease of 4.68%. The firm decreased its portfolio allocation in ACB by 15.90% over the last quarter.
Aurora Cannabis Background Information
(This description is provided by the company.)
Aurora is a global leader in the cannabis industry serving both the medical and consumer markets. Headquartered in Canada, Aurora is a pioneer in global cannabis dedicated to helping people improve their lives. The Company's brand portfolio includes Aurora, Aurora Drift, San Rafael '71, Daily Special, AltaVie, MedReleaf, CanniMed, Whistler, and Reliva. Providing customers with innovative, high-quality cannabis and hemp products, Aurora's brands continue to break through as industry leaders in the medical, performance, wellness and recreational markets wherever they are launched.
This story originally appeared on Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Fintel reports that CVI Investments has filed a 13G/A form with the SEC disclosing ownership of 15.78MM shares of Aurora Cannabis Inc. (ACB). Average portfolio weight of all funds dedicated to ACB is 0.06%, a decrease of 33.48%. The put/call ratio of ACB is 0.07, indicating a bullish outlook. | Fintel reports that CVI Investments has filed a 13G/A form with the SEC disclosing ownership of 15.78MM shares of Aurora Cannabis Inc. (ACB). Average portfolio weight of all funds dedicated to ACB is 0.06%, a decrease of 33.48%. The put/call ratio of ACB is 0.07, indicating a bullish outlook. | Fintel reports that CVI Investments has filed a 13G/A form with the SEC disclosing ownership of 15.78MM shares of Aurora Cannabis Inc. (ACB). Average portfolio weight of all funds dedicated to ACB is 0.06%, a decrease of 33.48%. The put/call ratio of ACB is 0.07, indicating a bullish outlook. | Average portfolio weight of all funds dedicated to ACB is 0.06%, a decrease of 33.48%. Fintel reports that CVI Investments has filed a 13G/A form with the SEC disclosing ownership of 15.78MM shares of Aurora Cannabis Inc. (ACB). The put/call ratio of ACB is 0.07, indicating a bullish outlook. |
36418.0 | 2023-02-11 00:00:00 UTC | 2 Green Flags and 1 Red Flag for Aurora Cannabis | ACB | https://www.nasdaq.com/articles/2-green-flags-and-1-red-flag-for-aurora-cannabis | nan | nan | Aurora Cannabis (NASDAQ: ACB) really, really needed some good news. Shares of the Canadian cannabis producer plunged 83% last year. And that decline came on top of a 35% drop in 2021 and a 68% plummet in 2020.
The company announced its fiscal 2023 second-quarter results on Thursday. Did Aurora get some of that sorely needed good news? Actually, yes. However, there was some more bad news, too. Here are two green flags and one red flag from the company's Q2 update.
Green flag No. 1: Positive adjusted EBITDA
Aurora's management said that the company would generate positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the fiscal second quarter. And it lived up to that promise.
The cannabis producer reported Q2 adjusted EBITDA of 1.4 million Canadian dollars. That's a big improvement from the loss of CA$7.4 million in the previous quarter and the CA$7.1 million adjusted EBITDA loss in the prior-year period.
Even better, CEO Miguel Martin stated in the quarterly conference call, "We are confident that we can deliver positive adjusted EBITDA on annualized basis going forward." To be clear, Martin didn't commit to generating positive adjusted EBITDA every quarter. He acknowledged that there could be "some quarter-to-quarter variability due to the dynamic nature of the cannabis industry."
However, the company's previous management predicted positive adjusted EBITDA several years ago and failed to deliver. Martin has built at least a little credibility with investors now that Aurora will truly be able to keep the positive adjusted EBITDA coming more often than not.
Green flag No. 2: Germany
Another green flag for Aurora comes from Germany (although, technically, the country's flag features black, red, and gold). The company remained the No. 2 producer of flower for the German medical cannabis market. It's also one of only three license holders to grow medical marijuana inside the country. There are two reasons to be especially optimistic about Aurora's prospects in Germany.
First, Germany could launch a recreational cannabis market as soon as 2025. Martin said that Aurora expects that the German government will provide more clarity about the next steps in the legalization process this spring. The company's current position in the medical cannabis market could give it a leg up in whatever regulatory framework emerges.
Germany's moves could pave the way for other European countries to follow in its footsteps. Martin noted in the fiscal Q2 conference call that Aurora has spoken with regulators in Poland and the Czech Republic and that they're waiting to see what Germany does.
Second, Germany has a major initiative underway to reduce red tape. Martin mentioned that currently only around 30% of German patients successfully navigate the qualification process to receive medical cannabis products. He expects improvements to this process that could provide a boost to Aurora's medical marijuana sales in the country.
Red flag: Still losing money
Now for the bright and blaring red flag for Aurora Cannabis: It's still losing money. Lots of money.
The company posted a net loss in fiscal Q2 of CA$67.2 million. That was worse than the CA$51.9 million loss in fiscal Q1. However, it reflected improvement from the CA$75.1 million loss in the prior-year period.
Fortunately, Aurora has a big cash stockpile of around CA$310 million. CFO Glen Ibott said that should be enough to fund operations until the company is able to generate positive cash flow. However, don't be surprised if more dilution is on the way due to the issuance of new shares.
Ibott noted that Aurora has access to around CA$180 million under its current at-the-market (ATM) program. Its current shelf offering expires in April. Ibott said that the company will likely refile a new shelf prospectus for another ATM program.
What's required for a rebound?
Aurora's latest update wasn't enough to light a fire beneath the cannabis stock. So what will be required for the stock to rebound?
Achieving positive cash flow and true profitability would be a big step. That could entice more investors into reevaluating their views about Aurora. Significant improvement in the Canadian market could also provide a catalyst.
I wouldn't rule out good news from Germany spurring a rebound, either. The market opportunity could be huge for Aurora if Germany legalizes recreational cannabis and streamlines its qualification process for medical marijuana.
Is the stock a smart pick to buy right now? I wouldn't go that far. However, there are reasons for some cautious optimism about the future.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis (NASDAQ: ACB) really, really needed some good news. Even better, CEO Miguel Martin stated in the quarterly conference call, "We are confident that we can deliver positive adjusted EBITDA on annualized basis going forward." Martin mentioned that currently only around 30% of German patients successfully navigate the qualification process to receive medical cannabis products. | Aurora Cannabis (NASDAQ: ACB) really, really needed some good news. 1: Positive adjusted EBITDA Aurora's management said that the company would generate positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the fiscal second quarter. That's a big improvement from the loss of CA$7.4 million in the previous quarter and the CA$7.1 million adjusted EBITDA loss in the prior-year period. | Aurora Cannabis (NASDAQ: ACB) really, really needed some good news. 1: Positive adjusted EBITDA Aurora's management said that the company would generate positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the fiscal second quarter. 2: Germany Another green flag for Aurora comes from Germany (although, technically, the country's flag features black, red, and gold). | Aurora Cannabis (NASDAQ: ACB) really, really needed some good news. 2: Germany Another green flag for Aurora comes from Germany (although, technically, the country's flag features black, red, and gold). Red flag: Still losing money Now for the bright and blaring red flag for Aurora Cannabis: It's still losing money. |
36419.0 | 2023-02-10 00:00:00 UTC | Aurora Cannabis CEO says open to more M&A deals after upbeat Q2 | ACB | https://www.nasdaq.com/articles/aurora-cannabis-ceo-says-open-to-more-ma-deals-after-upbeat-q2 | nan | nan | By Ankit Kumar
Feb 10 (Reuters) - Canada's Aurora Cannabis Inc ACB.TO would be open to undertake more merger and acquisition deals in the future to expand its medical cannabis business, the company's chief executive said on Friday.
The upbeat comments followed the cannabis producer's surprise second-quarter core profit, helped by cost saving measures it had been taking since early 2020.
"The net cash position gives us the opportunity to do M&A," CEO Miguel Martin told Reuters in an interview.
The company will likely focus on acquiring medical assets or medical infrastructure – "something that's additive to medical would be more interesting to us than maybe others," he added.
In its earnings release late on Thursday, Aurora said it has about $310 million of cash, including $65 million of restricted cash as of Feb. 8.
In August last year, the company acquired a controlling interest in agricultural company Bevo Agtech for C$45 million ($33.70 million).
"I think the type of M&A we would do would be consistent with what you saw with Bevo, predictable profitable… steady business," Martin said.
The company which draws majority of its sales from its medical cannabis business, which posted an adjusted core profit of C$1.4 million compared with analysts' expectations of core loss of C$3.9 million.
($1 = 1.3353 Canadian dollars)
(Reporting by Ankit Kumar; Editing by Shailesh Kuber)
((Ankit.Kumar2@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Ankit Kumar Feb 10 (Reuters) - Canada's Aurora Cannabis Inc ACB.TO would be open to undertake more merger and acquisition deals in the future to expand its medical cannabis business, the company's chief executive said on Friday. The upbeat comments followed the cannabis producer's surprise second-quarter core profit, helped by cost saving measures it had been taking since early 2020. "The net cash position gives us the opportunity to do M&A," CEO Miguel Martin told Reuters in an interview. | By Ankit Kumar Feb 10 (Reuters) - Canada's Aurora Cannabis Inc ACB.TO would be open to undertake more merger and acquisition deals in the future to expand its medical cannabis business, the company's chief executive said on Friday. In August last year, the company acquired a controlling interest in agricultural company Bevo Agtech for C$45 million ($33.70 million). The company which draws majority of its sales from its medical cannabis business, which posted an adjusted core profit of C$1.4 million compared with analysts' expectations of core loss of C$3.9 million. | By Ankit Kumar Feb 10 (Reuters) - Canada's Aurora Cannabis Inc ACB.TO would be open to undertake more merger and acquisition deals in the future to expand its medical cannabis business, the company's chief executive said on Friday. In August last year, the company acquired a controlling interest in agricultural company Bevo Agtech for C$45 million ($33.70 million). The company which draws majority of its sales from its medical cannabis business, which posted an adjusted core profit of C$1.4 million compared with analysts' expectations of core loss of C$3.9 million. | By Ankit Kumar Feb 10 (Reuters) - Canada's Aurora Cannabis Inc ACB.TO would be open to undertake more merger and acquisition deals in the future to expand its medical cannabis business, the company's chief executive said on Friday. In its earnings release late on Thursday, Aurora said it has about $310 million of cash, including $65 million of restricted cash as of Feb. 8. In August last year, the company acquired a controlling interest in agricultural company Bevo Agtech for C$45 million ($33.70 million). |
36420.0 | 2023-02-10 00:00:00 UTC | Aurora Cannabis Reaches Adjusted EBITDA Profitability Target In The Second Quarter | ACB | https://www.nasdaq.com/articles/aurora-cannabis-reaches-adjusted-ebitda-profitability-target-in-the-second-quarter | nan | nan | Global marijuana industry leader Aurora Cannabis (CA:ACB) reported second quarter results on Thursday after the closure of US equity markets. Aurora’s shares were sold off heavily into the result with ACB in Canada closing -7.5% lower and the US listing -6.2% as investors were worried about a potentially underwhelming print.
The story seemed better than feared with Aurora reporting sales growth of 25% over the year to $61.68 million from $49.3 million in the prior year. Analysts were expecting a figure of around $60.9 million for the quarter.
Medical cannabis revenue grew 25% in the prior quarter to $39.5 million but decreased 14% when compared to the prior year's quarter.
The focal point was $1.4 million of positive adjusted EBITDA generated for the quarter in line with management's guidance. The result was a significant improvement from the -$7.7 million adjusted EBITDA loss in the prior year.
The result was aided by a full quarter of results from the recent Bevo Farms acquisition which is contributing positive adjusted EBITDA.
The group's net losses narrowed to -$67.2 million when compared to -$75.1 million in 2021. The ongoing positive trends towards becoming net income profitable should aid share price concerns.
Aurora sold 15,269kg of product during the quarter, with production up 17% in Q1. The average sales price per gram also rose from $4.52 in Q1 to $4.79 in Q2, showing easing pressure from oversupplied markets.
Aurora reported a cash balance of $310 million at the 8th of February with $193 million in debt at the end of the quarter.
Management highlighted that the company has delivered around $340 million in annualised cost savings since February of 2020.
The chart below from Fintel’s forecast page for ACB shows analyst forward EBITDA forecasts for the stock which suggest the company should continue to grow positive EBITDA over the next few years.
Cowen Equity Research analyst Vivien Azer thinks that while the company is focused on medical cannabis, they are finding a footing in adult use. The firm believes cost savings are now fully in place and Aurora should continue on the current profit dynamic on an annualized run-rate basis.
Cowen remains ‘market perform’ rated with a $1.30 price target on the stock.
Research from the Fintel platform has highlighted that sentiment in the options market has continued to become more bearish over time. This has been described by a declining put/call ratio which suggests call option demand is growing relative to put option demand.
The chart provided below illustrates how this trend has behaved over the last year against the share price.
This story originally appeared on Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Global marijuana industry leader Aurora Cannabis (CA:ACB) reported second quarter results on Thursday after the closure of US equity markets. Aurora’s shares were sold off heavily into the result with ACB in Canada closing -7.5% lower and the US listing -6.2% as investors were worried about a potentially underwhelming print. The chart below from Fintel’s forecast page for ACB shows analyst forward EBITDA forecasts for the stock which suggest the company should continue to grow positive EBITDA over the next few years. | Global marijuana industry leader Aurora Cannabis (CA:ACB) reported second quarter results on Thursday after the closure of US equity markets. The chart below from Fintel’s forecast page for ACB shows analyst forward EBITDA forecasts for the stock which suggest the company should continue to grow positive EBITDA over the next few years. Aurora’s shares were sold off heavily into the result with ACB in Canada closing -7.5% lower and the US listing -6.2% as investors were worried about a potentially underwhelming print. | The chart below from Fintel’s forecast page for ACB shows analyst forward EBITDA forecasts for the stock which suggest the company should continue to grow positive EBITDA over the next few years. Global marijuana industry leader Aurora Cannabis (CA:ACB) reported second quarter results on Thursday after the closure of US equity markets. Aurora’s shares were sold off heavily into the result with ACB in Canada closing -7.5% lower and the US listing -6.2% as investors were worried about a potentially underwhelming print. | Global marijuana industry leader Aurora Cannabis (CA:ACB) reported second quarter results on Thursday after the closure of US equity markets. Aurora’s shares were sold off heavily into the result with ACB in Canada closing -7.5% lower and the US listing -6.2% as investors were worried about a potentially underwhelming print. The chart below from Fintel’s forecast page for ACB shows analyst forward EBITDA forecasts for the stock which suggest the company should continue to grow positive EBITDA over the next few years. |
36421.0 | 2023-02-10 00:00:00 UTC | Aurora Cannabis (ACB) Q2 2023 Earnings Call Transcript | ACB | https://www.nasdaq.com/articles/aurora-cannabis-acb-q2-2023-earnings-call-transcript | nan | nan | Image source: The Motley Fool.
Aurora Cannabis (NASDAQ: ACB)
Q2 2023 Earnings Call
Feb 09, 2023, 5:00 p.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Greetings, and welcome to the Aurora Cannabis Inc. second quarter 2023 results conference call. [Operator instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce to you Ananth Krishnan, vice president, corporate development and investor relations.
Thank you, Ananth. You may begin.
Ananth Krishnan -- Vice President, Corporate Development and Investor Relations
Thank you, John, and good afternoon, everyone. We appreciate you joining us today. With me are CEO, Miguel Martin; and CFO, Glen Ibbott. After the market closed, Aurora issued a news release announcing our fiscal 2023 second quarter financial results.
This news release, accompanying financial statements and MD&A, are available on our IR website and can also be accessed via SEDAR and EDGAR. In addition, you will find the supplemental information deck on our IR website. Listeners are reminded that certain matters discussed on today's conference call could constitute forward-looking statements that are subject to risks and uncertainties related to our future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements.
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The risk factors that may affect actual results are detailed in our Annual Information Form and other periodic filings and registration statements. These documents may similarly be accessed via SEDAR and EDGAR. Following prepared remarks by Miguel and Glen, we will conduct a question-and-answer session with our analysts. We ask you to limit yourself to one question and then get back in the queue for follow-up.
With that, I will turn the call over to Miguel. Miguel, please go ahead.
Miguel Martin -- Chief Executive Officer
Thank you, Ananth. First and foremost, we are very proud to have achieved what we set out to do several quarters ago, namely, reaching our objective of positive adjusted EBITDA by the end of the 2022 calendar year. We are confident that we can deliver positive adjusted EBITDA on an annualized basis going forward, although there may be some quarter to quarter variability due to the dynamic nature of the cannabis industry, and the seasonality we previously talked about at our Bevo business. Importantly, as part of our business transformation, we also completed the structural changes we had intended to make as part of our cost rationalization.
These will certainly yield benefits for Aurora in both the near and long term. Annualized savings now total approximately $340 million since February 2020 and included substantial progress in cutting quarterly SG&A to well below $30 million. Our next financial milestone will be achieving positive operating cash flow as part of our plan to build long-term shareholder value. We expect this to be a multi-quarter initiative, and we will update the market on our progress to this new milestone.
Looking forward, our enthusiasm for the future is anchored by our No. 1 position in global medical cannabis among Canadian LPs, and the growth we've been able to sustain despite some quarter to quarter variability. With loyal patients in existing markets and more developing countries poised to open, we think the top line growth trend should continue. As a reminder, medical cannabis is a business we want to invest behind, not only because of its growth characteristics, but because of its defensive nature and volatile times.
It also enjoys enviable adjusted gross margins that consistently exceed 60%, twice that of consumer cannabis. Aurora is also ideally positioned because of our robust balance sheet and net cash position, which puts us in select company among our industry peers. This has allowed us to repurchase approximately $302 million in convertible debt in the last 12 months, resulting in about $17 million in cash interest savings on an annual basis. Finally, our investments in science, breeding and genetics have resulted in proprietary cultivars and driven meaningful improvements to yields and potency that have benefited all of our product lines.
We also remain committed to furthering medical cannabis clinical research in Canada, which should position us for innovation, which will be a key factor to success going forward. So those key strengths as a backdrop, let's take a deeper dive into our global medical cannabis business. As we had expected, international medical revenue rose sequentially compared to Q1, which can be attributed to our strength in the Australian market, as well as continued success in Europe. Our European business continues to demonstrate stability and growth on a year-over-year basis.
Anchored by the German medical market, we'll remain No. 2 in flower. Based on recent comments from the Health Minister, we expect further clarity around recreational legalization in Germany sometime this spring with a potential start to the market there as early as 2025. We continue to believe Aurora's position as one of only three companies with a medical domestic production license will give us a significant advantage as the regulatory framework is developed.
We are also bullish on the opportunities that lie ahead in our other key European markets, which include Poland, U.K., Czech Republic and France. While markets such as Australia and Israel continue to develop, our presence across nearly a dozen countries outside of Canada affords us relative installations to individual economic and regulatory climates. Turning to the high-margin Canadian medical market, most of the sequential growth in revenue was driven by a onetime benefit from Q1. However, even after normalizing for this adjustment, we still experienced a 2% growth in revenues.
We are extremely happy with this when coupled with recent cost reductions, which drove meaningful improvements in profitability. Over the past several months, Aurora patients have been given access to the largest ever selection of products and formats on Aurora Medical with over 75 SKUs launched in the medical channel between Q1 and Q2. These include products from our full portfolio of adult-use cannabis brands such as Being Quickstrips, Greybeard premium flower and new pre-rolls concentrates and minor cannabinoid oils. Notably, our Canadian medical business benefits from strong patient retention with insured patients comprising about 80% of all medical sales as part of a concentrated market with significant barriers to entry.
Our industry-leading market share also remains at about 25%, roughly double that of our closest competitor. To sum up, we remain very optimistic for this segment as we are not only increasing the number of patients in the insured category, but have also experienced year-over-year increases in basket size and participation rates. Note that only about 1% of the Canadian adult population is involved with medical cannabis. So any sort of movement makes a massive difference with the benefits outsized to a very small subset of companies like Aurora that participate in this segment.
Switching to Canadian adult rec. Our Q2 revenue show sequential growth of 7%. This increase was achieved despite some temporary industry disruption and a reduced number of shipping days over the holidays. The key driver for us here was strong sales execution, coupled with a strong pipeline of innovative new product offerings.
As you may recall, one of the key reasons for our acquisition of Thrive last year was their ability to manage our Canadian rec business, and we are thrilled to see our M&A strategy paying off. Finally, we plan to drive significant shareholder value over the long run through our controlling interest in Bevo, which is one of the largest suppliers of propagated vegetables and ornamental plants in North America. We are currently repurposing the Aurora Sky facility for orchid and vegetable propagation with minimal capital investment. This will not only increase Bevo's production capability and extended shipping range in Canada and the U.S., but also enable us to generate predictable incremental revenue and adjusted EBITDA.
And with that, now I'd like to turn the call over to Glen for our financial review.
Glen Ibbott -- Chief Financial Officer
Thank you, Miguel, and good afternoon, everyone. Before reviewing our Q2 financial performance, let me take a couple of minutes to discuss our balance sheet and cash flow. I'd like to reinforce what I said a number of times before, and that is, we take great pride in having one of the strongest balance sheets among Canadian LPs and are one of a very few in the net cash position. Of course, we're always on the lookout for further opportunities to improve through smart and defensive capital allocation decisions.
As of yesterday, February 8, we have approximately $310 million of cash, including $65 million of restricted cash, and we believe this is sufficient to fund operations into our cash flow positive. We have only CAD149 million of principal remaining on our convertible loans due in 2024. During Q2, we repurchased $135 million in principal on our convertible notes at a total cost of $128.7 million cash, including accrued interest. The debt we repurchased during calendar 2022 has resulted in cash interest savings that now total approximately $17 million annually.
We also continue to have access to significant capacity under our base shelf prospectus, including approximately $180 million remaining under our ATM program. During Q2, we issued 39.5 million shares for net proceeds of $68.8 million. The current shelf will expire in April, and we do expect to refile a new shelf and ATM program at that time. And we reiterate that the proceeds from share issuance are expected to be used only for strategic purposes.
Our operating cash flow in Q2 consisted of a net lease of $60.6 million. But that included $15.5 million for a number of onetime payments related to our business transformation, $12.4 million for once a year payments such as insurance and Health Canada fees and approximately a $12 million investment in working capital. So we are pleased with the positive impact our business transformations having for our future cash flows. With the restructuring of our business now largely executed, we do not expect onetime payments to recur at these levels.
And we do expect that the combination of reduced costs and increased revenue from the same footprint will be significant levers for the company to reach positive operating cash flow. And at the same time, it is worth noting that there may be some quarter to quarter variability in operating cash flow. As we saw in Q2, when the company achieved significant increases to sales, the long cash conversion cycle of this industry means that investment in working capital may be required, which may negatively impact operating cash flow for that period. Quarterly capital expenditures were approximately $3.5 million, down 36% from the $5.5 million last quarter and more than offset by $14.7 million of cash from the sale of our Polaris facility.
Looking now to Q2 business performance. Q2 total net revenue grew 25% to $61.7 million compared to $49.3 million last quarter. We saw strength across all business segments, while also benefiting from a full quarter contribution from Bevo. We achieved our goal of positive adjusted EBITDA generating $1.4 million.
This was primarily due to growing revenue in our industry-leading Canadian and international medical cannabis operations and from reductions in costs across our business, primarily in SG&A. We've now stabilized the company at a much leaner operating structure and see a real opportunity to drive more revenue from these assets in the future. Let me now address each of our businesses in a bit more detail. Canadian medical revenue was $25.8 million in Q2, up 10% from Q1.
Much of the sequential growth in revenue was driven by a onetime revenue recognition benefit as more shipments than usual or in transit at the end of Q1. However, normalizing for this adjustment, Canadian medical still delivered a 2% increase. The performance that was important, given that most of our final cost reductions were in this segment during Q2 2023. So looking forward to fiscal Q3, we expect the Canadian medical business to perform similarly to Q2, excluding that onetime revenue benefit of $800,000.
International medical revenue was $13.8 million and reflected a 69% increase versus Q1. The segment rebounded from Q1, as expected, through shipments to export markets such as Australia, Poland, U.K. and Cayman Islands and returned to levels more consistent with Q4, 2022. We expect our international business to deliver revenues in fiscal Q3 that are consistent with that of Q2.
Taken together, our medical businesses in Canada and internationally generated $39.5 million of revenue, up 25% from Q1. Medical cannabis represented about 64% of our Q2 revenue, maybe 7% of gross profit. Adjusted gross margin was 61%, down from 67% in the prior quarter. The decrease was primarily driven by higher sales into certain international export markets, which yield a slightly lower adjusted gross margin, but still contribute strong positive gross profit.
Consumer cannabis net revenue was $14.6 million, a 7% increase compared to last quarter. The Q2 increase was driven by growth in both Aurora's premium San Rafael brand and by our value brand, Daily Special, which offers consumers a strong potency, quality and price proposition. Looking forward into fiscal Q3, we expect the Canadian consumer market to continue to be fluid with Aurora's top line revenue being flat sequentially. Adjusted gross margin before fair value adjustments on consumer cannabis net revenue was 20% in Q2 compared to 25% in the prior quarter.
The decrease was primarily driven by the incremental sales of value branded products I just mentioned. Going forward, we, of course, remain committed to maximizing profitability through low-cost production and margin-accretive categories, and all supported by our science leadership. Our controlling stake in Bevo enabled us to recognize $6.6 million in net revenue during Q2, up from $3.3 million in Q1. This increase is a result of a full quarter of contributions compared to only a partial quarter in Q1.
Bevo is categorized as plant propagation in our financial disclosures. As a reminder, Bevo has the seasonal cadence with two thirds of Bevo's annual revenue and EBITDA being realized during the period from January to June. On an annualized basis, that was a business that's steady, predictable and supports our ability to generate positive adjusted EBITDA. Bevo's adjusted gross margin before fair value adjustments was 15% in Q2 compared to 16% in Q1.
The adjustment primarily related to onetime was an impact on fuel costs, which management expects to be very transitory in nature. Due to seasonality, we would expect improved margins in the key spring and summer sales windows. Overall, Aurora's adjusted gross margin before fair value adjustments was 45% in Q2 versus 50% in Q1, still among the industry's best. Excluding the restructuring and nonrecurring costs of $14 million in Q2, SG&A and R&D were well controlled, down 17% sequentially to $26.6 million.
Notably, we have made good on our commitment to reducing SG&A to below $30 million as part of our business transformation plan, a rate that we can sustain going forward. So, pulling all of this together, we generated positive adjusted EBITDA of $1.4 million compared to a loss of $7.4 million in the previous quarter. And finally, just a reminder that our fiscal year 2023 has only three quarters as we have changed our fiscal year end to March 31, and that's in order to achieve certain internal costs and staffing efficiencies. So thanks for your interest.
I'll now turn the call back to Miguel.
Miguel Martin -- Chief Executive Officer
Thanks, Glen. At Aurora, our purpose is opening the world to cannabis as a global leader in this very exciting industry. In that spirit, let me share some final thoughts. First, we are very pleased to have completed our transformation plan delivering on approximately $340 million in annualized savings since February of 2020.
Our entire team's hard work resulted in positive adjusted EBITDA while maintaining a strong balance sheet that will allow us to compete at a very high level and take advantage of future global opportunities. Second, we've done this without sacrificing growth opportunities in our high-margin domestic and international medical cannabis businesses, which remain one of the best places in the industry to invest. Third, we completed our plan during a period of volatility and uncertainty around the Canadian rec market. The good news is, it continues to rationalize, which will give us added opportunity for market share improvement.
Finally, our future success will be enabled by science through continued plant genetics, improving yields and better crop quality. We believe this will drive high-margin new cultivar licensing opportunities in the future and place Aurora at the center of industrywide innovation. Looking forward, we continue to focus on profitable growth opportunities across all segments, ongoing discipline in capital deployment and improving operating cash flow. Taken together, our ability to make progress in these areas will position our shareholders for significant value creation, especially from these levels.
Thank you for your time and interest in Aurora. Operator, please open the line for questions.
Questions & Answers:
Operator
Thank you. [Operator instructions] And our first question comes from the line of Vivien Azer with Cowen. Please proceed with your question.
Vivien Azer -- Cowen and Company -- Analyst
Hi. Thank you. Good evening.
Miguel Martin -- Chief Executive Officer
Good evening, Viv.
Vivien Azer -- Cowen and Company -- Analyst
So, I wanted to dig in on medical cannabis gross margins, please, down a little bit year over year and sequentially. Clearly, it was not an impediment to you guys hitting your target for positive adjusted EBITDA, which is really, really nice to see, and congratulations on that. But given the call out that the margin dilution was coming from frontier market, do you see the kind of current gross margin levels for that business are an appropriate run rate? It seems like you've got a lot of opportunity ahead of you and your mix to frontier market might kind of stay at these levels and or climb a little bit until there's a real catalyst in Germany?
Miguel Martin -- Chief Executive Officer
Yes. I mean -- so as it pertains to medical cannabis, I think structurally we don't see the margin compression that maybe you would see in the rec market. We're up to about 25% of the Canadian business and the reimbursed market, which represents about 80% of our revenues in Canada is at a healthy number that is part of the overall system. Some of that was mix, as you sort of mentioned in Canada.
But structurally, we don't see anything there. When you look internationally, you also don't sort of see those impediments. And yes, there will be places maybe where lower cost items gain a little bit of traction, but because the model is structured in a manner that most of the supply chain takes their margin off of a percentage of the wholesale list and because you see reimbursement in those markets, there's not a structural reason to see margin compression. Secondarily, in the rec business in Canada, you're competing against hundreds of manufacturers and, in some cases, some that need to sell their product at a lower number.
In most of the international markets, you really are competing against three or four other manufacturers because of the significant barriers to entry. So you don't see that competitive aspect where you play on price. And lastly, you really are seeing value from clinicians and physicians and patients as they are interested in quality, which comes at a cost. So overall, we see this as a steady business from a margin standpoint, and we see consistency in market to market.
And while there was a little bit of mix change that affect the overall margins, there's nothing there structurally that gives us pause.
Operator
And the next question comes from the line of Michael Lavery with Piper Sandler. Please proceed with your question.
Michael Lavery -- Piper Sandler -- Analyst
Thank you. Good afternoon.
Miguel Martin -- Chief Executive Officer
Good afternoon, Michael.
Michael Lavery -- Piper Sandler -- Analyst
Just wanted to come back to the ATM. You mentioned you've got the remaining amount to go there. And if I caught it right, I think you also said you would anticipate renewing that. Can you just give us a sense, given where your balance sheet is already, what the thinking is? And I guess, some amount of how much is enough, is there a point at which you would feel like you've exhausted what you need out of ATM? Or is that something that you feel like has got a longer runway? How are you thinking about that?
Miguel Martin -- Chief Executive Officer
Yes. I think it's a great question because it's so much a point of interest right now, which is runway, use of cash, what's the right amount of cash. I think, first and foremost, people should look at a company's actions, maybe more so than even what they say. We've been very, very conservative in our balance sheet.
Right from the beginning, when I got -- became CEO, the company worked extremely hard to have a strong balance sheet, and we saw a lot of this disruption and clearly understand what using the ATM means and what that means to others when you look at it. But first and foremost, we believe that it was important for external stakeholders to see the company to have enough cash to be able to run the business. And obviously, that goes into how much cash you're burning. So we worked extremely hard, and we've seen a progression from at one point, the company at over $100 million a quarter in SG&A now to below 30%.
I'm sort of beating the drum about our cost savings. But overall, it is my belief that the company has to have a certain amount of cash, maybe more so the normal to give people the comfort that we will be here for this inevitable upside for global cannabis. I think there's no question that at some point, you're going to see a significant amount of profitability opportunities around the globe, we believe in medical first. And the question is, who's going to be there? And we think we're going to be there.
So, the use of the ATM is used strategically. I think people have seen us been good stewards of the cash. We have sold assets quickly and at good prices. We've taken converts down in many cases below par.
And Michael, I think we'll continue to do three things. First is, always focus on having a strong balance sheet, so that we will have the wherewithal to be there when these opportunities hit, as well as be there when potential M&A and other things happen, such as Bevo, which we thought was a great play. Secondly, we will be very judicious in our use of cash. And hopefully, people have seen that here.
And third, where possible, we will use it to find margin accretive and profit opportunities. And we were really thrilled this quarter, if you look at our sort of cash use and where it went, in each of our four key businesses, we saw growth. And so, I think you put that all together and you can sort of see that the future will look very similar to how we've used cash in the past.
Operator
And the next question comes from the line of Andrew Carter with Stifel. Please proceed with your question.
Andrew Carter -- Stifel Financial Corp. -- Analyst
Hey, thanks. Good afternoon. So, I guess what I want to know is, do you think you can achieve like strip out candidate adult use, do you think you can be positive EBITDA in that business considering kind of the difficult market? And just kind of a separate question, kind of how you, Miguel, and the board are looking at the business. I think I've got right now, yes, $274 million of enterprise value.
Do you think that captures what the sum of the parts potentially is on the medical business -- Canada medical annuity, Bevo, which you can do there, and then also just the genetics investment difficult to value in the markets. And is that a consideration and something you keep in mind that potentially is a floor to consider here?
Miguel Martin -- Chief Executive Officer
And I think let me start with your last question first, I think absolutely not. We are strong believers in global cannabis as a macro movement and strong believers that medical cannabis in a regulated reimbursed compliant manner is going to be the first mover of all of that. And we are one of the leaders, if not the leaders, in that globally. So clearly, the valuation and where we see ourselves, we don't think is representative of that opportunity, but we don't have complete control over that.
The medical business that was built in Canada and now is finding its way all across the globe in key markets is wonderfully portable, wonderfully defensible and has extremely high margins, as I've talked about. And as we see new markets coming on like Australia and Switzerland and Austria, those are tremendous opportunities that only a small subset of companies will take advantage of and how people value that. So be it the genetics piece and the science piece has been sort of sitting there on the side all along and with having what may be one of the largest cannabis genetic libraries and what may be sort of possessing some of the most important IP around biosynthetics and others, there's going to be value in that, particularly as you get into clinical research and more value. And we'll have to see, but I clearly think our value overall.
Now, the rec piece, can you make money in rec as a stand-alone is sort of a tough question, because we see so many efficiencies and learnings and having both. And it would be an easy sort of answer to say, well, why don't you just get out of rec and focus on medical, which is really a strength for us. But you're starting to see that when you're in a market and you have both, there are significant advantages, and we see that with product lines, we see that with innovation, we see that with production. And I think really importantly, you will see that in Germany, and we're very bullish on not only the opportunities in the progression of medical, but also in rec, and having that key line of facility and others and being able to be there at the beginning of medical and then transition in rec will offer significant advantages.
And so, again, it's easy to sort of take the pieces of the business and compare medical and rec, but for us, and particularly the manufacturer working with science and genetics, we see significant efficiencies and advantages in being in bulk, even if we're not going to be a market leader in every market, say, in rec where we would be in medical.
Operator
And our next question comes from the line of Pablo Zuanic with Cantor Fitzgerald. Please proceed with your question.
Matthew Baker -- Cantor Fitzgerald -- Analyst
This is Matthew Baker on for Pablo. Thank you for taking our questions. I have a two-part question. Firstly, what explains the stickiness of your market share in the Canadian medical market.
And then, on the other hand, why is your medical market share in Germany so much less sticky? And then, as a follow-up, what are your latest thoughts of when German rec sales will begin and do you still think imports will not be allowed?
Miguel Martin -- Chief Executive Officer
Canada is a hard market. They're all sort of hard, but the reason it's so sticky is, we've made really significant investments in this. We've been in a long time, and we think we're pretty good at it. We have roughly a 25% share.
The next closest competitor is at about a 9% share. So this is a piece of business where you have to make a lot of investments, experience matters, particularly with clinicians and physicians, and we're clinics. And you have to continue to invest, call centers, innovation, support mechanisms, science, engagement with key stakeholders and veterans and others. And so, it's just a commitment we've made, and I think you have to hit on all cylinders.
And I think without being sort of arrogant about it, I think we're pretty good at it, been that in a long time in Canada. In other markets, some other folks got there first. And it's not always a first-mover status matters, but I think it takes more time for the benefits of our program. So we're pleased with where we are in Germany.
We don't have a 25 share and there are some other good competitors in there, but again it's four or five companies, so it's not like you're competing against 100 or 200. And so, I think, we're really pleased with that and where we sit in the German market. And as I mentioned in my prepared comments, we're one of only three companies that have a manufacturing license in Germany, which will play a significant role, we think, as they rollout legalization for the rec. Now, in terms of rec, we're really excited about the German process.
I think three primary reasons. First is, they're actively engaging with the EU. And the expectation is, with what they come up with would be applicable in other markets, Poland, Czech Republic and others. And we've heard from those regulators in those markets, but they're looking to what happens in Germany and the EU.
So, it might take a little bit longer, but it will be a much more substantive, a much more broad reaching piece of legislation. We expect to hear some more from the regulator in late spring, and we do expect enhancements to both what we've heard on the rec side, but also on the medical side, which not a lot of people are talking about. And the current administration in Germany has a big initiative on reducing bureaucracy, and only about 30% of the patients today in Germany are able to navigate through their medical qualification process for cannabis products. And if that was cleared up, you'll see a real big change.
0.1% of the adult population in Germany is in that system, and that's in Canada 1%, so any sort of change there will have really outside benefit. So, more -- we'll know a lot more late spring. And as soon as we hear something, we'll let people know. And we do expect some version of rec sales to happen mid-2025, which is when there is a critical election and there have been some promises made about when this is going to launch.
What that looks like, we'll see, but these things may take a little bit longer, but with a country like Germany, it may take a bit and be a little bit more longtime period. But when it happens, it sticks. And so, we're willing to work with them on that.
Operator
And the next question comes from the line of Frederico Gomes from ATB Capital. Please proceed with your question.
Frederico Gomes -- ATB Capital Markets -- Analyst
Hi. Thank you. Good evening. Thanks for taking my question.
My question is just on the adult use side here in Canada. You mentioned that much of your sales increase coming from higher sales of value brands. Should we read into that that -- was that more opportunistic or is there any shift in strategy there, whereby you plan to rely a little bit more on the value segment to grow volume and maybe accelerate growth on the consumer side?
Miguel Martin -- Chief Executive Officer
No, there's no change in strategy. But I will say one thing that people should take-away from this quarter is that Aurora has the unique ability to be opportunistic. So when there is a medical opportunity globally, we can take advantage of it. When there is a medical opportunity domestically in Canada, we can take advantage of it.
And so, most of the change in what happened, and Glen referenced this in his comments, is we found ourselves in a very interesting situation, where we grew some flower for Daily Special, and it came in at a 28 or 29 potency, which is absolutely a super-premium potency band. But because it was already registered with the provinces, do we really have the choice? Do we want to sell it and see the benefit? Or do we want to hold onto it and relist it? We didn't want to relist it. And so, the reality was that product that was in extreme high potency and great quality went out under the Daily Special brand and had a little bit of compression in our overall margin. So, the Thrive team is doing an awesome job, and we do see incremental opportunities to continue to do what we said we're going to do, but where we see things hit in that rec market on the discount play because we're focusing on operating cash flow, we'll take those advantages as we can.
So no change in strategy. It was opportunistic because of the unique situation. And listen, you're thrilled to have that and it's a testament to great genetics and good cultivation that we found ourselves in that situation, and we're thrilled to build out those sales.
Operator
[Operator instructions] Our next question comes from the line of John Zamparo with CIBC. Please proceed with your question.
John Zamparo -- CIBC World Markets -- Analyst
Thanks. Good afternoon. I wanted to ask about the Canada Health acquisition. I know this isn't hugely material, but $20 million in cash is not meaningless in the space either.
So I just would like an update on what this asset brings to the table and what the financial implications of it have been so far.
Miguel Martin -- Chief Executive Officer
Sure, I'll be happy to. I've been talking for a bit. Glen, do you want to talk about Canada Health in that deal?
Glen Ibbott -- Chief Financial Officer
Yes. The folks at Canada Health are very closely attached to some of the key vet influencers in that population. They've been extremely good at building relationships and supporting veteran patients in the medical system, finding the right medicines for them, and just actually kind of almost operating a little bit of a counseling service. We thought that they are a very important part of our supply chain.
And we thought since that business was so incredibly important to our profitability, we needed to make sure that we had that relationship locked up for the long term. So, I think, the acquisition there is really about solidifying the long-term value for our medical business, in particular the funnel of veteran patients and our ability to get very close to those patients, which obviously is critically important to understand their needs. And it has started paying off. We actually launched a new product in our medical portfolio in the last month, a product called Valor, which was the cultivars selected by veterans from our coast facility for a terpene profile and various attributes.
They picked the name and it launched And again, just be that close to really critical patient population has been important for us, and that Canada Health is a big part of that equation.
Operator
[Operator instructions] And the next question comes from the line of Matt Bottomley with Canaccord Genuity. Please proceed with your question.
Matt Bottomley -- Canaccord Genuity -- Analyst
Thank you. Good evening, everyone. Just wanted to touch on the adjusted gross margin again. I know, Glen, you had some prepared remarks about this.
But when you kind of look at the overall trend over the last three, four, even five quarters, it seems like the ratio of these types of adjustments are still fairly meaningful in relation to the size of your overall revenue. So, I understand the general buckets and categories and you have it in your press release here in terms of what those general categories are. But I'm wondering if you could speak to the changes of maybe what's going-in and out of there. I know historically, it was more inventory impairment.
Now, there's more development costs, given that you're in a variety of different growing medical markets internationally. I would expect these types of costs and these types of opportunities and challenges to continue sort of indefinitely. So I'm just wondering how you're anticipating this adjusted line moving just given that your actual audited or reviewed statements have pretty nominal margins from unadjusted standpoint.
Glen Ibbott -- Chief Financial Officer
Yes. So, a couple of things going on in the market. There's certainly the mix across the categories. Market by market, the margins are holding up quite nicely.
So, we still see a strong medical margin as we've seen over the past several years, a number of quarters in the Canadian medical. Consumer, the margin this quarter was generally mix-related as Miguel just described and opportunistic and certainly incremental, combine the extra gross profit. And then, the other key thing you were referring to, there are a couple of things in there that are hitting margins. What we adjust out of our margins are fair value adjustments of course because the non-IFRS thing, but it's confusing, and depreciation.
We're trying to get to a cash margin that will allow you to understand the underlying ability of the business to generate cash. This quarter, there was an adjustment for a onetime effective level. I don't know if you're following natural gas prices, but they spike tenfold in December due to some weather in California and they came right back down in January. So, it was just the first time, never seen that before onetime transitory thing.
That was very reflective about, true. Gross margin, so we will look at trying to paint a picture for you. The underlying ability of the company to generate cash flow. We think that we will see less.
Adjustments through EBITDA as we go forward now that we've finished the business transformation or completed our objective there. There has been through that transformation with facility shutdowns and changes in transferring manufacturing lines as G&A reductions, so a fair amount of noise in our financials. But I think we're past that now in Q3, you should see the level of those sorts of adjustments coming down.
Operator
Thank you. At this time, we have reached the end-of-the question-and-answer session. I would like to turn the floor back over to Miguel for any closing comments.
Miguel Martin -- Chief Executive Officer
Well, first and foremost, let me thank everybody for your interest and time. We're thrilled with where we are. I would say this is absolutely not the finish line. If you take anything away from this call is that our strategic plan is working and we're thrilled with what we did here.
But we're also thrilled with where we're going forward. I appreciate everybody for your interest and look forward to talking to you in the future. All the best. Bye.
Operator
[Operator signoff]
Duration: 0 minutes
Call participants:
Ananth Krishnan -- Vice President, Corporate Development and Investor Relations
Miguel Martin -- Chief Executive Officer
Glen Ibbott -- Chief Financial Officer
Vivien Azer -- Cowen and Company -- Analyst
Michael Lavery -- Piper Sandler -- Analyst
Andrew Carter -- Stifel Financial Corp. -- Analyst
Matthew Baker -- Cantor Fitzgerald -- Analyst
Frederico Gomes -- ATB Capital Markets -- Analyst
John Zamparo -- CIBC World Markets -- Analyst
Matt Bottomley -- Canaccord Genuity -- Analyst
More ACB analysis
All earnings call transcripts
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis (NASDAQ: ACB) Q2 2023 Earnings Call Feb 09, 2023, 5:00 p.m. Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Matthew Baker -- Cantor Fitzgerald -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC World Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Finally, we plan to drive significant shareholder value over the long run through our controlling interest in Bevo, which is one of the largest suppliers of propagated vegetables and ornamental plants in North America. | Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Matthew Baker -- Cantor Fitzgerald -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC World Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Aurora Cannabis (NASDAQ: ACB) Q2 2023 Earnings Call Feb 09, 2023, 5:00 p.m. The decrease was primarily driven by higher sales into certain international export markets, which yield a slightly lower adjusted gross margin, but still contribute strong positive gross profit. | Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Matthew Baker -- Cantor Fitzgerald -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC World Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Aurora Cannabis (NASDAQ: ACB) Q2 2023 Earnings Call Feb 09, 2023, 5:00 p.m. Notably, our Canadian medical business benefits from strong patient retention with insured patients comprising about 80% of all medical sales as part of a concentrated market with significant barriers to entry. | Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Matthew Baker -- Cantor Fitzgerald -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC World Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Aurora Cannabis (NASDAQ: ACB) Q2 2023 Earnings Call Feb 09, 2023, 5:00 p.m. Thank you for your time and interest in Aurora. |
36422.0 | 2023-02-10 00:00:00 UTC | 3 Ultra-Popular Stocks the Bond Market Believes Are Headed to $0 | ACB | https://www.nasdaq.com/articles/3-ultra-popular-stocks-the-bond-market-believes-are-headed-to-%240 | nan | nan | Investing is very much an inexact science. While it would be great if companies that executed well rose in value and poor-performing businesses saw their share prices decline, it doesn't always work out this way. Investor sentiment and technical analysis -- using chart patterns to determine whether a stock will head higher or lower -- are just some of the factors that can disrupt traditional fundamental analysis, which lets income statements and balance sheets dictate where a company's share price will head.
However, the bond market isn't swayed by investor emotion and technical analysis in the same way stocks can be influenced. Corporate bond traders are simply focused on the health of the underlying business and the likelihood they'll be repaid in full when the note they hold matures.
Image source: Getty Images.
Without getting too far into the weeds, bonds are typically issued at par -- i.e., 100% of face value. Financially sound companies will usually see their bonds trade in a range of perhaps 10% below to 5% above face value.
On the other hand, a company whose bonds go for 50% or more below their initial issue price are sounding a clear warning that the underlying equity may be worthless. Bondholders have priority over common stockholders in the event that a company seeks to reorganize under Chapter 11 or liquidates under Chapter 7 bankruptcy protection. If bond prices plummet, it's usually a sign that the bond market believes a stock could head to $0.
Based on their current bond prices, the following three ultra-popular stocks may eventually be worthless.
Bed Bath & Beyond
The first exceptionally popular stock that could eventually head to $0, based on what the bond market is telling Wall Street, is home furnishings retailer Bed Bath & Beyond (NASDAQ: BBBY).
The company has debt lots that come due in 2024, 2034, and 2044. As of Feb. 7, 2023, these bonds were respectively trading for roughly $0.15, $0.11, and $0.14 on the dollar. In other words, they were all between 85% and 89% below par, which is a pretty good indication that bondholders are doubtful they'll be repaid in full.
Bed Bath & Beyond did work out a deal to secure up to $1.025 billion in cash over time ($225 million secured up front) earlier this week. However, securing this financing involved the issuance of convertible preferred stock and warrants that could balloon its outstanding share count by nearly 700% to 900 million shares. It's an exceptionally dilutive deal that favors Hudson Bay Capital, which purchased most of these convertible preferred shares.
The issue for Bed Bath & Beyond is that raising capital doesn't resolve its underlying operating problems. It's a predominantly brick-and-mortar retailer with products that aren't differentiated enough to drive consumers into its stores. As a result, it's been eaten alive by online retailers in recent years.
Worse yet, management made the decision to waste capital on share buybacks, even as the company's business deteriorated. Without the capital wasted on share buybacks, Bed Bath & Beyond might have had enough money to enact a turnaround, or at the very least navigate an economic downturn, without having to seek a highly dilutive convertible preferred stock offering.
My suspicion is the company's capital raise bought it some time, but it ultimately won't be enough to save the company from restructuring under Chapter 11. If that were to occur, there wouldn't be any value left for common stockholders.
Carvana
A second ultra-popular stock the bond market believes may head to $0 is online used car buying-and-selling platform Carvana (NYSE: CVNA).
Carvana has four debt lots that stand out as particularly concerning. The company's $500 million due in 2025, $600 million due in 2028, $750 million due in 2029, and $3.275 billion due in 2030 were all issued at face value. However, the 2025, 2028, 2029, and 2030 notes are currently trading at $0.53, $0.42, $0.28, and $0.50 on the dollar, respectively.
These signify distressed levels imply that Carvana may not be able to meet its debt obligations. More importantly, it infers the common equity is potentially worthless.
During the pandemic, Carvana was perfectly positioned to grow at a torrid pace. With people effectively stuck in their homes, used car purchases and sales were easily completed on its platform. Despite this perfect opportunity for Carvana, the company wasn't able to generate a full-year profit.
With the worst of the pandemic now in the rearview mirror, the wheels have completely come off of Carvana's operating model. There's no longer any sizable incentive for shoppers to buy online when they can easily walk into a dealership to view and test-drive new and used vehicles.
Additionally, interest rates are climbing at their fastest pace in four decades, which makes financing a new or used car purchase costlier. When coupled with a plunging U.S. personal saving rate, it's no surprise that we've begun to see used vehicle sales slowing down.
Even with Carvana reducing its ad spend and shrinking its website inventory, profitability is likely three or more years away. With the company continuing to burn cash, an eventual decline to $0 is in the realm of possibilities.
Image source: Getty Images.
Aurora Cannabis
The third ultra-popular stock the bond market implies is eventually headed to $0 is Canadian licensed cannabis producer Aurora Cannabis (NASDAQ: ACB).
The only outstanding debt Aurora has at the moment is what remains of a 2019 convertible debt offering totaling 345 million Canadian dollars (CAD) (about $257.6 million in U.S. dollars). In December 2022, it repurchased $102.5 million CAD of these notes, which left just $148 million CAD outstanding. Despite having just 43% of the initial offering left to be repaid, these notes are trading at only $0.30 -- i.e., 70% below their issue price.
In one respect, Aurora Cannabis and its peers were somewhat sabotaged by Canadian federal and provincial regulators. The slow rollout of cultivation and retail licenses in key provinces (e.g., Ontario) didn't allow legalized marijuana stocks to adequately compete against gray-market cannabis.
But make no mistake about it: Aurora Cannabis shot itself in the foot plenty of times. It made around a dozen grossly overpriced acquisitions and was on track to produce more than 600,000 kilos of cannabis annually, if all of its properties were fully developed. To offer some context, Canadians consumed around 391,000 kilos of legal weed in 2022. Aurora's unwarranted buying spree led to billions of dollars in write-downs.
Another problem for Aurora Cannabis is that Canadian consumers have gravitated toward value-priced dried cannabis flower. Licensed producers were counting on strong sales for high-margin derivatives, such as vapes and edibles, but this simply hasn't materialized.
However, the nail in the coffin for Aurora Cannabis has been management's penchant for dilution to raise capital. Between June 30, 2014, and Sept. 30, 2022, Aurora's outstanding share count ballooned from around 1.3 million to just over 300 million. Keep in mind, this factors in the company's 1-for-12 reverse stock split that was conducted in May 2020. This incessant dilution has driven Aurora's stock back down to $1.
Despite management eyeing a push to positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), Aurora remains a long way from becoming truly profitable on an income basis. A mountain of previous miscues may be too much to overcome.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis The third ultra-popular stock the bond market implies is eventually headed to $0 is Canadian licensed cannabis producer Aurora Cannabis (NASDAQ: ACB). Without the capital wasted on share buybacks, Bed Bath & Beyond might have had enough money to enact a turnaround, or at the very least navigate an economic downturn, without having to seek a highly dilutive convertible preferred stock offering. The slow rollout of cultivation and retail licenses in key provinces (e.g., Ontario) didn't allow legalized marijuana stocks to adequately compete against gray-market cannabis. | Aurora Cannabis The third ultra-popular stock the bond market implies is eventually headed to $0 is Canadian licensed cannabis producer Aurora Cannabis (NASDAQ: ACB). Carvana A second ultra-popular stock the bond market believes may head to $0 is online used car buying-and-selling platform Carvana (NYSE: CVNA). The only outstanding debt Aurora has at the moment is what remains of a 2019 convertible debt offering totaling 345 million Canadian dollars (CAD) (about $257.6 million in U.S. dollars). | Aurora Cannabis The third ultra-popular stock the bond market implies is eventually headed to $0 is Canadian licensed cannabis producer Aurora Cannabis (NASDAQ: ACB). Bed Bath & Beyond The first exceptionally popular stock that could eventually head to $0, based on what the bond market is telling Wall Street, is home furnishings retailer Bed Bath & Beyond (NASDAQ: BBBY). Carvana A second ultra-popular stock the bond market believes may head to $0 is online used car buying-and-selling platform Carvana (NYSE: CVNA). | Aurora Cannabis The third ultra-popular stock the bond market implies is eventually headed to $0 is Canadian licensed cannabis producer Aurora Cannabis (NASDAQ: ACB). The only outstanding debt Aurora has at the moment is what remains of a 2019 convertible debt offering totaling 345 million Canadian dollars (CAD) (about $257.6 million in U.S. dollars). Despite having just 43% of the initial offering left to be repaid, these notes are trading at only $0.30 -- i.e., 70% below their issue price. |
36423.0 | 2023-02-09 00:00:00 UTC | Aurora Cannabis Inc. (ACB) Reports Q2 Loss, Tops Revenue Estimates | ACB | https://www.nasdaq.com/articles/aurora-cannabis-inc.-acb-reports-q2-loss-tops-revenue-estimates-0 | nan | nan | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.14 per share versus the Zacks Consensus Estimate of a loss of $0.07. This compares to loss of $0.42 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -100%. A quarter ago, it was expected that this company would post a loss of $0.09 per share when it actually produced a loss of $0.08, delivering a surprise of 11.11%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $50.95 million for the quarter ended December 2022, surpassing the Zacks Consensus Estimate by 19.61%. This compares to year-ago revenues of $48.07 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Aurora Cannabis Inc. Shares have added about 6.3% since the beginning of the year versus the S&P 500's gain of 7.3%.
What's Next for Aurora Cannabis Inc.
While Aurora Cannabis Inc. Has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Aurora Cannabis Inc. Favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.06 on $48.38 million in revenues for the coming quarter and -$0.34 on $176.58 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Products is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
LeMaitre Vascular (LMAT), another stock in the same industry, has yet to report results for the quarter ended December 2022. The results are expected to be released on February 23.
This medical device maker is expected to post quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of -7.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
LeMaitre Vascular's revenues are expected to be $41.19 million, up 4.3% from the year-ago quarter.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.14 per share versus the Zacks Consensus Estimate of a loss of $0.07. Click to get this free report Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report LeMaitre Vascular, Inc. (LMAT) : Free Stock Analysis Report To read this article on Zacks.com click here. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. | Click to get this free report Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report LeMaitre Vascular, Inc. (LMAT) : Free Stock Analysis Report To read this article on Zacks.com click here. Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.14 per share versus the Zacks Consensus Estimate of a loss of $0.07. Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $50.95 million for the quarter ended December 2022, surpassing the Zacks Consensus Estimate by 19.61%. | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.14 per share versus the Zacks Consensus Estimate of a loss of $0.07. Click to get this free report Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report LeMaitre Vascular, Inc. (LMAT) : Free Stock Analysis Report To read this article on Zacks.com click here. Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $50.95 million for the quarter ended December 2022, surpassing the Zacks Consensus Estimate by 19.61%. | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.14 per share versus the Zacks Consensus Estimate of a loss of $0.07. Click to get this free report Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report LeMaitre Vascular, Inc. (LMAT) : Free Stock Analysis Report To read this article on Zacks.com click here. The company has topped consensus revenue estimates two times over the last four quarters. |
36424.0 | 2023-02-07 00:00:00 UTC | Is Aurora Cannabis Headed for Another Reverse Stock Split? | ACB | https://www.nasdaq.com/articles/is-aurora-cannabis-headed-for-another-reverse-stock-split | nan | nan | Did you know that in five years, shares of Aurora Cannabis (NASDAQ: ACB) have plunged an incredible 99%? And even as the company has shifted from focusing on growth to cutting costs and improving its bottom line, that hasn't led to a recovery in its share price; last year, the stock still fell 83%. In 2020, the company did a 1-for-12 reverse stock split to help get it comfortably up over $1 to stay listed on the NYSE and to give it a bit of a buffer as well, presumably so it wouldn't need to do another reverse split for some time.
But here we are nearly three years later, and Aurora Cannabis is back to trading at around $1 per share. Is another reverse stock split coming, and if so, should investors dump the stock now?
The company's financials aren't showing progress
It would require a copious amount of optimism to be bullish on Aurora's prospects right now. And that's because despite the company laying off staff and shutting down plants, it remains unprofitable and it has struggled to generate any sales growth whatsoever.
ACB Revenue (Quarterly YoY Growth) data by YCharts
Why things could get worse -- this week
Investors should brace for what could be a tough month for the stock as Aurora Cannabis reports its latest earnings numbers this Thursday (Feb. 9).
On its last earnings release in November, the company reiterated that it was on track for reaching adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability by the end of 2022 -- that's this coming quarter. Last quarter, its adjusted EBITDA loss totaled 8.7 million Canadian dollars. The company is getting close to profitability -- on an adjusted basis -- but if it fails to meet that target, watch out because the sell-off could be swift and severe.
And at the same time, I'm not convinced that achieved adjusted EBITDA profitability is going to make up for what's still a disappointing business that is burning through cash and struggling to grow. There are plenty of risks but not a whole lot of potential upside in the company's upcoming earnings release.
Conditions in the industry also don't look great
Aurora's challenges aren't exclusive to its own business. Other cannabis companies are struggling too. Last month, multi-state marijuana operator Curaleaf Holdings announced it was shutting down its production and cultivation facilities in three states -- California, Colorado, and Oregon.
Cannabis companies by and large are struggling with growth. Inflation certainly doesn't help with the affordability of legal pot, and it may only end up driving people back to the illicit market. And the competition is one of the reasons Curaleaf cited for giving up on what are three of the industry's largest markets.
Meanwhile, now that the Democrats have lost control of the House, the prospects for marijuana reform and legalization also look bleaker than ever. The outlook isn't encouraging in the marijuana industry right now, and that is only going to make investors more bearish on pot stocks in general.
Investors should brace for a reverse split
Aurora Cannabis finished last week above the $1 mark so a reverse split isn't imminent. But at this rate, given the company's poor results and the struggling cannabis industry as a whole, it's really only a question of if and not when a reverse split will happen as it's hard to see a scenario where Aurora's stock price doesn't continue to fall further this year.
Technically a reverse split won't change your investment in the stock as the value remains the same and only the number of shares you own changes. However, the negative press can often send shares of a pot stock down since the announcement serves as a reminder that the business isn't doing well.
Investors should consider selling their shares of the company as there's little reason for optimism at this point, and the stock's freefall may only get deeper.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ACB Revenue (Quarterly YoY Growth) data by YCharts Why things could get worse -- this week Investors should brace for what could be a tough month for the stock as Aurora Cannabis reports its latest earnings numbers this Thursday (Feb. 9). Did you know that in five years, shares of Aurora Cannabis (NASDAQ: ACB) have plunged an incredible 99%? And even as the company has shifted from focusing on growth to cutting costs and improving its bottom line, that hasn't led to a recovery in its share price; last year, the stock still fell 83%. | Did you know that in five years, shares of Aurora Cannabis (NASDAQ: ACB) have plunged an incredible 99%? ACB Revenue (Quarterly YoY Growth) data by YCharts Why things could get worse -- this week Investors should brace for what could be a tough month for the stock as Aurora Cannabis reports its latest earnings numbers this Thursday (Feb. 9). Is another reverse stock split coming, and if so, should investors dump the stock now? | Did you know that in five years, shares of Aurora Cannabis (NASDAQ: ACB) have plunged an incredible 99%? ACB Revenue (Quarterly YoY Growth) data by YCharts Why things could get worse -- this week Investors should brace for what could be a tough month for the stock as Aurora Cannabis reports its latest earnings numbers this Thursday (Feb. 9). In 2020, the company did a 1-for-12 reverse stock split to help get it comfortably up over $1 to stay listed on the NYSE and to give it a bit of a buffer as well, presumably so it wouldn't need to do another reverse split for some time. | Did you know that in five years, shares of Aurora Cannabis (NASDAQ: ACB) have plunged an incredible 99%? ACB Revenue (Quarterly YoY Growth) data by YCharts Why things could get worse -- this week Investors should brace for what could be a tough month for the stock as Aurora Cannabis reports its latest earnings numbers this Thursday (Feb. 9). Is another reverse stock split coming, and if so, should investors dump the stock now? |
36425.0 | 2023-02-02 00:00:00 UTC | Why SNDL, Aurora Cannabis, and Tilray Stocks Popped Today | ACB | https://www.nasdaq.com/articles/why-sndl-aurora-cannabis-and-tilray-stocks-popped-today | nan | nan | What happened
Investors in marijuana stocks such as SNDL (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Tilray (NASDAQ: TLRY), are having a good day Thursday -- and not just because the Federal Reserve decided to only raise interest rates 0.25% yesterday. On top of that good news, you see, there's a new report by the American Medical Association (AMA) that argues medical marijuana may be at least part of the solution to solving America's opioid crisis.
And hearing that, investors are bidding up shares of SNDL by 4.7% today (through 11:10 a.m. ET), and delivering gains of 5.5% apiece to both Aurora Cannabis and Tilray investors.
So what
So what is it about the AMA report that may be getting investors excited?
As Marijuana Moment reports, the AMA surveyed 8,165 patients currently using opioid drugs to treat chronic pain, who enrolled in a program to add cannabis to their pain treatment program. On average, the study showed that such patients were able to cut their consumption of potentially addictive opioids by anywhere from 47% to 51% after taking cannabis for eight months. (Note that this is now the second such study that's been backed by the AMA in less than a month, adding credibility to the conclusions.)
The effect was not immediate. Perhaps the most interesting data from the AMA study (interesting to marijuana investors at least), was the fact that patients seemed to need to get used to using marijuana instead of opioids for the full effects to manifest. Patients who used cannabis for less than 30 days were only able to cut their opioid consumption by between 4% and 14%.
Conclusion: Short-term use of cannabis may not dramatically cut opioid dependence, but long-term use surely does. And that's good news for any investor who likes the idea of recurring revenue streams.
Now what
Investors today seem to be taking the AMA report as another argument in favor of legalizing marijuana -- at least for medicinal purposes. Then again, marijuana is already legal for these purposes in 42 U.S. states and territories (versus 24 states and territories where recreational use is permitted). So there's also a question about how much expanded use of marijuana for pain management will really grow the market, absent actual federal-level legalization of marijuana for recreational use.
On balance, therefore, no matter how good today's news is, I'm still not certain it's going to move the needle much for marijuana investors. Full-scale, federal legalization is still probably the sine qua non for growing this market significantly. And unless federal legalization happens sooner, investors are probably still another few years away from any of the big marijuana stocks earning any profits.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Investors in marijuana stocks such as SNDL (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Tilray (NASDAQ: TLRY), are having a good day Thursday -- and not just because the Federal Reserve decided to only raise interest rates 0.25% yesterday. On average, the study showed that such patients were able to cut their consumption of potentially addictive opioids by anywhere from 47% to 51% after taking cannabis for eight months. Now what Investors today seem to be taking the AMA report as another argument in favor of legalizing marijuana -- at least for medicinal purposes. | What happened Investors in marijuana stocks such as SNDL (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Tilray (NASDAQ: TLRY), are having a good day Thursday -- and not just because the Federal Reserve decided to only raise interest rates 0.25% yesterday. Perhaps the most interesting data from the AMA study (interesting to marijuana investors at least), was the fact that patients seemed to need to get used to using marijuana instead of opioids for the full effects to manifest. Then again, marijuana is already legal for these purposes in 42 U.S. states and territories (versus 24 states and territories where recreational use is permitted). | What happened Investors in marijuana stocks such as SNDL (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Tilray (NASDAQ: TLRY), are having a good day Thursday -- and not just because the Federal Reserve decided to only raise interest rates 0.25% yesterday. As Marijuana Moment reports, the AMA surveyed 8,165 patients currently using opioid drugs to treat chronic pain, who enrolled in a program to add cannabis to their pain treatment program. Perhaps the most interesting data from the AMA study (interesting to marijuana investors at least), was the fact that patients seemed to need to get used to using marijuana instead of opioids for the full effects to manifest. | What happened Investors in marijuana stocks such as SNDL (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Tilray (NASDAQ: TLRY), are having a good day Thursday -- and not just because the Federal Reserve decided to only raise interest rates 0.25% yesterday. Perhaps the most interesting data from the AMA study (interesting to marijuana investors at least), was the fact that patients seemed to need to get used to using marijuana instead of opioids for the full effects to manifest. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Sndl wasn't one of them! |
36426.0 | 2023-02-02 00:00:00 UTC | Is It Too Early to Invest in Cannabis Stocks? | ACB | https://www.nasdaq.com/articles/is-it-too-early-to-invest-in-cannabis-stocks | nan | nan | By 2027, the cannabis industry could be worth $82.3 billion, according to estimates from MarketsandMarkets. Many analysts are projecting significant growth for the sector as countries and states legalize it -- either fully or for medical use -- resulting in more opportunities opening up around the world.
But that isn't a guarantee, and those growth projections are based on many assumptions. If and when legalization actually takes place in the U.S. and other parts of the world remains anyone's guess.
For investors, it raises the question of whether it's too early to invest in the cannabis industry. Until legalization in a top market like the U.S. takes place, companies might be scrambling to find growth opportunities.
And by the time legalization does happen (assuming it does at all), the industry could look a lot different. Below, I'll look at some of the risks of investing in the sector right now, and whether it makes sense to do so.
Many marijuana companies are unprofitable
Oftentimes when you see a marijuana company report positive net income, it's due to gains on the revaluation of inventory or nonoperating items. When looking at operating income, however, the businesses are usually well in the red.
TLRY net income (quarterly) data by YCharts.
A lack of profitability hasn't always hurt the cannabis industry since investors have accepted that it will take a while to get to breakeven. But a significant problem with a consistently unprofitable business is that it can lead to a significant outflow of cash.
Cannabis companies are often burning tons of cash
If a business isn't generating positive cash flow from its day-to-day operations, it can lead to dilution since it might resort to share offerings to raise cash unless it is sitting on a ton of money.
TLRY cash from operations (TTM) data by YCharts. TTM = trailing 12 months.
Canopy Growth (NASDAQ: CGC) has an abysmal track record for cash burn, but because beer maker Constellation Brands invested $4 billion into the company back in 2018, it isn't in a dire situation. As of Sept. 30, 2022, Canopy reported cash and short-term investments totaling 1.1 billion Canadian dollars ($821.9 million). It isn't running out of cash anytime soon, but its situation isn't sustainable. Sooner or later, a lack of money could become a big problem for the business.
Growth has stalled
Perhaps the most troubling trend of all in the industry is that these companies can't even be counted on for consistent sales growth anymore. Revenue growth was often enough to excuse a lack of profitability. But as that appears to be gone, at least for now, investors have been left wondering whether it's worth buying shares of cannabis stocks.
TLRY revenue (quarterly YoY growth) data by YCharts. YoY = year over year.
I have excluded SNDL (NASDAQ: SNDL) from the above chart as its results would skew the data. The company has achieved some incredible growth, but it has done so by relying heavily on acquisitions.
Most investors should avoid the industry right now
The main argument for investing in cannabis stocks centers around the promises of growth and long-term potential. But because that largely depends on hopes of U.S. marijuana legalization on the federal level, it can be a risky strategy; there's no guarantee that it will happen anytime soon. In the meantime, losses might be mounting and businesses could be running out of money.
For the vast majority of investors, it is too early to invest in the cannabis industry. There is a significant danger that you can incur deep losses while waiting for legalization, as many investors have already.
Unless you have many investing years left (at least 10) and are OK with the high risk that's involved with investing in cannabis companies, you're better off waiting until legalization actually takes place in the U.S., assuming that it does at all.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Brands. The Motley Fool recommends Sndl. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Many analysts are projecting significant growth for the sector as countries and states legalize it -- either fully or for medical use -- resulting in more opportunities opening up around the world. Canopy Growth (NASDAQ: CGC) has an abysmal track record for cash burn, but because beer maker Constellation Brands invested $4 billion into the company back in 2018, it isn't in a dire situation. Most investors should avoid the industry right now The main argument for investing in cannabis stocks centers around the promises of growth and long-term potential. | Many marijuana companies are unprofitable Oftentimes when you see a marijuana company report positive net income, it's due to gains on the revaluation of inventory or nonoperating items. TLRY net income (quarterly) data by YCharts. TLRY revenue (quarterly YoY growth) data by YCharts. | Cannabis companies are often burning tons of cash If a business isn't generating positive cash flow from its day-to-day operations, it can lead to dilution since it might resort to share offerings to raise cash unless it is sitting on a ton of money. Canopy Growth (NASDAQ: CGC) has an abysmal track record for cash burn, but because beer maker Constellation Brands invested $4 billion into the company back in 2018, it isn't in a dire situation. Unless you have many investing years left (at least 10) and are OK with the high risk that's involved with investing in cannabis companies, you're better off waiting until legalization actually takes place in the U.S., assuming that it does at all. | Many analysts are projecting significant growth for the sector as countries and states legalize it -- either fully or for medical use -- resulting in more opportunities opening up around the world. Unless you have many investing years left (at least 10) and are OK with the high risk that's involved with investing in cannabis companies, you're better off waiting until legalization actually takes place in the U.S., assuming that it does at all. The Motley Fool has positions in and recommends Constellation Brands. |
36427.0 | 2023-01-31 00:00:00 UTC | Is Aurora Cannabis (ACB) Outperforming Other Medical Stocks This Year? | ACB | https://www.nasdaq.com/articles/is-aurora-cannabis-acb-outperforming-other-medical-stocks-this-year | nan | nan | Investors interested in Medical stocks should always be looking to find the best-performing companies in the group. Is Aurora Cannabis Inc. (ACB) one of those stocks right now? Let's take a closer look at the stock's year-to-date performance to find out.
Aurora Cannabis Inc. is a member of our Medical group, which includes 1178 different companies and currently sits at #7 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Aurora Cannabis Inc. is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for ACB's full-year earnings has moved 9% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
According to our latest data, ACB has moved about 5.4% on a year-to-date basis. In comparison, Medical companies have returned an average of -18.2%. This means that Aurora Cannabis Inc. is outperforming the sector as a whole this year.
Cabaletta Bio, Inc. (CABA) is another Medical stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 23.9%.
Over the past three months, Cabaletta Bio, Inc.'s consensus EPS estimate for the current year has increased 11.5%. The stock currently has a Zacks Rank #1 (Strong Buy).
Looking more specifically, Aurora Cannabis Inc. belongs to the Medical - Products industry, which includes 103 individual stocks and currently sits at #149 in the Zacks Industry Rank. This group has lost an average of 41.9% so far this year, so ACB is performing better in this area.
In contrast, Cabaletta Bio, Inc. falls under the Medical - Biomedical and Genetics industry. Currently, this industry has 558 stocks and is ranked #87. Since the beginning of the year, the industry has moved -19.2%.
Aurora Cannabis Inc. and Cabaletta Bio, Inc. could continue their solid performance, so investors interested in Medical stocks should continue to pay close attention to these stocks.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Is Aurora Cannabis Inc. (ACB) one of those stocks right now? Over the past three months, the Zacks Consensus Estimate for ACB's full-year earnings has moved 9% higher. According to our latest data, ACB has moved about 5.4% on a year-to-date basis. | Click to get this free report Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report Cabaletta Bio, Inc. (CABA) : Free Stock Analysis Report To read this article on Zacks.com click here. Is Aurora Cannabis Inc. (ACB) one of those stocks right now? Over the past three months, the Zacks Consensus Estimate for ACB's full-year earnings has moved 9% higher. | Click to get this free report Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report Cabaletta Bio, Inc. (CABA) : Free Stock Analysis Report To read this article on Zacks.com click here. Is Aurora Cannabis Inc. (ACB) one of those stocks right now? Over the past three months, the Zacks Consensus Estimate for ACB's full-year earnings has moved 9% higher. | Is Aurora Cannabis Inc. (ACB) one of those stocks right now? Over the past three months, the Zacks Consensus Estimate for ACB's full-year earnings has moved 9% higher. According to our latest data, ACB has moved about 5.4% on a year-to-date basis. |
36428.0 | 2023-01-30 00:00:00 UTC | Can Aurora Cannabis Stock Deliver 10X Returns by 2033? | ACB | https://www.nasdaq.com/articles/can-aurora-cannabis-stock-deliver-10x-returns-by-2033 | nan | nan | Stocks capable of delivering 1,000% returns on capital are exceedingly rare. Fortunately, there are a few traits shared by most of these ultra-high-growth stocks that can help investors spot potential diamonds in the rough.
First off, a massive valuation gap must exist between a company's current share price and its fair value estimate. Under normal circumstances, the market is fairly efficient at pricing equities, but sizable valuation gaps can form when Wall Street has serious doubts about a company's business model.
Image Source: Getty Images.
Second, and perhaps most importantly, the company must be able to build a solid competitive moat to protect profits over the long-term. Armed with this background, let's consider whether Aurora Cannabis (NASDAQ: ACB) checks these boxes -- potentially making it a candidate for 10X returns.
Wall Street is convinced an enormous valuation gap exists
Aurora is a top Canadian cannabis cultivator with global aspirations. The company currently sports the largest share of the medical cannabis space in Canada, a growing footprint in Europe with positions in France, Germany, Poland, and the Netherlands, and other various international operations. Since inception, Aurora has placed a heavy emphasis on building out an industry-leading genetics, breeding, and biosynthetics platform.
Its Aurora Coast breeding program in Vancouver Island's Comox Valley, for instance, has successfully developed new cannabis strains with THC levels greater than 28%, along with highly aromatic terpene profiles. That's a big deal, because consumers have consistently shown a preference for high-potency and aromatic dried flower products.
Does a valuation gap exist? Wall Street analysts think Aurora's stock is fairly valued at $4 per share because of its immense scale, unique breeding program, and growing international footprint. Aurora's stock, however, is presently trading at a mere $1.02 at the time of this writing. Put simply, Aurora's stock might have an upside potential of 292% over the next 12 months, which definitely qualifies as a valuation gap.
Longer-term, Aurora's stock may be even more grossly undervalued. Most analysts expect the global cannabis industry to evolve into a $100 billion-plus industry over the next 10 years. Aurora, for its part, would only need to capture 1% to 2% of this sizable market to deliver 10X returns for shareholders. That's not exactly an unreasonable market share forecast for a company with an established business in Canada, a quickly growing international prescence, and a top flight breeding program.
All told, Aurora stock does have a shot at delivering 10X returns for shareholders by 2033.
Aurora lacks this key element
Aurora isn't a slam dunk investment, however. Far from it. The cannabis company's shares have steadily lost value since their public debut, thanks to management's reliance on public offerings to raise capital, an overly aggressive expansion plan, fundamental supply and-demand problems in its home market, the slow pace of legalization globally, among other problems.
Most problematically, though, is the fact that Aurora -- along with every other cannabis company -- doesn't have a straightforward way to build a competitive moat. Brand recognition in the cannabis space is a tough ask due to governmental restrictions on marketing and packaging. Moreover, the confluence of a thriving black market, high excise taxes, high operating costs, and fierce competition from legal entities keep all of these companies from benefiting from economies of scale.
Overall, Aurora won't be able to address the competitive moat issue until the industry has gotten past some of these early growing pains.
What's the verdict?
The bottom line is that Aurora's eye-popping upside potential isn't all that far-fetched. Global cannabis sales are rising by double-digits every year, and the industry is close to a tipping point from a legalization standpoint. To benefit from these powerful tailwinds, though, Aurora will have to figure out a way to survive in this harsh business climate.
On this note, the company recently announced an initiative to convert some of its grow facilities to orchid and vegetable propagation areas, which may help lower its cash burn rate. However, Aurora may have to build out other revenue streams to secure its long-term financing requirements.
Keeping with this theme, competitors like Tilray Brands and SNDL recently jumped into the alcoholic beverage space. Aurora will likely have to find a similar solution to wait out the industry's slow pace of global development. If management can tick this box, however, Aurora's stock could be a bona fide diamond in the rough.
10 stocks we like better than Aurora Cannabis
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George Budwell has no position in any of the stocks mentioned. The Motley Fool recommends Sndl. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Armed with this background, let's consider whether Aurora Cannabis (NASDAQ: ACB) checks these boxes -- potentially making it a candidate for 10X returns. Under normal circumstances, the market is fairly efficient at pricing equities, but sizable valuation gaps can form when Wall Street has serious doubts about a company's business model. The company currently sports the largest share of the medical cannabis space in Canada, a growing footprint in Europe with positions in France, Germany, Poland, and the Netherlands, and other various international operations. | Armed with this background, let's consider whether Aurora Cannabis (NASDAQ: ACB) checks these boxes -- potentially making it a candidate for 10X returns. Wall Street analysts think Aurora's stock is fairly valued at $4 per share because of its immense scale, unique breeding program, and growing international footprint. That's not exactly an unreasonable market share forecast for a company with an established business in Canada, a quickly growing international prescence, and a top flight breeding program. | Armed with this background, let's consider whether Aurora Cannabis (NASDAQ: ACB) checks these boxes -- potentially making it a candidate for 10X returns. Wall Street analysts think Aurora's stock is fairly valued at $4 per share because of its immense scale, unique breeding program, and growing international footprint. 10 stocks we like better than Aurora Cannabis When our award-winning analyst team has a stock tip, it can pay to listen. | Armed with this background, let's consider whether Aurora Cannabis (NASDAQ: ACB) checks these boxes -- potentially making it a candidate for 10X returns. Wall Street analysts think Aurora's stock is fairly valued at $4 per share because of its immense scale, unique breeding program, and growing international footprint. 10 stocks we like better than Aurora Cannabis When our award-winning analyst team has a stock tip, it can pay to listen. |
36429.0 | 2023-01-25 00:00:00 UTC | Why Aurora Cannabis Stock Is Fading Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-stock-is-fading-today | nan | nan | What happened
Shares of Canadian pot giant Aurora Cannabis (NASDAQ: ACB) are under pressure Wednesday morning. Specifically, the pot company's stock was down by a noteworthy 5.4% on elevated volume as of 10:45 a.m. ET Wednesday.
What's causing investors to move to the sidelines today? Most U.S. equities are falling today in response to weaker-than-expected earnings from high-profile companies like Abbott Laboratories, Microsoft, and Intuitive Surgical. The bottom line is that the Federal Reserve's aggressive interest-rate-hike strategy, along with stubbornly high levels of inflation, appear to be having a chilling effect on consumer demand for goods and services.
So what
What's the spillover for global cannabis companies like Aurora? While a fair number of cannabis users do view the plant as an essential medicine, these economic headwinds are having a negative impact on consumers' real buying power. That's bad news for discretionary items like recreational cannabis.
These economic headwinds could deepen a host of fundamental problems already facing companies operating in this emerging industry. Over the past year, for instance, Canadian cannabis companies have battled falling prices, declining profit margins, sizable goodwill impairment charges, a shift in consumer preferences toward higher-potency products, and legal red tape in various forms.
The net result is that nearly all of these companies lost a large chunk of their market capitalization in 2022. Aurora, for instance, shed a staggering 82% of its value last year.
Now what
All that being said, several of these beaten-down cannabis equities were leaking upward to start the year. Aurora's shares, for example, were up by a little over 9% for the year prior to today's pullback.
Can Aurora regain its northward momentum? That's a tough question to answer. Wall Street's latest fair value estimate implies that this marijuana stock could appreciate by an eye-popping 500% from current levels. That kind of notable upside potential might draw in risk-tolerant investors over the balance of the year.
Then again, Aurora is operating in an industry characterized by fierce competition, an unfavorable regulatory environment, high tax burdens, and a vast oversupply of product. So if a global economic slowdown does indeed dampen demand for recreational cannabis, Aurora's stock may have trouble living up to Wall Street's lofty expectations.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories, Intuitive Surgical, and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Shares of Canadian pot giant Aurora Cannabis (NASDAQ: ACB) are under pressure Wednesday morning. The bottom line is that the Federal Reserve's aggressive interest-rate-hike strategy, along with stubbornly high levels of inflation, appear to be having a chilling effect on consumer demand for goods and services. While a fair number of cannabis users do view the plant as an essential medicine, these economic headwinds are having a negative impact on consumers' real buying power. | What happened Shares of Canadian pot giant Aurora Cannabis (NASDAQ: ACB) are under pressure Wednesday morning. Most U.S. equities are falling today in response to weaker-than-expected earnings from high-profile companies like Abbott Laboratories, Microsoft, and Intuitive Surgical. The Motley Fool has positions in and recommends Abbott Laboratories, Intuitive Surgical, and Microsoft. | What happened Shares of Canadian pot giant Aurora Cannabis (NASDAQ: ACB) are under pressure Wednesday morning. Over the past year, for instance, Canadian cannabis companies have battled falling prices, declining profit margins, sizable goodwill impairment charges, a shift in consumer preferences toward higher-potency products, and legal red tape in various forms. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | What happened Shares of Canadian pot giant Aurora Cannabis (NASDAQ: ACB) are under pressure Wednesday morning. So if a global economic slowdown does indeed dampen demand for recreational cannabis, Aurora's stock may have trouble living up to Wall Street's lofty expectations. Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks. |
36430.0 | 2023-01-19 00:00:00 UTC | 3 Pot Stocks to Avoid Like the Plague in 2023 | ACB | https://www.nasdaq.com/articles/3-pot-stocks-to-avoid-like-the-plague-in-2023 | nan | nan | Over a two-year span, investors have watched marijuana stocks go from the buzz of Wall Street to nothing short of a buzzkill. When Democrats took control of both houses of Congress in 2021 and President Joe Biden ascended to the Oval Office, it was believed that cannabis reform was likely. Two years later, marijuana remains illegal at the federal level and cannabis banking reform measures continue to stall in the Senate.
But this lack of progress at the federal level hasn't dimmed the long-term hope for the industry. According to BDSA, worldwide cannabis sales are expected to nearly double from $30 billion in 2021 to $57 billion by 2026. That makes cannabis one of the fastest-growing industries on the planet.
Image source: Getty Images.
Unfortunately, not every company associated with next-big-thing investments turns out to be a winner. What follows are three pot stocks investors would be wise to avoid like the plague in 2023.
Aurora Cannabis
The first marijuana stock that has no business being in investors' portfolios in the new year is Canadian licensed producer Aurora Cannabis (NASDAQ: ACB).
It's almost hard to believe that just four years ago Aurora Cannabis was talked about as potentially becoming an international weed juggernaut, with peak production capacity (assuming all 15 of its properties were built out) of more than 600,000 kilograms of dried flower per year. Of course, with hindsight being what it is, investors now know that Aurora Cannabis grossly overestimated domestic and export demand.
Some of Aurora's growing pains aren't its own doing. Canada's most populated province, Ontario, was working with an inefficient lottery system to assign retail dispensary licenses for years. Post-legalization issues like this, coupled with Canadian consumers gravitating toward lower-margin dried flower, has been a bad combination for the once highflying Aurora Cannabis.
But make no mistake: Aurora had plenty of miscues of its own. The company grossly overpaid for about a dozen acquisitions, which eventually led to billions of dollars in goodwill write downs. Further, it's been unable to reduce its expenses anywhere near enough to move the company to profitability. Though Aurora claims to be on track for positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), this isn't the same as becoming profitable or generating positive cash flow. With little traction in Canada's adult-use cannabis market, Aurora looks to be years away from any chance at recurring profitability.
But the glaring problem with Aurora Cannabis is that it's become a serial diluter. A number of poor strategic decisions crushed the company's balance sheet. As a result, it's been issuing stock and convertible debt to fund its operations for years. In a little over eight years, Aurora's outstanding share count has ballooned from a reverse split-adjusted 1.3 million to about 300 million. Shareholders have no chance to thrive when a company is burning cash and burying them under newly-issued shares.
With Aurora Cannabis once again at risk of needing a reverse split to avoid delisting from the Nasdaq exchange, it has all the hallmarks of a pot stock to avoid in 2023.
SNDL
The second pot stock that investors would be wise to avoid like the plague in 2023 is SNDL (NASDAQ: SNDL), the company that was known as Sundial Growers until this past July.
SNDL, like Aurora, is a Canadian cannabis company that had visions of grandeur following the legalization of recreational weed in October 2018. Following its debut as a publicly traded company in 2019, SNDL quickly ramped up its wholesale cannabis operations. Though wholesale cannabis produces lower margins than traditional retail operations, SNDL's sales were growing. Then everything changed.
In 2020, the company's management team made the decision to shift its focus away from wholesale cannabis to the higher-margin retail side of the equation. This meant starting from scratch and effectively building from the ground up. Years later, SNDL's cannabis operations are still menial. On an annual run-rate basis (based on third-quarter sales), SNDL is pacing just 66 million Canadian dollars ($49.3 million U.S.) in cannabis sales.
The bigger problem for SNDL is that its management team undertook a campaign to completely pay off the company's outstanding debt in 2020. While paying off debt would generally be a positive, SNDL's execs opened the spigot and began issuing stock to raise capital. That spigot wasn't turned off for more than a year. Instead of simply wiping out the company's debt, SNDL transformed itself into something similar to a special purpose acquisition company (SPAC). In a span of two years, SNDL's reverse split-adjusted share count catapulted from just shy of 51 million shares to 236 million. Like Aurora Cannabis, SNDL drowned its shareholders in dilution.
Although SNDL has used its capital to acquire a number of other businesses, including Alcanna, which made it Canada's largest private sector liquor retailer, the money that management raised on the backs of its shareholders had no immediate purpose. In other words, management raised capital aimlessly without a plan. Now, almost comically, it's undertaken a token share repurchase program after diluting its investors into smithereens.
Whether SNDL can make all of the puzzle pieces it's acquired fit together into a profitable picture remains to be seen. What is clear is that management has done a terrible job for its shareholders, which is why SNDL is an easy stock to avoid in 2023.
Image source: Getty Images.
Canopy Growth
The third and final pot stock to avoid like the plague in 2023 is Canopy Growth (NASDAQ: CGC). You'll note all three marijuana stocks to avoid are, indeed, Canadian licensed producers.
Canopy Growth and Aurora Cannabis were essentially neck-and-neck in 2019 and seemingly poised to dominate the Canadian adult-use landscape and international medical marijuana exports. But as noted, things didn't go as planned. Since then, Canopy Growth has divested assets and scrambled to reduce its expenses. While it's made headway reducing its once unsightly share-based compensation, the company's selling, general, and administrative expenses are keeping Canopy firmly in the red.
But it's not just expenses that are holding Canopy Growth down. The company made a number of acquisitions that it ultimately overpaid for, resulting in CA$1.77 billion ($1.32 billion U.S.) in write downs and impairment charges through the first six months of fiscal 2023.
Canopy Growth's cash situation isn't what it once was, either. At one point, following a multibillion-dollar equity investment from spirits giant Constellation Brands, Canopy had in excess of $4 billion in its war chest. As of the end of September 2022, the company's combined cash, cash equivalents, and short-term investments position had dwindled to $855 million. This means the company has a net debt position after it was absolutely swimming in billions of dollars of cash just four years ago. With net losses continuing, I'd expect this once-robust cash position to further shrink.
Lastly, Canopy Growth, Aurora Cannabis, and SNDL have no organic opportunity to enter the U.S. market in 2023 -- or 2024, for that matter. Despite calls for cannabis reform among the public, Republican lawmakers in Congress are generally not in favor of legalization. President Biden is also opposed to nationwide cannabis legalization. Although Canopy has a strategic plan to enter the U.S. via acquisitions and divest some of its Canadian retail operations, the logistics of such a move could take a long time to play out.
In short, Canopy Growth is stuck with Canada's underperforming, hypercompetitive, low-margin-driven adult-use cannabis industry.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Brands. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis The first marijuana stock that has no business being in investors' portfolios in the new year is Canadian licensed producer Aurora Cannabis (NASDAQ: ACB). Although SNDL has used its capital to acquire a number of other businesses, including Alcanna, which made it Canada's largest private sector liquor retailer, the money that management raised on the backs of its shareholders had no immediate purpose. Canopy Growth and Aurora Cannabis were essentially neck-and-neck in 2019 and seemingly poised to dominate the Canadian adult-use landscape and international medical marijuana exports. | Aurora Cannabis The first marijuana stock that has no business being in investors' portfolios in the new year is Canadian licensed producer Aurora Cannabis (NASDAQ: ACB). On an annual run-rate basis (based on third-quarter sales), SNDL is pacing just 66 million Canadian dollars ($49.3 million U.S.) in cannabis sales. In a span of two years, SNDL's reverse split-adjusted share count catapulted from just shy of 51 million shares to 236 million. | Aurora Cannabis The first marijuana stock that has no business being in investors' portfolios in the new year is Canadian licensed producer Aurora Cannabis (NASDAQ: ACB). The second pot stock that investors would be wise to avoid like the plague in 2023 is SNDL (NASDAQ: SNDL), the company that was known as Sundial Growers until this past July. SNDL, like Aurora, is a Canadian cannabis company that had visions of grandeur following the legalization of recreational weed in October 2018. | Aurora Cannabis The first marijuana stock that has no business being in investors' portfolios in the new year is Canadian licensed producer Aurora Cannabis (NASDAQ: ACB). You'll note all three marijuana stocks to avoid are, indeed, Canadian licensed producers. This means the company has a net debt position after it was absolutely swimming in billions of dollars of cash just four years ago. |
36431.0 | 2023-01-16 00:00:00 UTC | Better Growth Stock: Aurora Cannabis vs. Trulieve Cannabis | ACB | https://www.nasdaq.com/articles/better-growth-stock%3A-aurora-cannabis-vs.-trulieve-cannabis | nan | nan | With a slew of states and countries legalizing marijuana in the last few years, the cannabis sector is expanding rapidly, and that means there are plenty of opportunities for investors to find the growth stocks that will lead the industry tomorrow. But many marijuana operators are fighting to retain their market share, and only a few are positioned for success.
On that note, Aurora Cannabis (NASDAQ: ACB) and Trulieve Cannabis (OTC: TCNNF) are both unprofitable marijuana companies that are facing stiff downward pressure on their top lines. Which is a better option as a growth investment?
Aurora has a long way to go before stabilizing
Investing in Aurora right now means believing that the company will eventually succeed in its ongoing multiyear turnaround plan to scale down its business and become profitable in the process.
That's not exactly a strong investment thesis for a growth stock, but in Aurora's case, there are a few signs that point to such a thesis being credible, and if it can survive in the near term, it could later experience robust growth.
In the last three years, its quarterly revenue fell by 31.2%, reaching just over $37.7 million. But it retained its position as Canada's biggest medical marijuana business. On Jan. 4, it closed the sale of one of its cultivation facilities, thereby trimming its overhead while also curtailing its production capacity even further.
Believe it or not, that supports the company's long-term health. Cutting unprofitable facilities is a big part of why its total expenses fell slightly as a percentage of quarterly revenue in the last three years, bringing it closer to profitability in the process.
For the moment, Wall Street analysts expect it to make $150.7 million in sales for 2023, which is less than its trailing-12-month total revenue of $164.8 million. If it can continue cutting costs long enough to break even, it might eventually be able to leverage its favorable positioning in lucrative international medical-marijuana markets like Germany and the U.K., where it's already operating.
That's likely part of the reason analysts expect it to bring in revenue of $207.3 million in 2024 as it returns to growth. Cannabis legalization in its markets would also give investors exposure to some additional upside, as the company could eventually get around to expanding its footprint once it rightsizes its Canadian operations.
Trulieve's scale-up is in full swing
Trulieve Cannabis is a better growth stock than Aurora because it plans to keep growing aggressively while consolidating its position within its markets, instead of trying to scale down to burn less money. But the investing thesis in its favor isn't as cut and dried as it might seem at first glance.
It primarily competes in U.S. cannabis markets, where it sells both medical and recreational products, depending on the state. Since three years ago, its quarterly revenue has popped by 213.1%, reaching nearly $300.8 million, and it was even profitable for a handful of quarters consecutively in that period.
In the third quarter, it opened 11 new dispensaries across the U.S., suggesting that management is comfortable with both the level of demand in the market as well as its ability to return to profitability in the near term.
In particular, Trulieve's 123-store presence in Florida makes it appealing, since there aren't any competitors that have as large a retail footprint in the state. Cornering a market where the number of marijuana cultivation and sale licenses is limited means creating a semi-monopoly that could deliver returns to shareholders for years to come.
But Trulieve's revenue growth appears to have hit a plateau in the third quarter, the third period in a row when its sales failed to post strong quarter-over-quarter growth. That means declining year-over-year sales could be on the docket for its earnings report (expected for late March or early April), which might damage its share prices sharply. You may be wondering how management can expect growth and new-store openings while its existing stores are clearly seeing demand slacken.
The answer is that it might well be making the same mistakes with overbuilding capacity that Aurora Cannabis did in the Canadian market just a few years prior. If that's the case -- and falling marijuana prices in the U.S. in 2022 support the idea that it is -- Trulieve investors could soon be in for a rude awakening when the company's extensive cultivation facilities and large retail footprint are suddenly big money-burners.
What's the best move?
Even if Trulieve is about to hit the same major headwinds that Aurora hit a while ago, it could still grow faster. Its problems with a lack of profitability are relatively new, and they aren't as severe as Aurora's.
Plus, the U.S. cannabis market is far larger than the Canadian market, so Trulieve won't need to expand internationally to keep adding to its top line. Trulieve can just continue to develop its regional hubs in the Southeast and the Northeast, both of which are likely to be energized by a new wave or marijuana legalization that's nowhere to be found in Canada.
Nonetheless, you should understand that both of these growth stocks are quite risky at the moment. If you can't accept the chance that Trulieve's next year or so is going to be a bumpy ride for shareholders, it's better to steer clear, even if it'll be a better bet than Aurora Cannabis.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Trulieve Cannabis. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | On that note, Aurora Cannabis (NASDAQ: ACB) and Trulieve Cannabis (OTC: TCNNF) are both unprofitable marijuana companies that are facing stiff downward pressure on their top lines. With a slew of states and countries legalizing marijuana in the last few years, the cannabis sector is expanding rapidly, and that means there are plenty of opportunities for investors to find the growth stocks that will lead the industry tomorrow. Cutting unprofitable facilities is a big part of why its total expenses fell slightly as a percentage of quarterly revenue in the last three years, bringing it closer to profitability in the process. | On that note, Aurora Cannabis (NASDAQ: ACB) and Trulieve Cannabis (OTC: TCNNF) are both unprofitable marijuana companies that are facing stiff downward pressure on their top lines. That's not exactly a strong investment thesis for a growth stock, but in Aurora's case, there are a few signs that point to such a thesis being credible, and if it can survive in the near term, it could later experience robust growth. But it retained its position as Canada's biggest medical marijuana business. | On that note, Aurora Cannabis (NASDAQ: ACB) and Trulieve Cannabis (OTC: TCNNF) are both unprofitable marijuana companies that are facing stiff downward pressure on their top lines. With a slew of states and countries legalizing marijuana in the last few years, the cannabis sector is expanding rapidly, and that means there are plenty of opportunities for investors to find the growth stocks that will lead the industry tomorrow. Trulieve's scale-up is in full swing Trulieve Cannabis is a better growth stock than Aurora because it plans to keep growing aggressively while consolidating its position within its markets, instead of trying to scale down to burn less money. | On that note, Aurora Cannabis (NASDAQ: ACB) and Trulieve Cannabis (OTC: TCNNF) are both unprofitable marijuana companies that are facing stiff downward pressure on their top lines. Cannabis legalization in its markets would also give investors exposure to some additional upside, as the company could eventually get around to expanding its footprint once it rightsizes its Canadian operations. If that's the case -- and falling marijuana prices in the U.S. in 2022 support the idea that it is -- Trulieve investors could soon be in for a rude awakening when the company's extensive cultivation facilities and large retail footprint are suddenly big money-burners. |
36432.0 | 2023-01-13 00:00:00 UTC | Are Medical Stocks Lagging Aurora Cannabis (ACB) This Year? | ACB | https://www.nasdaq.com/articles/are-medical-stocks-lagging-aurora-cannabis-acb-this-year | nan | nan | Investors interested in Medical stocks should always be looking to find the best-performing companies in the group. Is Aurora Cannabis Inc. (ACB) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Medical peers, we might be able to answer that question.
Aurora Cannabis Inc. is a member of our Medical group, which includes 1181 different companies and currently sits at #8 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Aurora Cannabis Inc. is currently sporting a Zacks Rank of #2 (Buy).
Within the past quarter, the Zacks Consensus Estimate for ACB's full-year earnings has moved 9% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Based on the latest available data, ACB has gained about 3.7% so far this year. Meanwhile, stocks in the Medical group have lost about 16.2% on average. This means that Aurora Cannabis Inc. is outperforming the sector as a whole this year.
One other Medical stock that has outperformed the sector so far this year is Lantheus Holdings (LNTH). The stock is up 0.7% year-to-date.
For Lantheus Holdings, the consensus EPS estimate for the current year has increased 3.2% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Looking more specifically, Aurora Cannabis Inc. belongs to the Medical - Products industry, which includes 104 individual stocks and currently sits at #143 in the Zacks Industry Rank. On average, stocks in this group have lost 41.1% this year, meaning that ACB is performing better in terms of year-to-date returns. Lantheus Holdings is also part of the same industry.
Investors interested in the Medical sector may want to keep a close eye on Aurora Cannabis Inc. and Lantheus Holdings as they attempt to continue their solid performance.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Is Aurora Cannabis Inc. (ACB) one of those stocks right now? Within the past quarter, the Zacks Consensus Estimate for ACB's full-year earnings has moved 9% higher. Based on the latest available data, ACB has gained about 3.7% so far this year. | On average, stocks in this group have lost 41.1% this year, meaning that ACB is performing better in terms of year-to-date returns. Click to get this free report Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report Lantheus Holdings, Inc. (LNTH) : Free Stock Analysis Report To read this article on Zacks.com click here. Is Aurora Cannabis Inc. (ACB) one of those stocks right now? | Click to get this free report Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report Lantheus Holdings, Inc. (LNTH) : Free Stock Analysis Report To read this article on Zacks.com click here. Is Aurora Cannabis Inc. (ACB) one of those stocks right now? Within the past quarter, the Zacks Consensus Estimate for ACB's full-year earnings has moved 9% higher. | On average, stocks in this group have lost 41.1% this year, meaning that ACB is performing better in terms of year-to-date returns. Is Aurora Cannabis Inc. (ACB) one of those stocks right now? Within the past quarter, the Zacks Consensus Estimate for ACB's full-year earnings has moved 9% higher. |
36433.0 | 2023-01-11 00:00:00 UTC | Why Aurora Cannabis and Other Marijuana Stocks Just Popped | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-and-other-marijuana-stocks-just-popped | nan | nan | What happened
Investors in marijuana stocks such as Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and Curaleaf (OTC: CURLF) are having a good day today -- their first after four days of nonstop selling for some of these stocks. Through 12:12 p.m. ET on Wednesday, shares of Curaleaf are gaining 1.3%, and Aurora Cannabis is up 2.6%, while Tilray stock is leading the whole sector higher with a big 6% gain.
The growing popularity of medical marijuana apparently is behind it all.
So what
The effort to legalize marijuana at the national level ran into some roadblocks in 2022, and the drug is fully legal today in only 24 states and territories, according to the latest data from marijuana legalization advocate NORML. At the same time, however, 42 states and territories allow medical marijuana.
The precise date for full-scale legalization at the federal level remains uncertain, but it does seem inevitable given its widespread support. And in the meantime, pot investors got some good news yesterday on the medical marijuana front.
It came in a study published by the Journal of the American Medical Association (JAMA) of 1,724 adults 18 and older in 36 states and the District of Columbia in early 2022. The study showed that 3 out of 10 patients suffering from chronic pain have switched (either entirely or in part) from opioids to marijuana. The study also found that more than half of such patients have begun substituting medical marijuana for either opioids or nonprescription painkillers.
Now what
Related studies indicate that medical marijuana's availability is also leading to a significant decrease in the issuance of opioid painkiller prescriptions among cancer patients. And according to a report yesterday from marijuana news source Marijuana Moment, other studies show declines totaling billions of dollars in opioid sales for drugmakers in states with legal medical marijuana.
So medical marijuana appears to be stealing market share from big pharma. But what's bad news for pharmaceutical stocks isn't necessarily great news -- yet -- for marijuana stocks.
Neither Aurora Cannabis, Tilray, nor Curaleaf have earned any profit in the past five years, and none of them has ever generated any positive free cash flow. But hope springs eternal.
According to analysts polled by S&P Global Market Intelligence, 2023 could be the first year Curaleaf generates at least a pro forma profit ($0.06 per share, say the analysts), and Aurora Cannabis could potentially turn in an actual profit in 2025, as calculated according to generally accepted accounting principles (GAAP).
The way things are going, say the analysts, Tilray could be both pro forma profitable and generate a GAAP profit in 2026, even absent federal legalization.
Despite racking up big losses over the past year, investors still seem to be optimistic that if they wait long enough, these investments will pay off eventually. The question is: How many investors have the patience to keep enduring losses while they wait for that day to arrive?
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Investors in marijuana stocks such as Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and Curaleaf (OTC: CURLF) are having a good day today -- their first after four days of nonstop selling for some of these stocks. It came in a study published by the Journal of the American Medical Association (JAMA) of 1,724 adults 18 and older in 36 states and the District of Columbia in early 2022. Now what Related studies indicate that medical marijuana's availability is also leading to a significant decrease in the issuance of opioid painkiller prescriptions among cancer patients. | What happened Investors in marijuana stocks such as Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and Curaleaf (OTC: CURLF) are having a good day today -- their first after four days of nonstop selling for some of these stocks. According to analysts polled by S&P Global Market Intelligence, 2023 could be the first year Curaleaf generates at least a pro forma profit ($0.06 per share, say the analysts), and Aurora Cannabis could potentially turn in an actual profit in 2025, as calculated according to generally accepted accounting principles (GAAP). The way things are going, say the analysts, Tilray could be both pro forma profitable and generate a GAAP profit in 2026, even absent federal legalization. | What happened Investors in marijuana stocks such as Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and Curaleaf (OTC: CURLF) are having a good day today -- their first after four days of nonstop selling for some of these stocks. And according to a report yesterday from marijuana news source Marijuana Moment, other studies show declines totaling billions of dollars in opioid sales for drugmakers in states with legal medical marijuana. But what's bad news for pharmaceutical stocks isn't necessarily great news -- yet -- for marijuana stocks. | What happened Investors in marijuana stocks such as Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and Curaleaf (OTC: CURLF) are having a good day today -- their first after four days of nonstop selling for some of these stocks. At the same time, however, 42 states and territories allow medical marijuana. And according to a report yesterday from marijuana news source Marijuana Moment, other studies show declines totaling billions of dollars in opioid sales for drugmakers in states with legal medical marijuana. |
36434.0 | 2023-01-11 00:00:00 UTC | Why Canadian Cannabis Company Canopy Growth Has Its Eyes on the U.S. | ACB | https://www.nasdaq.com/articles/why-canadian-cannabis-company-canopy-growth-has-its-eyes-on-the-u.s. | nan | nan | Cannabis companies had a rough time in the U.S. in 2022, but some of the ones based in Canada are facing an even harder time thanks to a glut in cannabis supply north of the border, which is cutting into margins.
Aurora Cannabis, with its headquarters in Edmonton, saw its shares drop more than 83% over the past year. Tilray Brands, based in Leamington, Ontario, has seen its shares drop over 54%, while Canopy Growth (NASDAQ: CGC), headquartered in Smith Falls, Ontario, had a 70% drop in share price over the past year. Not coincidentally, all three cannabis companies saw revenue decline, year over year, in their most recent quarter.
Canopy's turnaround play
Canopy's sales in the second quarter of fiscal 2023 were reported as 118 million Canadian dollars, down 10% year over year. The company cited increased competition in the adult-use cannabis market in Canada as a primary reason for the year-over-year decline. Canopy also reported a net loss in the quarter of CA$232 million, compared to only a CA$16 million loss in the same period a year ago.
Since the report, Canopy announced on Jan. 3 that it was divesting its Canadian retail locations, including stores operating under the Tweed and Tokyo Smoke banners, selling the locations to OEG Retail Cannabis and 420 Investments Ltd. While it is shutting stores, Canopy will still operate the Tweed brand and sell flower, pre-rolled, infused gummies, and cannabis beverages to Canadian consumers.
Looking long-term, Canopy sees more potential south of the Canadian border. It's simple math, really. Canada is the largest nation in the Western Hemisphere in terms of area, but it only has roughly 38.6 million people, fewer than the 40 million people who live in California, not to mention the 334 million who are estimated to live in the U.S. Canopy said it sees the U.S. as a potential $50 billion annual market for cannabis.
Jockeying for position
Last year, five states approved some type of cannabis sales -- recreational or medicinal, led by New Jersey, meaning that there are only 14 states remaining where the drug is still completely illegal.
Cannabis is still illegal at the federal level in the U.S., and multi-state operators face a mishmash of laws and regulations to bring their products to market. Canadian companies aren't allowed to sell in the United States, but if federal laws change to allow the transfer of cannabis across state lines (and from Canada to the U.S.), Canadian cannabis companies still won't be playing on their home turf. In many ways, the regulations will be tilted against them.
However, Canopy is making moves to be ready to sell in the U.S. market, though it won't be under the name Canopy, but Canopy USA instead. In October, the company announced its plan to form a new holding company under that name to handle the company's business interests south of the border, enabling it to acquire cannabis company Acreage, edibles company Wana, and cannabis extract maker Jetty.
A special meeting is expected this month, where shareholders will be given the opportunity to vote on the company's consolidation of its U.S. cannabis assets.
Acreage gives Canopy access to 23 dispensaries across nine states in the U.S. Wana, headquartered in Boulder, Colorado, is North America's largest cannabis-infused edibles producer, with operations in 15 states and Canada. Jetty's high-quality cannabis extracts and clean vape technology are available only in California for now. But the move by Canopy will allow the Oakland-based company to expand to other states, as well as give Canopy another foothold in the state with the most cannabis sales.
On top of that, earlier this month, Canopy increased its ownership stake in U.S. cannabis company TerrAscend (OTC: TRSSF) from 12% to 18.2%, with the option to own as much as 24.3% of the company, which has vertical cannabis operations in Pennsylvania, New Jersey, Michigan, and California, plus cultivation and licensing operations in Maryland as well as licensed production in Canada.
David Klein, Canopy's CEO, said the moves would allow the company to have a crucial fast start in the U.S. once it is allowed to operate here. It also expects to see certain revenue and cost synergies by consolidating its U.S. cannabis assets. All told, Canopy USA would have a presence in 21 states. The whole process could take until the end of 2024, Canopy said. It may seem like a gamble, but given how sales are trending in Canada, it appears to be a risk the company feels it needs to take.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Jim Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | While it is shutting stores, Canopy will still operate the Tweed brand and sell flower, pre-rolled, infused gummies, and cannabis beverages to Canadian consumers. Cannabis is still illegal at the federal level in the U.S., and multi-state operators face a mishmash of laws and regulations to bring their products to market. Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks. | Tilray Brands, based in Leamington, Ontario, has seen its shares drop over 54%, while Canopy Growth (NASDAQ: CGC), headquartered in Smith Falls, Ontario, had a 70% drop in share price over the past year. Canadian companies aren't allowed to sell in the United States, but if federal laws change to allow the transfer of cannabis across state lines (and from Canada to the U.S.), Canadian cannabis companies still won't be playing on their home turf. In October, the company announced its plan to form a new holding company under that name to handle the company's business interests south of the border, enabling it to acquire cannabis company Acreage, edibles company Wana, and cannabis extract maker Jetty. | Canadian companies aren't allowed to sell in the United States, but if federal laws change to allow the transfer of cannabis across state lines (and from Canada to the U.S.), Canadian cannabis companies still won't be playing on their home turf. In October, the company announced its plan to form a new holding company under that name to handle the company's business interests south of the border, enabling it to acquire cannabis company Acreage, edibles company Wana, and cannabis extract maker Jetty. On top of that, earlier this month, Canopy increased its ownership stake in U.S. cannabis company TerrAscend (OTC: TRSSF) from 12% to 18.2%, with the option to own as much as 24.3% of the company, which has vertical cannabis operations in Pennsylvania, New Jersey, Michigan, and California, plus cultivation and licensing operations in Maryland as well as licensed production in Canada. | Not coincidentally, all three cannabis companies saw revenue decline, year over year, in their most recent quarter. Cannabis is still illegal at the federal level in the U.S., and multi-state operators face a mishmash of laws and regulations to bring their products to market. But the move by Canopy will allow the Oakland-based company to expand to other states, as well as give Canopy another foothold in the state with the most cannabis sales. |
36435.0 | 2023-01-03 00:00:00 UTC | Why Marijuana Stocks Were Thrashed on Tuesday | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-were-thrashed-on-tuesday | nan | nan | What happened
American pot stocks just couldn't catch fire on Tuesday. Investors weren't heartened at all by the incoming Congress, which will feature a new majority-Republican House of Representatives.
Curaleaf Holdings (OTC: CURLF) led the downward charge by shedding more than 7% of its share price on the day, and Green Thumb Industries (OTC: GTBIF) fell by nearly 4%. Some Canadian peers also caught this cold, with Aurora Cannabis (NASDAQ: ACB), for example, slipping by 1%.
So what
Although the ascendant Republicans struggled to elect a Speaker from their party on Tuesday, barring any oddball development they'll eventually sort this out to control the House. Unhappily for the marijuana industry, it's Republican lawmakers who have been the most resistant to drug law reform.
This means the drug's decriminalization (read: legalization) at the federal level is likely dead in the water for the duration of this Congress. We can assume the same for the SAFE Banking Act, basically a legalization-adjacent measure that would allow marijuana companies to access the basic financial services all businesses require to function effectively.
Legalization can only be effected at the federal level by removing weed's status as a schedule 1 drug under the Controlled Substances Act. While individual states can and have sanctioned recreational consumption and sale, these one-by-one changes in the law have left only a confusing patchwork of legality across the country.
Now what
Make no mistake, Curaleaf and Green Thumb are plenty busy slinging product to people in those locations. But the big prize is federal decriminalization, and it's clear that won't be happening soon with the incoming crowd in the House of Representatives.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Green Thumb Industries. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Some Canadian peers also caught this cold, with Aurora Cannabis (NASDAQ: ACB), for example, slipping by 1%. So what Although the ascendant Republicans struggled to elect a Speaker from their party on Tuesday, barring any oddball development they'll eventually sort this out to control the House. While individual states can and have sanctioned recreational consumption and sale, these one-by-one changes in the law have left only a confusing patchwork of legality across the country. | Some Canadian peers also caught this cold, with Aurora Cannabis (NASDAQ: ACB), for example, slipping by 1%. Curaleaf Holdings (OTC: CURLF) led the downward charge by shedding more than 7% of its share price on the day, and Green Thumb Industries (OTC: GTBIF) fell by nearly 4%. Now what Make no mistake, Curaleaf and Green Thumb are plenty busy slinging product to people in those locations. | Some Canadian peers also caught this cold, with Aurora Cannabis (NASDAQ: ACB), for example, slipping by 1%. We can assume the same for the SAFE Banking Act, basically a legalization-adjacent measure that would allow marijuana companies to access the basic financial services all businesses require to function effectively. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | Some Canadian peers also caught this cold, with Aurora Cannabis (NASDAQ: ACB), for example, slipping by 1%. But the big prize is federal decriminalization, and it's clear that won't be happening soon with the incoming crowd in the House of Representatives. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. |
36436.0 | 2022-12-29 00:00:00 UTC | Why Marijuana Stocks Like SNDL and Curaleaf Shot Higher Today | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-like-sndl-and-curaleaf-shot-higher-today | nan | nan | What happened
There was a distinct whiff of marijuana floating above the stock exchange on Thursday as a clutch of pot stocks rose notably in price. This was an anticipatory reaction to the launch of an important new market.
Green Thumb Industries (OTC: GTBIF) rocketed more than 12% higher, and Curaleaf (OTC: CURLF) increased by nearly 5%. Over the border, Canadian companies Aurora Cannabis (NASDAQ: ACB) advanced by almost 7%, and SNDL (NASDAQ: SNDL) closed up 3%.
So what
New York state is now open for recreational marijuana business. Appropriately enough, at 4:20 PM local time, a dispensary called Housing Works Cannabis Co. in Manhattan was to be the first retail outlet in the state to go live with such sales. This marks the launch of that all-important segment of the retail pot business in New York.
The knock-on effect for Curaleaf and Green Thumb is obvious, as both companies also have New York dispensaries -- three for the former and two for the latter's Rise brand -- that will expand from selling only medical product. Investors are clearly pleased that the pair will barrel into the new year selling recreational goods in the huge and populous state.
While neither Aurora nor SNDL will benefit directly from the opening of the New York market, it's a juicy and irresistible target for them when and if the U.S. government gets around to rescheduling (read: decriminalizing) cannabis. As foreign entities, they are currently barred from selling directly to American customers.
Now what
Like most states that have turned on the green light for recreational sales, New York is being cautious and incremental in these early days.
Although their dispensary counts seem low, Curaleaf and Green Thumb are actually prominent retailers due to the low number of total licenses. At any rate, the opening of this market is a good development for the broader weed industry, and investors were fully justified in their bullish reaction to the news.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Green Thumb Industries. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Over the border, Canadian companies Aurora Cannabis (NASDAQ: ACB) advanced by almost 7%, and SNDL (NASDAQ: SNDL) closed up 3%. Appropriately enough, at 4:20 PM local time, a dispensary called Housing Works Cannabis Co. in Manhattan was to be the first retail outlet in the state to go live with such sales. The knock-on effect for Curaleaf and Green Thumb is obvious, as both companies also have New York dispensaries -- three for the former and two for the latter's Rise brand -- that will expand from selling only medical product. | Over the border, Canadian companies Aurora Cannabis (NASDAQ: ACB) advanced by almost 7%, and SNDL (NASDAQ: SNDL) closed up 3%. Green Thumb Industries (OTC: GTBIF) rocketed more than 12% higher, and Curaleaf (OTC: CURLF) increased by nearly 5%. So what New York state is now open for recreational marijuana business. | Over the border, Canadian companies Aurora Cannabis (NASDAQ: ACB) advanced by almost 7%, and SNDL (NASDAQ: SNDL) closed up 3%. The knock-on effect for Curaleaf and Green Thumb is obvious, as both companies also have New York dispensaries -- three for the former and two for the latter's Rise brand -- that will expand from selling only medical product. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | Over the border, Canadian companies Aurora Cannabis (NASDAQ: ACB) advanced by almost 7%, and SNDL (NASDAQ: SNDL) closed up 3%. So what New York state is now open for recreational marijuana business. The Motley Fool has positions in and recommends Green Thumb Industries. |
36437.0 | 2022-12-28 00:00:00 UTC | 2 Once-Hot Growth Stocks That Wall Street Thinks You Should Avoid | ACB | https://www.nasdaq.com/articles/2-once-hot-growth-stocks-that-wall-street-thinks-you-should-avoid | nan | nan | Investors on Main Street and Wall Street frequently have clashing ideas on which stocks are the most likely to be good growth investments.
Even if they aren't always right, it's usually a smart idea to at least consider what professional stock analysts are saying about a company as they typically have access to all sorts of fancy financial models that you don't. Plus, analysts often have opportunities to chat with management, not to mention other industry experts who can bring a significant amount of insight to the table.
In particular, there are a pair of cannabis businesses that many investors are looking to for growth in 2023 and beyond. But analysts are decidedly less-than-bullish on their prospects, and with good reason. Let's take a look and see if their perspective is persuasive, because it might end up saving you some money if you were seriously considering an investment.
1. Aurora Cannabis
With a catastrophic decline of 96.6% over the last three years, Aurora Cannabis (NASDAQ: ACB) is a stock that's burned countless investors. At the moment, the Canadian cannabis cultivator has an average recommendation rating from Wall Street analysts that's a hair better than hold. That means they don't think it is an attractive purchase, to say the least. There are a few reasons why the analysts might be right, starting with the dim prospects for the company's revenue growth in its 2023 and 2024 fiscal years.
On average, the analysts are expecting $146.2 million in revenue for 2023. Aurora's 2022 fiscal year brought in $174.8 million, which implies top-line growth of around 19.5%. The problem is that Aurora's quarterly revenue is actually declining; in the last year, quarterly sales dipped by more than 21.5%.
Management says that the drop was caused by a combination of employees going on strike, a cyberattack, and a decline in its low-margin product sales. But in fact the company's revenue has been trending downward over the last three years, so these latest issues appear to be tangential.
Another bearish factor is that the entire Canadian cannabis market is swamped with excess marijuana, which is driving down selling prices. The oversupply won't last forever, but for now, it makes predictions for top-line growth a bit harder to believe.
The door is still open for Aurora's profitability to rise if consumers opt for higher-margin marijuana products like edibles or distillates, though. So don't be too surprised if the company manages to meet its goal of reaching positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) before the end of the 2022 calendar year thanks to its ongoing shift to higher-margin goods and cost-saving measures.
Nonetheless, given that there are many other growth stocks that don't face the same set of headwinds in the near term, it's probably for the best to go along with analysts and avoid this stock for now. The risk of Aurora continuing to shrink is quite high, and there isn't much reason to expect relief from simultaneous top- and bottom-line pressure anytime soon.
2. Canopy Growth
Canopy Growth (NASDAQ: CGC) is another Canadian marijuana stock whose losses of 74% in 2022 have left shareholders in the lurch. Much like Aurora Cannabis, Canopy's quarterly revenue declined 19.2% compared to a year ago, and its three-year quarterly revenue growth is slightly worse than flat with a decline of near 3.7%.
Thanks to being subject to the same detrimental forces as Aurora in the Canadian market, Canopy is disfavored by analysts, who rate the stock as just barely above being a sell, on average. In its 2022 fiscal year, it brought in just over $415 million in sales, but analysts are expecting a mere $342 million for 2023. That makes sense because 2023 will be a transitional year for the company as its sell-off of its Canadian retail operations will result in a declining market share. So it won't be exposed to poor conditions in the Canadian market for much longer.
Canopy's fortunes might improve if its plans to enter the U.S. market via the formation of a new holding company and making a trio of acquisitions come to fruition. Shareholders will need to approve the plan first, which could happen sometime in 2023. There isn't any particular cause to think that the plans will falter, but there is a significant execution risk whenever a business enters a new market, and Canopy's lackluster performance in Canada doesn't provide much in the way of reassurance.
Therefore, much like Aurora Cannabis, Canopy Growth is a growth stock that investors might want to follow Wall Street's lead on and avoid buying for now, even if it's worth keeping an eye on in anticipation of a future turnaround.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Alex Carchidi is short shares of Canopy Growth. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis With a catastrophic decline of 96.6% over the last three years, Aurora Cannabis (NASDAQ: ACB) is a stock that's burned countless investors. So don't be too surprised if the company manages to meet its goal of reaching positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) before the end of the 2022 calendar year thanks to its ongoing shift to higher-margin goods and cost-saving measures. The risk of Aurora continuing to shrink is quite high, and there isn't much reason to expect relief from simultaneous top- and bottom-line pressure anytime soon. | Aurora Cannabis With a catastrophic decline of 96.6% over the last three years, Aurora Cannabis (NASDAQ: ACB) is a stock that's burned countless investors. Aurora's 2022 fiscal year brought in $174.8 million, which implies top-line growth of around 19.5%. Canopy Growth Canopy Growth (NASDAQ: CGC) is another Canadian marijuana stock whose losses of 74% in 2022 have left shareholders in the lurch. | Aurora Cannabis With a catastrophic decline of 96.6% over the last three years, Aurora Cannabis (NASDAQ: ACB) is a stock that's burned countless investors. Canopy Growth Canopy Growth (NASDAQ: CGC) is another Canadian marijuana stock whose losses of 74% in 2022 have left shareholders in the lurch. Much like Aurora Cannabis, Canopy's quarterly revenue declined 19.2% compared to a year ago, and its three-year quarterly revenue growth is slightly worse than flat with a decline of near 3.7%. | Aurora Cannabis With a catastrophic decline of 96.6% over the last three years, Aurora Cannabis (NASDAQ: ACB) is a stock that's burned countless investors. There are a few reasons why the analysts might be right, starting with the dim prospects for the company's revenue growth in its 2023 and 2024 fiscal years. On average, the analysts are expecting $146.2 million in revenue for 2023. |
36438.0 | 2022-12-27 00:00:00 UTC | Why Pot Stocks Like Tilray and Aurora Crashed Hard Today | ACB | https://www.nasdaq.com/articles/why-pot-stocks-like-tilray-and-aurora-crashed-hard-today | nan | nan | What happened
Marijuana stocks both within and north of our borders took the wrong kind of hit on Tuesday. This followed the admission from a powerful and influential marijuana reform advocate that U.S. drug laws will not see a major change anytime soon.
Few weed stocks escaped unscathed. Canadian company Tilray Brands (NASDAQ: TLRY) saw its share price slump by nearly 6%, while Aurora Cannabis (NASDAQ: ACB) fared worse with a more-than 7% decline. American multistate operator (MSO) Curaleaf (OTC: CURLF), meanwhile, fell in excess of 4% on the day.
So what
The person throwing his hands up in defeat was Senate Majority Leader Charles Schumer. In a speech on the Senate floor, Schumer promised to keep pushing forward with marijuana reform efforts in 2023. With this, he effectively admitted that a recent, last-ditch lobbying effort by himself and a clutch of other members of Congress had failed.
Just before Christmas, Schumer and 28 other federal lawmakers sent a letter to President Biden asking to reschedule the drug, a move that would de facto legalize it at one stroke. That missive was clearly ignored as no action was taken.
That wasn't the first non-success for pot reform in December. Earlier in the month, many of those same legislators attempted to fold the SAFE Banking Act -- a measure allowing marijuana companies to access basic American financial services -- into the federal government's latest spending bill. Almost needless to say, that effort also fell short.
Now what
So Tilray, Aurora, and Curaleaf shareholders will have to find the patience for the renewed shots on goal that Schumer promised for next year. The good news is that marijuana reform has wide and broad support from the U.S. public; it's only a matter of time, then, before politicians realize they can score easy points from this by flipping the legalization switch on the drug.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Canadian company Tilray Brands (NASDAQ: TLRY) saw its share price slump by nearly 6%, while Aurora Cannabis (NASDAQ: ACB) fared worse with a more-than 7% decline. Just before Christmas, Schumer and 28 other federal lawmakers sent a letter to President Biden asking to reschedule the drug, a move that would de facto legalize it at one stroke. Earlier in the month, many of those same legislators attempted to fold the SAFE Banking Act -- a measure allowing marijuana companies to access basic American financial services -- into the federal government's latest spending bill. | Canadian company Tilray Brands (NASDAQ: TLRY) saw its share price slump by nearly 6%, while Aurora Cannabis (NASDAQ: ACB) fared worse with a more-than 7% decline. In a speech on the Senate floor, Schumer promised to keep pushing forward with marijuana reform efforts in 2023. Now what So Tilray, Aurora, and Curaleaf shareholders will have to find the patience for the renewed shots on goal that Schumer promised for next year. | Canadian company Tilray Brands (NASDAQ: TLRY) saw its share price slump by nearly 6%, while Aurora Cannabis (NASDAQ: ACB) fared worse with a more-than 7% decline. In a speech on the Senate floor, Schumer promised to keep pushing forward with marijuana reform efforts in 2023. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | Canadian company Tilray Brands (NASDAQ: TLRY) saw its share price slump by nearly 6%, while Aurora Cannabis (NASDAQ: ACB) fared worse with a more-than 7% decline. In a speech on the Senate floor, Schumer promised to keep pushing forward with marijuana reform efforts in 2023. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. |
36439.0 | 2022-12-19 00:00:00 UTC | Why Marijuana Stocks Like Tilray and SNDL Tanked Today | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-like-tilray-and-sndl-tanked-today | nan | nan | What happened
It wasn't exactly a Marijuana Monday for pot sector stocks on the first trading day of this week. Many got hammered during the session, with U.S. multi-state operators Curaleaf (OTC: CURLF) and Green Thumb Industries (OTC: GTBIF) falling at double-digit rates of 17% and 12%, respectively.
Major Canadian weedies also got slammed; Tilray Brands (NASDAQ: TLRY) declined by nearly 9%, while Aurora Cannabis (NASDAQ: ACB) and SNDL (NASDAQ: SNDL) competed in the race to the bottom by tumbling a respective 9% and 10%. The culprit was yet another looming setback on the North American legalization front.
So what
On Friday, according to numerous media reports, Senate majority leader Chuck Schumer scrambled to get a major piece of marijuana reform legislation passed in the current lame-duck congress.
Those articles stated that Schumer was pushing to include the Secure and Fair Enforcement (SAFE) Banking Act in a larger omnibus funding package currently being considered by that body.
The act has been passed in the House of Representatives but has faced stiffer resistance in the Senate, which is currently split 50/50 between Democrats and Republicans. Although SAFE enjoys a degree of bipartisan support, it is opposed on various grounds by powerful senators including minority leader Mitch McConnell.
Now what
As the current Congress is rapidly approaching its expiration date, this is considered to be the last shot at squeezing some form of marijuana reform into law. Unfortunately for pot aficionados, not to mention investors in the sector, this is likely to end in failure like the previous efforts given the stiff resistance. Meanwhile, the political composition of the incoming Senate isn't much different than the present one.
Legalization -- or the lack of it -- has a major impact on not only U.S. producers and retailers like Curaleaf and Green Thumb, but also their Canadian peers such as Tilray, Aurora, and SNDL. After all, they can only benefit (and handsomely) from the opening of our wide, vast, and very populous market.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Green Thumb Industries. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Major Canadian weedies also got slammed; Tilray Brands (NASDAQ: TLRY) declined by nearly 9%, while Aurora Cannabis (NASDAQ: ACB) and SNDL (NASDAQ: SNDL) competed in the race to the bottom by tumbling a respective 9% and 10%. Those articles stated that Schumer was pushing to include the Secure and Fair Enforcement (SAFE) Banking Act in a larger omnibus funding package currently being considered by that body. Although SAFE enjoys a degree of bipartisan support, it is opposed on various grounds by powerful senators including minority leader Mitch McConnell. | Major Canadian weedies also got slammed; Tilray Brands (NASDAQ: TLRY) declined by nearly 9%, while Aurora Cannabis (NASDAQ: ACB) and SNDL (NASDAQ: SNDL) competed in the race to the bottom by tumbling a respective 9% and 10%. Many got hammered during the session, with U.S. multi-state operators Curaleaf (OTC: CURLF) and Green Thumb Industries (OTC: GTBIF) falling at double-digit rates of 17% and 12%, respectively. The Motley Fool has positions in and recommends Green Thumb Industries. | Major Canadian weedies also got slammed; Tilray Brands (NASDAQ: TLRY) declined by nearly 9%, while Aurora Cannabis (NASDAQ: ACB) and SNDL (NASDAQ: SNDL) competed in the race to the bottom by tumbling a respective 9% and 10%. So what On Friday, according to numerous media reports, Senate majority leader Chuck Schumer scrambled to get a major piece of marijuana reform legislation passed in the current lame-duck congress. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | Major Canadian weedies also got slammed; Tilray Brands (NASDAQ: TLRY) declined by nearly 9%, while Aurora Cannabis (NASDAQ: ACB) and SNDL (NASDAQ: SNDL) competed in the race to the bottom by tumbling a respective 9% and 10%. What happened It wasn't exactly a Marijuana Monday for pot sector stocks on the first trading day of this week. Legalization -- or the lack of it -- has a major impact on not only U.S. producers and retailers like Curaleaf and Green Thumb, but also their Canadian peers such as Tilray, Aurora, and SNDL. |
36440.0 | 2022-12-14 00:00:00 UTC | Will 2023 Be a Better Year for SNDL? | ACB | https://www.nasdaq.com/articles/will-2023-be-a-better-year-for-sndl | nan | nan | SNDL (NASDAQ: SNDL) wants to be a top growth stock and the company has been making moves to bolster its financials, mainly through acquisitions. However, investors have remained hesitant to buy the cannabis stock, as it has failed to perform better than others in the industry this year. Will 2023 be another challenging year for SNDL, or could this once-popular meme stock be a hot buy again?
Manufactured sales growth hasn't been impressing investors
If SNDL were to generate $1 billion in revenue next year, it would be an impressive feat for the business. But at the same time, investors would know that if that happens, it means the company has been even more aggressive in pursuing mergers and acquisitions.
That's because SNDL hasn't been generating anything notable in the way of organic growth this year. Instead, it has turned to acquisitions to bolster its top line. The most significant deal it has closed on in the past couple of years is its purchase of alcohol retailer Alcanna back in March. Liquor retail now makes up the majority of SNDL's business, with sales last quarter (period ending Sept. 30) totaling 230.5 million Canadian dollars, with the new segment representing two-thirds of that figure.
But as the stock's returns this year show (SNDL is down 57%), this manufactured sales growth simply hasn't been all that convincing. Mergers and acquisitions are nothing new to cannabis investors, and that strategy isn't going to be enough to make a stock a good buy. If SNDL's stock is going to rally in 2023, it needs to offer investors much more than just sales growth.
Profitability and cash are likely the burning issues for investors
A big concern I have with SNDL's business is that it is highly dilutive and the company issues many warrants, so much so that a change in the value of its warrants oftentimes has a significant impact on its financial statements. Last quarter, a change in the estimate for the fair value of its derivative warrants resulted in an expense totaling CA$8.5 million. A year earlier, it was a gain of CA$24.1 million.
In order for SNDL to win over investors, it will need to show that its growth is sustainable and that the business is bringing in positive cash flow to avoid having to rely on warrants and issuing shares in the future. In the trailing 12 months, the company's cash burn from operations has totaled CA$29.9 million and its net losses were CA$269.7 million.
While the company believes it can generate free cash flow, investors are better off seeing that before believing it, as management admits that its "transformation is far from complete."
Will SNDL stock do better next year?
It can be tempting to think after falling more than 50% that there's no way SNDL could do worse in 2023. But SNDL investors need to only look as far as rival Aurora Cannabis, which now has a lower market cap than SNDL, as proof that things can always get worse, especially in the volatile and unpredictable cannabis industry.
The risk for investors is that SNDL may continue to be aggressive with acquiring other businesses because that could lead to more share issues and dilution. While I would be surprised if SNDL falls another 50-plus percent next year, I certainly wouldn't rule out the possibility. But even if 2023 is a better year for the stock, that doesn't mean it'll be a good buy as SNDL's tailspin may be far from over.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Liquor retail now makes up the majority of SNDL's business, with sales last quarter (period ending Sept. 30) totaling 230.5 million Canadian dollars, with the new segment representing two-thirds of that figure. In order for SNDL to win over investors, it will need to show that its growth is sustainable and that the business is bringing in positive cash flow to avoid having to rely on warrants and issuing shares in the future. Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks. | Manufactured sales growth hasn't been impressing investors If SNDL were to generate $1 billion in revenue next year, it would be an impressive feat for the business. Liquor retail now makes up the majority of SNDL's business, with sales last quarter (period ending Sept. 30) totaling 230.5 million Canadian dollars, with the new segment representing two-thirds of that figure. But as the stock's returns this year show (SNDL is down 57%), this manufactured sales growth simply hasn't been all that convincing. | SNDL (NASDAQ: SNDL) wants to be a top growth stock and the company has been making moves to bolster its financials, mainly through acquisitions. Manufactured sales growth hasn't been impressing investors If SNDL were to generate $1 billion in revenue next year, it would be an impressive feat for the business. But as the stock's returns this year show (SNDL is down 57%), this manufactured sales growth simply hasn't been all that convincing. | SNDL (NASDAQ: SNDL) wants to be a top growth stock and the company has been making moves to bolster its financials, mainly through acquisitions. Mergers and acquisitions are nothing new to cannabis investors, and that strategy isn't going to be enough to make a stock a good buy. Will SNDL stock do better next year? |
36441.0 | 2022-12-13 00:00:00 UTC | Should You Be Buying SNDL Stock While It's Dirt Cheap? | ACB | https://www.nasdaq.com/articles/should-you-be-buying-sndl-stock-while-its-dirt-cheap | nan | nan | Cannabis stocks might be out of favor at the moment, but that just means there are more under-the-radar opportunities around for bargain-hunting investors. And SNDL (NASDAQ: SNDL), the Canadian cannabis, alcohol, and investment banking company formerly known as Sundial Growers, seems like it's starting to shape up to be one of those hidden gems.
The catch is that investors will probably need to wait a few years for a return, given the market's growing preference for profitable businesses in mature industries rather than newer players in emerging industries like marijuana. In light of that, here's what you need to know to decide whether SNDL is a good option for your portfolio.
The case for buying SNDL is getting stronger
SNDL will be a much more formidable company entering 2023 than it was in recent history, and its near-term growth trajectory is one of the biggest reasons to consider an investment.
Thanks to the acquisition of Alcanna that closed in mid-2022, it's now the biggest private liquor distributor in Canada, and its trailing-12-month (TTM) revenue skyrocketed by more than 700% in the last three years, topping 494.5 million Canadian dollars. As a result, it now makes more than twice as much revenue from liquor than from marijuana, and its liquor segment is profitable as of Q3. Liquor sales are far more likely to remain stable than marijuana sales, as the alcohol industry is far more mature and experiences more predictable demand, so the pivot is also a significant de-risking of the stock.
In sum, the first full quarter of the company's financial results that include the Alcanna acquisition makes the purchase look like it is the definition of being accretive to shareholder value. That's a big point in management's favor. But the company is still spending more money than it is making, and it's unclear for how much longer that will go on.
While it isn't profitable, its TTM cash outflow was a scant CA$37.3 million, which isn't at all concerning in light of its CA$988 million in liquid securities and long-term investments, CA$278 million of which is unrestricted cash. The business has its sights set on an acquisition of The Valens Company, a smaller Canadian cannabis operator, for CA$138 million in stock. But Valens is only the latest purchase in a year-long buying frenzy that has transformed the company.
On Nov. 1, it closed its acquisition of Zenabis, a regional Canadian marijuana cultivator that brought in CA$11.1 million in Q2 of this year. Per the terms of the deal, SNDL picked up more than 22 million grams of cannabis inventory, not to mention a massive cultivation facility that's certified for exporting to the E.U. And both of those will enable it to spend less on growing fresh cannabis and setting up new facilities for a while.
Its valuation probably won't be this low for long
SNDL's management is keen to continue with its purchasing spree, and the success of the Alcanna buyout will probably eventually get noticed by the market, driving its share price upward. Right now, the stock is priced attractively, though the announcement of other acquisitions (and the closing of the Valens purchase that's anticipated in Q1) could also change that quite rapidly.
Here's how SNDL's valuation stacks up in comparison to competitors like Tilray Brands, Canopy Growth, Aurora Cannabis, and Cresco Labs:
Data by YCharts.
SNDL is among the most inexpensive of the pack based on its price-to-sales (P/S) and price-to-book (P/B) multiples. If you aren't familiar, basically that means you'll be getting a larger claim to the company's revenue as well as to its tangible assets than you might with a competitor. Another benefit of having a low valuation is that the stock is less exposed to the downside risk of shareholder flights to quality during market turbulence; investments with bloated valuations are typically among the first to get dumped when things start to look bearish.
In particular, SNDL's P/B being less than 1 is a key factor in assessing the risk level of the stock, as it means there's enough value stored in the business's assets to fully repay shareholders for their shares (at their current price, at least) in the event of a bankruptcy. Of course, bankruptcies don't happen overnight, and there's no reason to think that SNDL's grand total of $0 in debt due within a year poses any threat to its solvency. The biggest risk moving forward is that it will likely need quite some time to become profitable.
Given that the company's valuation is ripe and its first major acquisition went quite well, SNDL could be a good addition to the risky section of your portfolio. If its cannabis operations were becoming more profitable over time instead of less, it'd be a screaming buy. But for now, there are probably safer places to park your cash for growth, though that could still change over the coming year.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cresco Labs. The Motley Fool recommends Valens. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Thanks to the acquisition of Alcanna that closed in mid-2022, it's now the biggest private liquor distributor in Canada, and its trailing-12-month (TTM) revenue skyrocketed by more than 700% in the last three years, topping 494.5 million Canadian dollars. Its valuation probably won't be this low for long SNDL's management is keen to continue with its purchasing spree, and the success of the Alcanna buyout will probably eventually get noticed by the market, driving its share price upward. In particular, SNDL's P/B being less than 1 is a key factor in assessing the risk level of the stock, as it means there's enough value stored in the business's assets to fully repay shareholders for their shares (at their current price, at least) in the event of a bankruptcy. | And SNDL (NASDAQ: SNDL), the Canadian cannabis, alcohol, and investment banking company formerly known as Sundial Growers, seems like it's starting to shape up to be one of those hidden gems. The catch is that investors will probably need to wait a few years for a return, given the market's growing preference for profitable businesses in mature industries rather than newer players in emerging industries like marijuana. The business has its sights set on an acquisition of The Valens Company, a smaller Canadian cannabis operator, for CA$138 million in stock. | And SNDL (NASDAQ: SNDL), the Canadian cannabis, alcohol, and investment banking company formerly known as Sundial Growers, seems like it's starting to shape up to be one of those hidden gems. The business has its sights set on an acquisition of The Valens Company, a smaller Canadian cannabis operator, for CA$138 million in stock. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | The business has its sights set on an acquisition of The Valens Company, a smaller Canadian cannabis operator, for CA$138 million in stock. And make no mistake – it is coming. The Motley Fool has positions in and recommends Cresco Labs. |
36442.0 | 2022-12-07 00:00:00 UTC | Why Marijuana Stocks Keep Going Down | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-keep-going-down | nan | nan | What happened
The news keeps getting worse for investors in marijuana stocks.
Yesterday, cannabis news website Marijuana Moment warned of trouble getting the SAFE Banking Act (a bill to legalize banks providing banking services to marijuana companies) through Congress. Today, it appears that this warning was all too accurate. SAFE Banking will not be passed as part of a defense spending bill this year, and investors are fleeing marijuana stocks because of it.
As of 12:30 p.m. ET, shares of SNDL (NASDAQ: SNDL) are down 4.8% -- its third straight day of declines. Its smaller rival Aurora Cannabis (NASDAQ: ACB) is likewise down for a third straight day -- 6.2%. Meanwhile, Tilray (NASDAQ: TLRY) tumbled for a second straight day, leading the pack lower with a 7.9% decline.
So what
It's worth pointing out that Marijuana Moment already warned investors that this might happen yesterday. But if that's the case, then why are these stocks still going down today?
Basically, because the news got worse.
Yesterday, MM said legislators were merely debating whether they should try to pass the National Defense Authorization Act (NDAA) with included, unrelated language on marijuana banking reform. But now they've actually made their decision. Facing a withering attack from opponents in Congress, who called the idea of attaching marijuana reform to a defense bill a "heavy lift" and even a "non-starter" (reports The Hill), the House Rules Committee has produced an NDAA "without any components concerning marijuana policy," according to Marijuana Moment.
Forewarned or not, that's the opposite of what advocates of marijuana legalization were hoping would happen, and it makes sense that they'd be disappointed by this result today -- even if they knew it might happen.
Now what
Don't lose hope -- bleak as this situation looks, there's still a chance that the SAFE Banking Act will end up getting passed.
Senate Majority Leader Chuck Schumer insists that SAFE Banking retains bipartisan support and he still wants to "get it done" -- just not necessarily as part of an entirely unrelated NDAA. As North Dakota Senator Kevin Cramer, a co-sponsor of SAFE Banking, explains, attaching a marijuana banking bill to a defense spending bill "dilutes the proper role" of the former, suggesting the idea of merging the two bills wasn't all that great an idea to begin with.
Right now, it looks like Congress' priority will be to pass the NDAA before the end of this year, and proceed to marijuana reform next year instead. If this is the way things play out, it will surely be a disappointment for marijuana investors -- who will have to wait yet another year to find out if making it easier for marijuana companies to access banking services will result in more profits for marijuana companies.
Failing that, I fear the bear thesis for marijuana stocks must remain ascendant. According to analysts polled by S&P Global Market Intelligence, if marijuana remains illegal under federal law, and banks remain unable to provide banking services to marijuana companies, it will be 2024 or even 2025 before SNDL has a chance of turning profitable, 2025 or 2026 for Tilray, and Aurora Cannabis won't earn its first profit before 2027.
That's a long time to ask marijuana investors to wait.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Its smaller rival Aurora Cannabis (NASDAQ: ACB) is likewise down for a third straight day -- 6.2%. Yesterday, MM said legislators were merely debating whether they should try to pass the National Defense Authorization Act (NDAA) with included, unrelated language on marijuana banking reform. Senate Majority Leader Chuck Schumer insists that SAFE Banking retains bipartisan support and he still wants to "get it done" -- just not necessarily as part of an entirely unrelated NDAA. | Its smaller rival Aurora Cannabis (NASDAQ: ACB) is likewise down for a third straight day -- 6.2%. Yesterday, cannabis news website Marijuana Moment warned of trouble getting the SAFE Banking Act (a bill to legalize banks providing banking services to marijuana companies) through Congress. SAFE Banking will not be passed as part of a defense spending bill this year, and investors are fleeing marijuana stocks because of it. | Its smaller rival Aurora Cannabis (NASDAQ: ACB) is likewise down for a third straight day -- 6.2%. Yesterday, cannabis news website Marijuana Moment warned of trouble getting the SAFE Banking Act (a bill to legalize banks providing banking services to marijuana companies) through Congress. If this is the way things play out, it will surely be a disappointment for marijuana investors -- who will have to wait yet another year to find out if making it easier for marijuana companies to access banking services will result in more profits for marijuana companies. | Its smaller rival Aurora Cannabis (NASDAQ: ACB) is likewise down for a third straight day -- 6.2%. What happened The news keeps getting worse for investors in marijuana stocks. Yesterday, cannabis news website Marijuana Moment warned of trouble getting the SAFE Banking Act (a bill to legalize banks providing banking services to marijuana companies) through Congress. |
36443.0 | 2022-12-06 00:00:00 UTC | Why Marijuana Stocks Tanked Today | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-tanked-today | nan | nan | What happened
Bad news for investors in marijuana stocks on Tuesday: According to cannabis reporter Marijuana Moment, the SAFE Banking Act may be in trouble.
The new law, which has been under consideration for more than a year now, and which would finally make it legal for banks to provide banking services to marijuana companies (whose activities remain technically illegal under federal law), was supposed to be passed as part of the National Defense Authorization Act (NDAA) this year. (Yes, you read that right. Lawmakers are trying to attach a weed bill to a defense bill, to make the former easier to pass.)
But passage of the NDAA itself is now in question, and marijuana stocks are tanking on the news. As of 10:30 a.m. ET, shares of SNDL (NASDAQ: SNDL) -- formerly known as Sundial -- are down 4.3%. And they're falling right beside larger marijuana stocks including Tilray (NASDAQ: TLRY) and Aurora Cannabis (NASDAQ: ACB) -- down 6.5% and 7.4%, respectively.
So what
This is a little complicated, but here's the situation as it now stands: Earlier this year, the House of Representatives successfully attached the SAFE Banking Act to a bill approving the NDAA. However, worries soon arose about whether this combo-bill could pass the Senate. So the House is now working on passing a different version of the NDAA -- one that was already approved by the Senate -- and considering whether it can attach a modified version of the SAFE Banking Act (called "SAFE Plus") to this second version of a bill that it already approved.
Further complicating the issue, the House is apparently also considering adding to this bill -- and remember, this is basically a defense bill with some unrelated provisions tucked into it -- some Second Amendment language that would expand gun ownership rights. And as if that weren't all complicated enough, there's now talk of adding provisions to make it easier for employees of marijuana businesses to get a mortgage!
All of which calls to mind the old adage about legislation, sausage, and how no one should look at how either is manufactured.
Now what
For investors, all of the above basically boils down to one thing: The chances that Congress will finally lay groundwork for banks to provide banking services to marijuana companies, which would in turn lower their cost of doing business -- and grow their profits -- just got slimmer. What's more, with control over Congress poised to shift after the just-conducted midterm elections, it's even possible that all the progress toward marijuana legalization that was made over the past year will be upended in 2023.
If marijuana investors are feeling like they're caught in a dance of two steps forward, one step back (or even two steps back) today, that's entirely understandable. It's also entirely understandable why they might feel sufficiently discouraged at this point to give up and sell their marijuana stocks.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And they're falling right beside larger marijuana stocks including Tilray (NASDAQ: TLRY) and Aurora Cannabis (NASDAQ: ACB) -- down 6.5% and 7.4%, respectively. The new law, which has been under consideration for more than a year now, and which would finally make it legal for banks to provide banking services to marijuana companies (whose activities remain technically illegal under federal law), was supposed to be passed as part of the National Defense Authorization Act (NDAA) this year. So what This is a little complicated, but here's the situation as it now stands: Earlier this year, the House of Representatives successfully attached the SAFE Banking Act to a bill approving the NDAA. | And they're falling right beside larger marijuana stocks including Tilray (NASDAQ: TLRY) and Aurora Cannabis (NASDAQ: ACB) -- down 6.5% and 7.4%, respectively. The new law, which has been under consideration for more than a year now, and which would finally make it legal for banks to provide banking services to marijuana companies (whose activities remain technically illegal under federal law), was supposed to be passed as part of the National Defense Authorization Act (NDAA) this year. So what This is a little complicated, but here's the situation as it now stands: Earlier this year, the House of Representatives successfully attached the SAFE Banking Act to a bill approving the NDAA. | And they're falling right beside larger marijuana stocks including Tilray (NASDAQ: TLRY) and Aurora Cannabis (NASDAQ: ACB) -- down 6.5% and 7.4%, respectively. What happened Bad news for investors in marijuana stocks on Tuesday: According to cannabis reporter Marijuana Moment, the SAFE Banking Act may be in trouble. The new law, which has been under consideration for more than a year now, and which would finally make it legal for banks to provide banking services to marijuana companies (whose activities remain technically illegal under federal law), was supposed to be passed as part of the National Defense Authorization Act (NDAA) this year. | And they're falling right beside larger marijuana stocks including Tilray (NASDAQ: TLRY) and Aurora Cannabis (NASDAQ: ACB) -- down 6.5% and 7.4%, respectively. What happened Bad news for investors in marijuana stocks on Tuesday: According to cannabis reporter Marijuana Moment, the SAFE Banking Act may be in trouble. The new law, which has been under consideration for more than a year now, and which would finally make it legal for banks to provide banking services to marijuana companies (whose activities remain technically illegal under federal law), was supposed to be passed as part of the National Defense Authorization Act (NDAA) this year. |
36444.0 | 2022-12-05 00:00:00 UTC | Why Tilray and Other Pot Stocks Jumped Early Monday | ACB | https://www.nasdaq.com/articles/why-tilray-and-other-pot-stocks-jumped-early-monday | nan | nan | What happened
Cannabis investors today are reacting to a historic development in the industry on Friday. The stocks of Canada-based marijuana companies Tilray Brands (NASDAQ: TLRY), Aurora Cannabis (NASDAQ: ACB), and SNDL (NASDAQ: SNDL) (formerly Sundial Growers) all jumped early Monday. Tilray shares soared nearly 12%, while Aurora and SNDL stocks were up between about 6% and 7% in early trading.
Those gains didn't hold, but more good news might be coming for these stocks before the end of the year. As of 3:02 p.m. ET today, Tilray shares were up 0.2%, SNDL was lower by 1.1%, and Aurora shares had dropped by 2.9%.
So what
On Friday, President Joe Biden signed the Medical Marijuana and Cannabidiol Research Expansion Act into law. That marked the first time in U.S. history that an individual federal cannabis-reform bill was made into law. The new law, the White House says, "establishes a new registration process for conducting research on marijuana and for manufacturing marijuana products for research purposes and drug development." But further hope for additional federal action in the cannabis sector before the year ends boosted the sector today.
Image source: Getty Images.
Now what
Senate Majority Leader Chuck Schumer, a New York Democrat, also hopes the Senate will pass two additional cannabis sector bills before the holiday break, reports Barron's. One bill would allow federally regulated banks to serve businesses in the marijuana sector. The second would allow for federal grants to state and municipal programs toward expunging the records of those convicted for simple marijuana possession.
Schumer plans to include them with other legislation that is expected to pass in the Senate. That should help ensure they make it to the president's desk to sign since the House of Representatives should go along. That body has already previously passed legislation for marijuana banking reform.
Stocks of the Canadian firms were moving higher today because they especially stand to gain from cannabis banking reform in the U.S. Tilray has already built up a set of U.S.-based businesses that would provide infrastructure and a conduit for marijuana sales upon legalization. Those businesses include several craft brewers, the Breckenridge Distillery spirits maker, and hemp products company Manitoba Harvest. Tilray has said those U.S.-based businesses are currently profitable in their own right.
Aurora has a different strategy of focusing on growing its international medical marijuana businesses. It hopes the growing success of medical cannabis globally will lead to increasing legalization of consumer markets.
As U.S. legislators seem to slowly be making progress toward relaxing cannabis laws, and an increasing number of states have legalized recreational use on their level, investors are betting there are plenty of companies even outside the country to benefit from an open U.S. market.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Howard Smith has positions in Tilray Brands. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The stocks of Canada-based marijuana companies Tilray Brands (NASDAQ: TLRY), Aurora Cannabis (NASDAQ: ACB), and SNDL (NASDAQ: SNDL) (formerly Sundial Growers) all jumped early Monday. Stocks of the Canadian firms were moving higher today because they especially stand to gain from cannabis banking reform in the U.S. Tilray has already built up a set of U.S.-based businesses that would provide infrastructure and a conduit for marijuana sales upon legalization. Those businesses include several craft brewers, the Breckenridge Distillery spirits maker, and hemp products company Manitoba Harvest. | The stocks of Canada-based marijuana companies Tilray Brands (NASDAQ: TLRY), Aurora Cannabis (NASDAQ: ACB), and SNDL (NASDAQ: SNDL) (formerly Sundial Growers) all jumped early Monday. But further hope for additional federal action in the cannabis sector before the year ends boosted the sector today. Now what Senate Majority Leader Chuck Schumer, a New York Democrat, also hopes the Senate will pass two additional cannabis sector bills before the holiday break, reports Barron's. | The stocks of Canada-based marijuana companies Tilray Brands (NASDAQ: TLRY), Aurora Cannabis (NASDAQ: ACB), and SNDL (NASDAQ: SNDL) (formerly Sundial Growers) all jumped early Monday. Stocks of the Canadian firms were moving higher today because they especially stand to gain from cannabis banking reform in the U.S. Tilray has already built up a set of U.S.-based businesses that would provide infrastructure and a conduit for marijuana sales upon legalization. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | The stocks of Canada-based marijuana companies Tilray Brands (NASDAQ: TLRY), Aurora Cannabis (NASDAQ: ACB), and SNDL (NASDAQ: SNDL) (formerly Sundial Growers) all jumped early Monday. One bill would allow federally regulated banks to serve businesses in the marijuana sector. Tilray has said those U.S.-based businesses are currently profitable in their own right. |
36445.0 | 2022-12-02 00:00:00 UTC | Cannabis Stocks TLRY, ACB, CGC Have a Huge Catalyst Before 2023 | ACB | https://www.nasdaq.com/articles/cannabis-stocks-tlry-acb-cgc-have-a-huge-catalyst-before-2023 | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Cannabis stocks are drawing interest on speculation that regulation may soon replace prohibition of marijuana. Tilray (NASDAQ:TLRY), Aurora Cannabis (NASDAQ:ACB) and Canopy Growth (NASDAQ:CGC) all rose sharply Dec. 1. So did Curaleaf Holdings (OTCMKTS:CURLF), a major producer of edible marijuana, despite a report on Los Angeles middle schoolers possibly overdosing on edible cannabis in class.
President Joe Biden recently issued pardons on federal possession convictions and urged for pot be taken off Schedule 1, where it’s classed alongside heroin as a dangerous drug with no benefits.
SAFE and HOPE
Cannabis stocks enjoyed a vogue in the late 2010s after Canada legalized marijuana. But stocks created in the wake of that have been horrible investments.
For instance, Constellation Brands (NYSE:STZ), a beer and wine distributor, has had a major interest in Canopy Growth since 2018. The value of that investment is down more than 80%. Even in states where marijuana is legal, like California, illegal growers dominate the market thanks to the cost of regulation.
The industry is now scrambling to pass cannabis-related bills before year-end. Republicans take control of the House in January, and that party is suspicious of legalization. Democrats are focused on getting marijuana cash flow into communities ravaged by the drug war.
The industry’s focus is on the SAFE Banking Act. This would let cannabis stores operate within the banking system. They can’t right now, meaning stores are loaded with cash and are a prime target for criminals. SAFE may be combined with the HOPE Act, which would expunge cannabis convictions that fall disproportionately on people of color.
One bill to help the industry has already passed. H.R. 8454 will let researchers study the risks and benefits of cannabis.
What Happens Now for Cannabis Stocks?
If Congress doesn’t act this month, the current bullish move in cannabis stocks will be a bear trap. Even if reform passes, the industry must still find a way to beat illegal growers in the market.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack.
The post Cannabis Stocks TLRY, ACB, CGC Have a Huge Catalyst Before 2023 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Tilray (NASDAQ:TLRY), Aurora Cannabis (NASDAQ:ACB) and Canopy Growth (NASDAQ:CGC) all rose sharply Dec. 1. The post Cannabis Stocks TLRY, ACB, CGC Have a Huge Catalyst Before 2023 appeared first on InvestorPlace. President Joe Biden recently issued pardons on federal possession convictions and urged for pot be taken off Schedule 1, where it’s classed alongside heroin as a dangerous drug with no benefits. | Tilray (NASDAQ:TLRY), Aurora Cannabis (NASDAQ:ACB) and Canopy Growth (NASDAQ:CGC) all rose sharply Dec. 1. The post Cannabis Stocks TLRY, ACB, CGC Have a Huge Catalyst Before 2023 appeared first on InvestorPlace. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Cannabis stocks are drawing interest on speculation that regulation may soon replace prohibition of marijuana. | Tilray (NASDAQ:TLRY), Aurora Cannabis (NASDAQ:ACB) and Canopy Growth (NASDAQ:CGC) all rose sharply Dec. 1. The post Cannabis Stocks TLRY, ACB, CGC Have a Huge Catalyst Before 2023 appeared first on InvestorPlace. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Cannabis stocks are drawing interest on speculation that regulation may soon replace prohibition of marijuana. | Tilray (NASDAQ:TLRY), Aurora Cannabis (NASDAQ:ACB) and Canopy Growth (NASDAQ:CGC) all rose sharply Dec. 1. The post Cannabis Stocks TLRY, ACB, CGC Have a Huge Catalyst Before 2023 appeared first on InvestorPlace. The industry’s focus is on the SAFE Banking Act. |
36446.0 | 2022-12-02 00:00:00 UTC | If You Invested $1,000 in Aurora Cannabis In 2018, This Is How Much You Would Have Today | ACB | https://www.nasdaq.com/articles/if-you-invested-%241000-in-aurora-cannabis-in-2018-this-is-how-much-you-would-have-today | nan | nan | Aurora Cannabis (NASDAQ: ACB) is one of the most popular marijuana companies in Canada. However, its results in recent years have been lackluster, and the stock has had a hard time attracting investors. But it's not just Aurora that has been struggling, as there is no shortage of Canadian pot stocks that have been awful investments of late.
Below, I'll look at how much a $1,000 investment in Aurora four years ago would be worth today and how the stock's returns compare with some of its peers.
Aurora first traded on the NYSE on Oct. 23, 2018
Today Aurora trades on the Nasdaq, but its first major U.S. exchange listing was on the NYSE. On its first day of trading on the big exchange, the stock closed at $7.70. A $1,000 investment in the business at that price would have allowed you to purchase approximately 130 shares of Aurora. Since then, the company has done a 1:12 reverse stock split, meaning that instead of 130 shares, you would now be down to about 11.
As of Monday's close, the stock was worth $1.24, bringing the value of those 11 shares to just $13.64. That's quite a destruction of value for Aurora investors. But the sobering reality is that these poor returns aren't exclusive to Aurora, as Canopy Growth and Tilray Brands have also incurred significant declines over that same time frame.
Data by YCharts.
What went wrong?
October 2018 was a key time for the marijuana industry because that's when Canada's recreational pot market officially opened for business. Leading up to that, there was significant excitement in the industry, and investors were bullish on the industry's prospects. But over time, the results proved to be underwhelming.
Data by YCharts.
In the early days, when cannabis companies had soft comparables to go up against (since sales from the recreational market would have been zero), Aurora and other cannabis stocks looked like amazing growth businesses. But things have quickly changed since then, and now Aurora struggles to simply generate positive year-over-year growth.
Is Aurora a better buy today?
Aurora has been working toward improving its bottom line and being more of a stable investment moving forward. However, given its track record, it's hard to trust the business as Aurora still reported a net loss of nearly 1.8 billion Canadian dollars over the past 12 months, and its revenue during that time is just CA$210 million.
At this rate, Aurora remains a speculative buy and not much else. The risk that comes with owning the stock is simply too high for it to be a tenable investment. I'm not confident about its future, and the safer option is for investors to simply steer clear of this troubled pot stock.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis (NASDAQ: ACB) is one of the most popular marijuana companies in Canada. But the sobering reality is that these poor returns aren't exclusive to Aurora, as Canopy Growth and Tilray Brands have also incurred significant declines over that same time frame. However, given its track record, it's hard to trust the business as Aurora still reported a net loss of nearly 1.8 billion Canadian dollars over the past 12 months, and its revenue during that time is just CA$210 million. | Aurora Cannabis (NASDAQ: ACB) is one of the most popular marijuana companies in Canada. Below, I'll look at how much a $1,000 investment in Aurora four years ago would be worth today and how the stock's returns compare with some of its peers. Aurora first traded on the NYSE on Oct. 23, 2018 Today Aurora trades on the Nasdaq, but its first major U.S. exchange listing was on the NYSE. | Aurora Cannabis (NASDAQ: ACB) is one of the most popular marijuana companies in Canada. Below, I'll look at how much a $1,000 investment in Aurora four years ago would be worth today and how the stock's returns compare with some of its peers. Aurora first traded on the NYSE on Oct. 23, 2018 Today Aurora trades on the Nasdaq, but its first major U.S. exchange listing was on the NYSE. | Aurora Cannabis (NASDAQ: ACB) is one of the most popular marijuana companies in Canada. However, its results in recent years have been lackluster, and the stock has had a hard time attracting investors. The Motley Fool has no position in any of the stocks mentioned. |
36447.0 | 2022-11-18 00:00:00 UTC | Where Will Aurora Cannabis Be in 5 Years? | ACB | https://www.nasdaq.com/articles/where-will-aurora-cannabis-be-in-5-years | nan | nan | It wasn't all that long ago that pot producer Aurora Cannabis (NASDAQ: ACB) was a leading company in the cannabis industry. Its sales growth was strong and the company was expanding its operations. Nowadays, the company's CEO is working to simplify operations and shut down facilities in order to keep costs down and get Aurora closer to profitability.
Aurora's business hasn't evolved the way many in the industry would have expected or hoped. Predicting where it will go from here could also be a challenge given the industry's ongoing changes. But here's where I could see the company going from here on out -- and based on that, I'll also assess whether it would make for a good investment right now.
The landscape in the U.S. could change everything
Right now, the big unknown is what will happen in the U.S. market. It doesn't affect Aurora today, but federal legalization is the most significant event that could take place in the industry within the next five years, so it requires consideration.
It has been more than four years since Canada legalized marijuana for recreational use, and cannabis companies are arguably doing worse, not better. An influx of competition has made it difficult for one brand to truly dominate, especially given the restrictions on advertising and marketing (it's virtually non-existent). So a U.S. market opening up could be welcome news to Canadian cannabis companies desperate for a new growth avenue.
Aurora hasn't shown much interest in the U.S., but in 2020 it did acquire Reliva, which makes hemp-derived cannabidiol products in the U.S. At $40 million, it wasn't a huge transaction, but it could help Aurora expand into the U.S. if and when the market opens up. I believe Aurora is being conservative right now because it is focusing on profitability and it also doesn't have the deep pockets rival Canopy Growth has, thanks to billions of dollars that beer maker Constellation Brands invested in the company back in 2018.
When the opportunity arises, and assuming legalization does happen, I predict Aurora will likely jump at the chance to expand into the U.S. It would be a huge mistake not to, particularly for a company that's struggling to generate growth right now.
Why an acquisition could be inevitable
The big challenge for Aurora is that it simply may not have the resources at its disposal to make a big move into a market and be the strong growth company it once was. In its first-quarter results of fiscal 2023 (period ended Sept. 30), Aurora's net sales were less than 50 million Canadian dollars, and declined 18% year over year.
While it narrowed its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss to CA$8.7 million, the company also used up CA$31.1 million in Q1 to fund its day-to-day operating activities, which was an increase from an outflow of CA$22.7 million a year earlier. The business isn't going to run out of money anytime soon (Aurora has CA$369.3 million in cash and cash equivalents on its books), but it also doesn't have a stockpile of money to be able to make a big move.
As a result of poor financials and the need to raise cash through offerings over the years, Aurora's stock has taken a pounding. This year alone it has cratered 70%, sending its market cap down to just under $500 million. It's not a tailspin that I can see the company getting out of anytime soon, even if it achieves adjusted EBITDA profitability.
But with the company's more modest valuation and improving bottom line, it could be a business that a larger company, whether it's in cannabis or another industry, decides to buy and pump money into. On its own, too much would have to go right over the next five years for Aurora for its business to be strong enough to be able to expand and be a good growth investment again. And rather than continuing to struggle, I would expect management to seek out a sale of the company at some point in the future.
Should you buy Aurora Cannabis' stock today?
Although Aurora is getting closer to adjusted EBITDA profitability, its net loss was still CA$51.9 million in Q1. And with a gross profit before fair value adjustments of less than CA$2 million, I'm not sure Aurora will ever truly be profitable (without the help of fair value adjustments, which can be incredibly volatile) with any consistency.
The company's path is uncertain, and whether legalization takes place or not in the U.S., more consolidation looks inevitable in the Canadian pot market. And Aurora could be an attractive asset for a bigger business to acquire for the sake of increasing market share. But in the meantime, the stock could continue to fall further down in price, and I wouldn't suggest that investors go along for the ride.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Brands. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | It wasn't all that long ago that pot producer Aurora Cannabis (NASDAQ: ACB) was a leading company in the cannabis industry. It doesn't affect Aurora today, but federal legalization is the most significant event that could take place in the industry within the next five years, so it requires consideration. I believe Aurora is being conservative right now because it is focusing on profitability and it also doesn't have the deep pockets rival Canopy Growth has, thanks to billions of dollars that beer maker Constellation Brands invested in the company back in 2018. | It wasn't all that long ago that pot producer Aurora Cannabis (NASDAQ: ACB) was a leading company in the cannabis industry. In its first-quarter results of fiscal 2023 (period ended Sept. 30), Aurora's net sales were less than 50 million Canadian dollars, and declined 18% year over year. Should you buy Aurora Cannabis' stock today? | It wasn't all that long ago that pot producer Aurora Cannabis (NASDAQ: ACB) was a leading company in the cannabis industry. Aurora hasn't shown much interest in the U.S., but in 2020 it did acquire Reliva, which makes hemp-derived cannabidiol products in the U.S. At $40 million, it wasn't a huge transaction, but it could help Aurora expand into the U.S. if and when the market opens up. Why an acquisition could be inevitable The big challenge for Aurora is that it simply may not have the resources at its disposal to make a big move into a market and be the strong growth company it once was. | It wasn't all that long ago that pot producer Aurora Cannabis (NASDAQ: ACB) was a leading company in the cannabis industry. Its sales growth was strong and the company was expanding its operations. On its own, too much would have to go right over the next five years for Aurora for its business to be strong enough to be able to expand and be a good growth investment again. |
36448.0 | 2022-11-17 00:00:00 UTC | Canopy Growth Just Made a Smart Move. Here's How to Profit | ACB | https://www.nasdaq.com/articles/canopy-growth-just-made-a-smart-move.-heres-how-to-profit | nan | nan | On Oct. 25, the Canadian cannabis company Canopy Growth (NASDAQ: CGC) announced that it wasn't going to wait for marijuana legalization to occur in the U.S. before proceeding to enter the country's market. With the implications of that major announcement upending investors' prior assumptions, it's no surprise that its shares have risen by more than 70% in the last month.
But there could be even more growth on the way. For investors looking for an entry into cannabis stocks, Canopy's decision might be an attractive place to start. Here's why.
These strategic plays could be a setup for future success
Canopy's attempt at a foray into the U.S. market comes hot on the tail of its late September decision to divest its retail cannabis business in Canada. Selling off its retail outlets is expected to result in annual cost savings between CAD$70 million and CAD$100 million -- a significant sum when considering its fiscal year 2022 total operating expenses were near CAD$509.2 million.
Management's motivations are quite clear: Reduce the company's footprint in the over-saturated Canadian market to save on overhead costs, and increase its ability to cash in on the growing American market as it opens via state-level or federal marijuana initiatives.
The shift needs to happen for a couple of reasons. First, Canopy's net revenue shrank by 10% year over year as of its latest earnings report, from the second quarter of its fiscal 2023. Its Canadian cannabis sales plummeted by 27% compared to a year prior, indicating a severe mismatch between its products and the level of demand in the market. And while its gross margin is improving relative to its mid-year lows, it still isn't profitable, and there's no clear trend toward profitability either. So there's little incentive to keep funneling more resources into competing in Canada when the U.S. market is beckoning.
Regarding the details of its entry into the U.S., Canopy's newly formed entity, Canopy USA, will gain the option to purchase up to 100% ownership of a trio of U.S.-based marijuana companies. There's Acreage, which has locations in New Jersey and New York, another business called Wana that's based out of Colorado, and a third called Jetty, based in California.
While it's doubtful that any of the three would immediately contribute to the bottom line, they do bring several new brands into Canopy's portfolio, not to mention regional distribution networks that may come in handy.
But shareholders need to assent to the deals during a special meeting in January in order for the actual acquisitions, which are likely to be made using shares of Canopy stock, to move forward. Critically, per the terms of the transaction, Canopy's shares won't have voting rights or direct control of Canopy USA, nor will they have any economic interest whatsoever, though the shares of the U.S. entity will ultimately be convertible into Canopy shares. That'll come in handy in the event of a catalyst like marijuana legalization.
What you should do
Canopy's plan to compete in the U.S. makes it a more attractive prospect than Canada-focused companies like Aurora Cannabis. At the same time, its success in the U.S. market is not guaranteed. Therefore, investors should approach the stock with the understanding that it's essentially a turnaround play. That means it's quite risky, and it probably isn't the right opportunity for most investors.
If the prospect of getting a (large) haircut on your investment isn't too scary, starting a small position in Canopy stock in the next few months could be a smart move. Assuming the company ends up exercising its options to enter the U.S. market -- and it probably will over the next few years -- it'll likely be returning to revenue growth.
While reaching profitability will remain a distant goal, two of the businesses Canopy has the option of buying, Jetty and Wana, are focused on selling high-value-added products like vapes and edibles, which could help to shore up margins somewhat. And if more states legalize marijuana, its acquisition targets will give it decent geographical coverage throughout the country, so it should be positioned to benefit.
The linchpin of this strategy depends on the persistence of robust demand for cannabis in the U.S. If the market starts to get saturated, much like it did in Canada, it'll make top-line growth much harder to come by, and the market won't like it. So be on the lookout for burgeoning inventories, falling average selling prices, and delays with legalization in states where it was expected to pass, as each of those developments will point to hard times ahead for Canopy and its competitors.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | These strategic plays could be a setup for future success Canopy's attempt at a foray into the U.S. market comes hot on the tail of its late September decision to divest its retail cannabis business in Canada. While reaching profitability will remain a distant goal, two of the businesses Canopy has the option of buying, Jetty and Wana, are focused on selling high-value-added products like vapes and edibles, which could help to shore up margins somewhat. So be on the lookout for burgeoning inventories, falling average selling prices, and delays with legalization in states where it was expected to pass, as each of those developments will point to hard times ahead for Canopy and its competitors. | On Oct. 25, the Canadian cannabis company Canopy Growth (NASDAQ: CGC) announced that it wasn't going to wait for marijuana legalization to occur in the U.S. before proceeding to enter the country's market. Selling off its retail outlets is expected to result in annual cost savings between CAD$70 million and CAD$100 million -- a significant sum when considering its fiscal year 2022 total operating expenses were near CAD$509.2 million. Critically, per the terms of the transaction, Canopy's shares won't have voting rights or direct control of Canopy USA, nor will they have any economic interest whatsoever, though the shares of the U.S. entity will ultimately be convertible into Canopy shares. | On Oct. 25, the Canadian cannabis company Canopy Growth (NASDAQ: CGC) announced that it wasn't going to wait for marijuana legalization to occur in the U.S. before proceeding to enter the country's market. Critically, per the terms of the transaction, Canopy's shares won't have voting rights or direct control of Canopy USA, nor will they have any economic interest whatsoever, though the shares of the U.S. entity will ultimately be convertible into Canopy shares. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | On Oct. 25, the Canadian cannabis company Canopy Growth (NASDAQ: CGC) announced that it wasn't going to wait for marijuana legalization to occur in the U.S. before proceeding to enter the country's market. For investors looking for an entry into cannabis stocks, Canopy's decision might be an attractive place to start. If the market starts to get saturated, much like it did in Canada, it'll make top-line growth much harder to come by, and the market won't like it. |
36449.0 | 2022-11-14 00:00:00 UTC | Why Aurora Cannabis and Tilray -- but Not Curaleaf -- Wilted on Monday | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-and-tilray-but-not-curaleaf-wilted-on-monday | nan | nan | What happened
Marijuana stocks as a class rallied strongly last week as investors found good news in the earnings reports of Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) -- and perhaps a bit of hope for federal marijuana reform after Democrats' stronger-than-expected showing in the midterm elections.
This week, however, investor enthusiasm for the cannabis sector seems to have gone wobbly. While they initially rose strongly -- by as much as 5% in early trading Monday -- marijuana stocks have given back most of those gains. For example, as of 10:15 a.m. ET, Canopy was still up 0.7%, but Aurora was trading down 0.7%. Elsewhere in the sector, Tilray Brands' (NASDAQ: TLRY) strong early gains were pared to just 1.6%.
Only OTC-listed cannabis stock Curaleaf Holdings (OTC: CURLF) continued to power higher -- up 3.3%.
So what
Not coincidentally, Curaleaf is also the only big-name marijuana stock that had actual news to report Monday morning. The Massachusetts-based company announced that it is expanding its operations into California, launching the sale of pre-rolled "Grassroots" branded marijuana joints boosted with "diamonds" of tetrahydrocannabinolic acid (THCA, a precursor to the high-inducing chemical THC ).
Curaleaf management further noted that it is rebranding Grassroots in both California and Maryland, and plans to expand that rebranding to all seven of its markets "in the coming months." Investors seem to be betting that the changes Curaleaf is making will help to differentiate its product from other marijuana brands, helping the company to grow sales (which were up 7% in its most recently reported quarter).
Now what
Of course, while that would be good news for Curaleaf, if it gains market share at the expense of its competitors, it could be bad news for Aurora, Canopy Growth, and/or Tilray. That might explain why those three stocks are underperforming Curaleaf Monday morning.
It's worth remembering, however, that even the news that helped boost the prices of marijuana stocks last week was hardly great. Aurora Cannabis, for example, reported an 18% decline in sales for its most recent quarter, and Canopy Growth's sales slid 10%. (Tilray reported more than a month ago -- a 9% decline in sales). And none of these four companies are earning profits.
Now that investors have had the weekend to digest those latest reports, they may have concluded that declining sales and continuing losses might not really justify bidding up Aurora stock by 17%, Canopy by 28%, or Tilray by 10% -- and that this might be a fine time to take some profits.
If that's the conclusion investors have come to, I'm inclined to agree with them.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Marijuana stocks as a class rallied strongly last week as investors found good news in the earnings reports of Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) -- and perhaps a bit of hope for federal marijuana reform after Democrats' stronger-than-expected showing in the midterm elections. The Massachusetts-based company announced that it is expanding its operations into California, launching the sale of pre-rolled "Grassroots" branded marijuana joints boosted with "diamonds" of tetrahydrocannabinolic acid (THCA, a precursor to the high-inducing chemical THC ). Now that investors have had the weekend to digest those latest reports, they may have concluded that declining sales and continuing losses might not really justify bidding up Aurora stock by 17%, Canopy by 28%, or Tilray by 10% -- and that this might be a fine time to take some profits. | What happened Marijuana stocks as a class rallied strongly last week as investors found good news in the earnings reports of Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) -- and perhaps a bit of hope for federal marijuana reform after Democrats' stronger-than-expected showing in the midterm elections. Elsewhere in the sector, Tilray Brands' (NASDAQ: TLRY) strong early gains were pared to just 1.6%. Aurora Cannabis, for example, reported an 18% decline in sales for its most recent quarter, and Canopy Growth's sales slid 10%. | What happened Marijuana stocks as a class rallied strongly last week as investors found good news in the earnings reports of Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) -- and perhaps a bit of hope for federal marijuana reform after Democrats' stronger-than-expected showing in the midterm elections. Now that investors have had the weekend to digest those latest reports, they may have concluded that declining sales and continuing losses might not really justify bidding up Aurora stock by 17%, Canopy by 28%, or Tilray by 10% -- and that this might be a fine time to take some profits. See the 10 stocks *Stock Advisor returns as of November 7, 2022 Rich Smith has no position in any of the stocks mentioned. | What happened Marijuana stocks as a class rallied strongly last week as investors found good news in the earnings reports of Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) -- and perhaps a bit of hope for federal marijuana reform after Democrats' stronger-than-expected showing in the midterm elections. So what Not coincidentally, Curaleaf is also the only big-name marijuana stock that had actual news to report Monday morning. Investors seem to be betting that the changes Curaleaf is making will help to differentiate its product from other marijuana brands, helping the company to grow sales (which were up 7% in its most recently reported quarter). |
36450.0 | 2022-11-14 00:00:00 UTC | Aurora Cannabis Climbs 16% On Profit Guidance Despite Missing Q1 Analyst Forecasts | ACB | https://www.nasdaq.com/articles/aurora-cannabis-climbs-16-on-profit-guidance-despite-missing-q1-analyst-forecasts | nan | nan | Shares of global cannabis industry leader Aurora Cannabis (CA:ACB, US:ACB) ended the week with a 16% share price boost following the release of the group's first quarter financial update to investors.
At a first glance, the company actually missed consensus analyst forecasts at both the top and bottom line but continued to excite investors thanks to its outlook commentary.
For the first quarter of FY23, Aurora’s total revenue declined -18% to $49.2 million from $60.1 million in the prior year and fell short of analyst forecasts around $53 million. When compared to the prior quarter, revenue only declined -2%.
The group's SG&A expenses declined by -8% to $42.2 million, while R&D expenses were slashed -56% to $1.6 million.
Aurora’s adjusted EBITDA, a key measure of the group’s underlying profitability, improved +21% over the year to -$8.7 million and came in marginally below the streets’ -$8.1 million forecast.
Cannabis sales volumes declined -7% over the quarter to 12.2 tonnes and the net average sale price increased +4% to $5.32. Prices have continued to recover from all-time lows following industry wide overproduction causing supply and demand imbalances in the rapidly growing industry.
Aurora ended the period with $428.2 million in cash, falling from $488.8 million in the prior quarter.
During the quarter, ACB management discussed that they remain on track to achieve up to $170 million in cost savings over 2022 with $140 million realized during the quarter. Due to the cost savings already achieved, Aurora reduced debt obligations with the early repurchase of $160 million of convertible notes.
Looking ahead, management reiterated that Aurora expects to achieve adjusted EBITDA profitability by the 31st of December in 2022.
For the next quarter, Aurora expects to generate similar levels of Cannabis revenue as in Q2 but will include the first full quarter of revenue contribution from the firm's recent Bevo farms acquisition. Bevo Farms will add positive revenue and positive adjusted EBITDA to the stocks income statement.
Cantor Fitzgerald analyst Pablo Zuanic sees Aurora as more of a pure Cannabis play when compared to peers as the firm generates more than 80% of profits from the domestic and international cannabis business.
Zuanic believes the discount in the stock is unwarranted as it has a stronger balance sheet. The firm remains ‘buy’ rated on the stock with a $3 price target.
On average, the street remains ‘neutral’ rated on the stock with an average $2.10 price target suggesting the stock is trading around fair value.
The Fintel platform highlights that the company has experienced above average levels of institutional accumulation described by an ownership accumulation score of 64.59.
The score ranks ACB in the top 25% of 35,250 screened global securities. Aurora has a total of 296 institutions on the register that collectively own 61.9 million shares.
Some of the largest institutions include: Millennium Management, Renaissance Technologies, Mirae Asset Global Investments, D. E. Shaw & Co. and Two Sigma.
This story originally appeared on Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of global cannabis industry leader Aurora Cannabis (CA:ACB, US:ACB) ended the week with a 16% share price boost following the release of the group's first quarter financial update to investors. During the quarter, ACB management discussed that they remain on track to achieve up to $170 million in cost savings over 2022 with $140 million realized during the quarter. The score ranks ACB in the top 25% of 35,250 screened global securities. | Shares of global cannabis industry leader Aurora Cannabis (CA:ACB, US:ACB) ended the week with a 16% share price boost following the release of the group's first quarter financial update to investors. During the quarter, ACB management discussed that they remain on track to achieve up to $170 million in cost savings over 2022 with $140 million realized during the quarter. The score ranks ACB in the top 25% of 35,250 screened global securities. | Shares of global cannabis industry leader Aurora Cannabis (CA:ACB, US:ACB) ended the week with a 16% share price boost following the release of the group's first quarter financial update to investors. During the quarter, ACB management discussed that they remain on track to achieve up to $170 million in cost savings over 2022 with $140 million realized during the quarter. The score ranks ACB in the top 25% of 35,250 screened global securities. | Shares of global cannabis industry leader Aurora Cannabis (CA:ACB, US:ACB) ended the week with a 16% share price boost following the release of the group's first quarter financial update to investors. During the quarter, ACB management discussed that they remain on track to achieve up to $170 million in cost savings over 2022 with $140 million realized during the quarter. The score ranks ACB in the top 25% of 35,250 screened global securities. |
36451.0 | 2022-11-11 00:00:00 UTC | Why Aurora Cannabis, Canopy Growth, and Tilray Stocks Glowed Green on Friday | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-growth-and-tilray-stocks-glowed-green-on-friday | nan | nan | What happened
Another day, another marijuana earnings report, and another rally in marijuana stocks! Much like Wednesday's earnings report from Canopy Growth (NASDAQ: CGC) set off a (short-lived) rally in share prices at Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) on Wednesday, on Friday good news from Aurora Cannabis is helping to boost the stock prices of Canopy and Tilray.
As of 10:55 a.m. ET, Aurora Cannabis stock is up a strong 16.4%, while Canopy is getting a 10% boost and Tilray is bringing up the rear with a 7.2% gain.
So what
Exactly how good was Aurora's earnings report? Revenue for the fiscal first quarter of 2023 was 49.3 million Canadian dollars, down 18% year over year, with medical marijuana sales down 23% and consumer sales down 28%. That's not a particularly great start.
And it gets worse. Aurora Cannabis' net loss for the quarter -- CA$51.9 million -- was four times last year's CA$11.9 million net loss.
Nevertheless, Aurora emphasized that its loss for the quarter was down significantly from the fiscal fourth quarter of 2022, in which the company reported losses of CA$618.8 million. Aurora also argued that when calculated according to its formula for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), losses for the quarter -- CA$8.7 million -- showed an improvement both against the prior quarter and the prior year's Q1.
Now what
I suppose that's a sort of good news. What seems to be getting investors most excited about Aurora's report, though, is the prospect of losses turning into profits -- even if those profits are only of the adjusted EBITDA variety.
According to management, Aurora Cannabis is currently on track to reach adjusted EBITDA profitability by the end of this year. Management wasn't specific on precisely how much adjusted EBITDA it hopes to claim as profit this year. And management made no promises about reaching real profitability as calculated according to generally accepted accounting principles (GAAP). Nevertheless, investors seem to feel that simply being able to claim some kind of profitability would be a win for Aurora Cannabis, and the prospect of seeing that happen within the next 12 months is giving them something to look forward to.
But here's why I think that's a bad reason to want to own Aurora Cannabis stock (or any other marijuana stock that's trying to imitate the company's moves). Aurora argues in its report that part of the reason why it is "quickly approaching our positive Adjusted EBITDA goal" is because it has succeeded in cutting CA$170 million in annual costs from its business. The problem is, if you dig into the company's income statement, you'll find that savings from cutting selling, general, and administrative expenses in the quarter were only down 8% in Q1 (falling much more slowly than revenue is falling). Meanwhile, Aurora cut its spending on research and development (R&D) -- the growth driver of any business -- by 56%.
Cutting spending on R&D may help to slim Aurora's losses in the short term. In the longer term, however, it's more likely to hamper the company's ability to grow its most profitable products, and grow its revenue. And seeing as revenue declines are the source of most of Aurora's problems right now, I'm a whole lot less excited about this stock today than most other investors seem to be.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Much like Wednesday's earnings report from Canopy Growth (NASDAQ: CGC) set off a (short-lived) rally in share prices at Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) on Wednesday, on Friday good news from Aurora Cannabis is helping to boost the stock prices of Canopy and Tilray. And management made no promises about reaching real profitability as calculated according to generally accepted accounting principles (GAAP). Nevertheless, investors seem to feel that simply being able to claim some kind of profitability would be a win for Aurora Cannabis, and the prospect of seeing that happen within the next 12 months is giving them something to look forward to. | Much like Wednesday's earnings report from Canopy Growth (NASDAQ: CGC) set off a (short-lived) rally in share prices at Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) on Wednesday, on Friday good news from Aurora Cannabis is helping to boost the stock prices of Canopy and Tilray. Aurora Cannabis' net loss for the quarter -- CA$51.9 million -- was four times last year's CA$11.9 million net loss. Nevertheless, Aurora emphasized that its loss for the quarter was down significantly from the fiscal fourth quarter of 2022, in which the company reported losses of CA$618.8 million. | Much like Wednesday's earnings report from Canopy Growth (NASDAQ: CGC) set off a (short-lived) rally in share prices at Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) on Wednesday, on Friday good news from Aurora Cannabis is helping to boost the stock prices of Canopy and Tilray. Aurora Cannabis' net loss for the quarter -- CA$51.9 million -- was four times last year's CA$11.9 million net loss. But here's why I think that's a bad reason to want to own Aurora Cannabis stock (or any other marijuana stock that's trying to imitate the company's moves). | Much like Wednesday's earnings report from Canopy Growth (NASDAQ: CGC) set off a (short-lived) rally in share prices at Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) on Wednesday, on Friday good news from Aurora Cannabis is helping to boost the stock prices of Canopy and Tilray. Nevertheless, Aurora emphasized that its loss for the quarter was down significantly from the fiscal fourth quarter of 2022, in which the company reported losses of CA$618.8 million. 10 stocks we like better than Aurora Cannabis Inc. |
36452.0 | 2022-11-10 00:00:00 UTC | Aurora Cannabis Inc. (ACB) Q1 2023 Earnings Call Transcript | ACB | https://www.nasdaq.com/articles/aurora-cannabis-inc.-acb-q1-2023-earnings-call-transcript | nan | nan | Image source: The Motley Fool.
Aurora Cannabis Inc. (NASDAQ: ACB)
Q1 2023 Earnings Call
Nov 10, 2022, 5:00 p.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Greetings, and welcome to the Aurora Cannabis Inc. fiscal 2023 first quarter conference call. All participants will be in a listen-only mode, and a question-and-answer session will follow the formal presentation. This conference call is being recorded today, Thursday, November 10, 2022.
I would now like to turn the conference over to your host, Ananth Krishnan, vice president, strategic finance. Thank you, sir. Please go ahead.
Ananth Krishnan -- Vice President, Strategic Finance
Thank you, John. We appreciate you all joining us this afternoon. With me today are CEO Miguel Martin; and CFO Glen Ibbott. After the market closed, Aurora issued a news release announcing our fiscal 2023 first quarter financial results.
This news release, accompanying financial statements, and MD&A are available on our IR website and can also be accessed via SEDAR and EDGAR. In addition, you can find a supplemental information deck on our IR website. Listeners are reminded that certain matters discussed on today's conference call could constitute forward-looking statements that are subject to risks and uncertainties related to our future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements.
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The risk factors that may affect actual results are detailed in our Annual Information Form and other periodic filings and registration statements. These documents may similarly be accessed via SEDAR and EDGAR. Lastly, I want to remind everyone that we will be holding our Annual General and Special Meeting of Shareholders on November 14th, and the meeting materials have been mailed out to shareholders or can be found on SEDAR or on our IR website. We encourage you to review the meeting materials before voting your shares at the meeting and look forward to your participation in the virtual-only format.
Following prepared remarks by Miguel and Glen, we will conduct a question-and-answer session with our covering analysts. However, we ask that you limit yourselves to one question and then get back in the queue for follow-up. With that, I will turn the call over to Miguel. Please go ahead.
Miguel Martin -- Chief Executive Officer
Thank you, Ananth. We will keep our remarks brief as our Q4 conference call was held recently, but I want to reiterate a few key items before I turn the call over to Glen for an in-depth financial review. We are very close to achieving our primary objective of reaching positive adjusted EBITDA by the end of the calendar year. This will be an incredible achievement that we believe is also sustainable.
In fact, the structural changes we have made over the past several quarters have resulted in long-term benefits for Aurora, and we look forward to demonstrating consistent financial performance in the coming quarters. Our enthusiasm is anchored by our position as the No.1 Canadian LP in global medical cannabis, and the underlying top-line trend is undeniable, upwards and to the right with a loyal base of patients within existing medical markets and more developed countries poised to open up. Beyond revenue, medical cannabis also commands enviable adjusted gross margins that consistently exceed 60%, twice that of consumer cannabis. For these reasons, along with its defensive nature and volatile times, we believe medical is the best segment to invest behind.
The second anchor of our enthusiasm has been our ability to rationalize the business to the current environment. The annualized cost savings of $150 million to $170 million will be complete by the end of the calendar year, at which time we will have materially reduced our cash burn and become EBITDA positive, as I said a moment ago. A third anchor of success is our balance sheet, which is stronger than ever. It's enabled us to repurchase approximately $217 million in convertible debt since Q3 2022 and has resulted in considerable savings on cash interest costs, about $12 million annually.
We are further benefiting from improved working capital and cash flow and are fortunate to be one of only a handful of companies within the cannabis interest to have a net cash position. In turbulent and uncertain times, this is imperative. Finally, our investments in science, breeding, and genetics are really beginning to pay off. Proprietary cultivars launched from our breeding program in the last 12 months were responsible for almost a third of our revenue in Canada during Q1, have driven meaningful improvements to yields, and are now generating incremental, high-margin revenue through license agreements.
We have recently signed royalty-based agreements to license genetics to two of the largest Canadian LPs by cannabis revenue and expect more to follow. So, with those key strengths as a backdrop, let's take a deeper dive into our global medical cannabis business. During Q1, international medical revenue fell compared to Q4 last year. This was largely due to timing of shipments to the Australian market, which resulted in lower sales in Q1.
Although we expect a solid delivery and recovery in Q2, as we have long said, international is somewhat unpredictable on a quarter-to-quarter basis and revenue contributions from individual countries can ebb and flow as these new markets develop. This is why it is so important for us to be operating across many countries, nearly a dozen outside of Canada. A broad reach affords us relative insulation to the economic climate and conditions in specific markets across Europe, Israel, and Australia, and means the overall trend is toward growth. And our regulatory expertise, compliance protocols, testing, and science capability support our leadership position.
Now, let's discuss developments in a few select countries. In Germany, the largest market in the EU with 83 million citizens, but only about 100,000 to 120,000 medical cannabis patients, the health minister presented a cornerstone paper on planned rec legislation on October 26. The plan is designed to regulate the control distribution and consumption of cannabis for recreational purposes among adults, and he said it could become law in 2024. We believe Aurora's position as one of only three companies with a medical domestic production license and our current position as the No.
2 LP in the dried flower segment will give us a significant advantage as the regulatory framework continues to be developed. In Poland, we are maintaining our leadership position by continuing to invest in marketing to support our flower and extract products despite new entrants. We completed two shipments during Q1 and submitted dossiers for three new products for regulatory review, with a timeline to market of approximately one year. In France, a market that we believe could be as big as Germany, authorities have announced that the French medical cannabis pilot program is going to be extended by another year, until March of 2024.
After internal assessment, as well as discussions with our distribution partner, we decided to continue participating as the sole supplier of dried flower to the country to ensure Aurora's position for success following the French pilot. In the Czech Republic, beyond our continued success in the dried flower segment, regulators approved the import of new extract products including THC-dominant and balanced extracts. We also hold leadership positions in other key markets including U.K. and Australia and expect continued growth in these markets as the number of prescribers and patients steadily grow.
And so, the cannabis growth story continues to play out across international medical and recreational markets, with growing acceptance acting like a domino effect. The bottom line is this, as we said many times, our success in medical cannabis provides us with a significant first-mover advantage. And we believe our leadership will be portable to rec markets as they open up. Turning to Canadian -- to the Canadian medical market, we saw some churn of noninsured patients, but we continue to improve the contribution of this business through finding efficiencies.
Importantly, the absolute level of revenue from insured patients has not declined, and insured patients comprised 83% of all medical sales, compared to 81% in Q4, while our leading market share is approximately 24%. We are very optimistic about the future of this segment as we continue to increase the number of patients in the insured category and have seen consistent increases in basket size and participation rates over the past few quarters as we continue to improve our offerings. Switching to Canadian adult rec. Our Q1 revenue increased sequentially by 9% compared to Q4, primarily because of our strength in product offerings made possible through our Thrive acquisition.
In Q1, we benefited from an extra month of Thrive contributions versus the previous quarter. However, the Aurora business declined slightly due to the OCS cyberattack and a strike in B.C. But thankfully those issues are now fully resolved. In addition, margins were roughly flat quarter over quarter.
Looking ahead to Q2, we will miss a shipping week due to the December holidays. As our Canadian rec business continues to evolve despite a long and continuing period of macro challenges, our focus remains on maximizing profitability through low-cost production and high-margin categories. We continue to believe our investment in science and innovation drives a significant competitive advantage. And this quarter debuted an unprecedented fall lineup of cannabis products across adult use and medical markets.
These new products were developed from a deep understanding of consumer and patient interests and needs, and contain all the critical components necessary to compete, intense and exciting aromas, key visual and tactile attributes, and high-potency THC. In fact, beginning last month, Aurora patients were given access to the largest-ever selection of products and formats on Aurora Medical. During Q1, we launched 24 SKUs in the medical channel, and we'll be launching another 78 in Q2. The products from our full portfolio of adult-use cannabis brands including Being Quickstrips, Greybeard premium flower, a wider selection of pre-rolls, new concentrates, and a new offering of minor cannabinoid oils.
This online rollout is then followed by availability in Canadian adult-use retailers with select products available in certain regions. The synergies related to innovation and the leveraging of infrastructure in developing and launching medical and adult rec products are clear, and our ability to be competitive in both provides us with inherent advantages. Turning to our scientific leadership in cannabis breeding and genetics, we think these attributes will provide us with a distinct advantage to drive value across all tiers of the consumer and medical categories as our new product launches demonstrate. We continue to drive meaningful improvements and yield through new proprietary cultivars, while our breeding program enables us to produce top-quality flower and industry-leading margins.
As an example, our Farm Gas cultivar delivers nearly double the yield of our traditional cultivars and does so an average of 26.5% THC. We also remain committed to furthering medical cannabis clinical research in Canada, with the first shipment of product to a palliative care study occurring last August. Finally, let's discuss Bevo, which is one of the largest suppliers of propagated vegetables and ornamental plants in North America. Recall that we purchased a controlling interest in Bevo back in August and anticipate that will drive significant shareholder value to us in the long run.
As part of the transaction, we are repurposing the Aurora Sky facility for orchid and vegetable propagation with minimal capital investment. This will greatly increase Bevo's production capability and extended shipping range in Canada and the U.S. We will also enable us to generate incremental revenue and adjusted EBITDA while saving on previously announced wind down and selling costs. For the approximately five weeks that we controlled Bevo in Q1, it contributed $3.3 million to our revenues and achieved adjusted gross margins of 16%.
When we announced the controlling investment in Bevo, we highlighted the seasonal nature of their business with the January to June period representing the majority of the revenue and EBITDA generation of the business. Bevo is performing to internal expectations and is expected to be a positive contributor to our path for positive adjusted EBITDA. And with that, I'd like to turn the call over to Glen for our financial review.
Glen Ibbott -- Chief Financial Officer
Thank you, Miguel, and good afternoon. I'd like to begin by reminding everyone that we're pleased to have one of the strongest balance sheets among Canadian LPs and this quarter is no different. As of yesterday, we have approximately $393 million of cash including $58 million of restricted cash. And we have $186 million of principal remaining on our convertible notes that are due in 2024.
Subsequent to our September 30 quarter end, we repurchased $23 million in principal on our convertible notes at a total cost of $21.8 million in cash, including accrued interest. We believe that debt reduction, even though maturity, is still more than a year out, is a smart and defensive capital allocation decision, which reduces balance sheet risk, especially important during turbulent markets. Our debt reduction since Q3 2022 has resulted in annualized cash interest savings of approximately $12 million, and we continue to have access to significant capacity under our base shelf prospectus, including $156.8 million remaining under our ATM program. That reflects how we issued 23.7 million shares subsequent to September 30 for gross proceeds of $40.2 million, and that's to be used for strategic purposes including debt reduction.
Our cash flow is improving with $20.1 million used in operations and working capital in Q1 or $12.4 million excluding restructuring costs. And that's down from $22.5 million in Q4. In Q1, we reported approximately $5.5 million in capital expenditures, down from $7.8 million the last quarter. Q1 capex was fully offset by proceeds from disposals of property and equipment and from government grants.
Our ongoing cost transformation program is expected to continue to improve operating cash use over the next several quarters. Total revenue in Q1 was $49.3 million, and of that net cannabis, revenue was $46 million, compared to $50.2 million last quarter. This change was driven mainly by timing of shipments into Australia during the prior quarter and our ongoing strategic focus in our Canadian medical business on the higher margin insured patient base. It was partially offset by contributions from our Thrive acquisition to our consumer cannabis business.
So now, let me address each of our segments in a bit more detail. At the core of our plan to achieve near-term positive EBITDA is our focus on protecting and growing the profitability of our industry-leading Canadian and international medical cannabis businesses. Canadian medical revenue was $23.4 million in Q1, down 6% from Q4. We continue to focus on growing the bottom line of this business by improving our portfolio, protecting our margins, and becoming a more efficient provider of medical cannabis to our patients.
Our international medical revenue was $8.2 million and reflects the 30% decline versus Q4. The sequential decrease was due to the timing of shipments into certain international markets, particularly Australia, during the prior quarter. We do expect a rebound in our international medical segment next quarter, that being Q2, returning to levels more consistent with Q4 of 2022. Taken together, our medical businesses in Canada and internationally generated $31.6 million in sales and a gross margin of 67%, up from 62% in the prior quarter.
The strong margin profile remains above our minimum target of 60% and is an important gross profit driver for us that distinguishes Aurora from our key competitors. In Q1, our consumer revenue was $13.7 million, a 9% increase compared to last quarter. The increase is mostly due to full quarter of contributions from Thrive consumer cannabis brands, which more than offset the impact of the cyberattack at the Ontario Cannabis store and store closures due to an employee strike at B.C. cannabis stores.
This is the second consecutive quarter of growth in our consumer business, which in the face of consumer market headwinds is very gratifying. Adjusted gross margin before fair value adjustments on our consumer cannabis net revenue is 25% in Q1 compared to 26% in the prior quarter. We recognized $3.3 million in net revenue during Q1 from our controlling stake in Bevo. As Miguel mentioned, Bevo has a seasonal cadence with a period from January to June expected to deliver roughly two-thirds of Bevo's full annual revenue and EBITDA, which is reliable, predictable, and support to our overall drive to positive EBITDA.
Excluding restructuring and other normalizing costs of $10.4 million, our SG&A and R&D continued to be well controlled, down at $33.4 million during Q1 versus $37.8 million in the prior quarter, and in line with our previously stated range of being below $35 million. We are on track to deliver the company's commitment to reducing SG&A to below $30 million by the time we exit December 2022. So, pulling all of this together, we generated an adjusted EBITDA loss in Q1 of $8.7 million, compared to $11.6 million in the previous quarter. This improvement is driven mostly by reductions in SG&A and by a 3% increase in overall adjusted gross margin.
Now, as part of our business transformation plan, you are aware of our commitment to annualized cash cost savings of $150 million to $170 million. Beyond posting positive adjusted EBITDA, we have been working hard to rationalize our operations footprint and continue to improve our cash flow. These actions are on track with annualized savings of $140 million already achieved and the remaining coming in Q2. With respect to cost of goods, these have been crucial initiatives for the company, as you can see our gross margins continue to deliver value for us and to lead the industry.
Finally, a quick reminder on an important housekeeping item, fiscal year 2023 has only three quarters as we're changing our fiscal year end to March 31, 2023, in order to achieve certain internal cost and staffing efficiencies. So, to wrap my section up, the key drivers for Aurora to reach our positive adjusted EBITDA milestone by the end of this calendar year, starting from our Q1 loss of $8.7 million are as follows: first, we expect revenues to recover in Q2 as the negative impact of certain cultivar supply and wholesale distribution disruptions affecting our European medical and Canadian consumer business units have been resolved, and our non-new international segment revenue returns to normalized levels consistent with that of Q4 2022. Second, we expect a full quarter of revenue and positive adjusted EBITDA contributions from the Bevo business, albeit on a seasonally affected basis. Third, we expect adjusted gross margins to be consistent with fiscal Q1 2023.
And finally, we expect to achieve our previously stated objective of quarterly SG&A expenses being below $30 million. So, thanks for your interest. I'll now turn the call back to Miguel.
Miguel Martin -- Chief Executive Officer
Thanks, Glen. I'm going to leave me with four thoughts before taking your questions. First, we're just one quarter away from achieving our goal of positive adjusted EBITDA. Cost savings are nearly complete and going forward we'll have a lean and flexible operating model.
Second, our medical cannabis business is a formidable force in the industry, both domestically and internationally. It remains the smartest cannabis segment to invest behind today with excellent growth opportunities. Third, the Canadian rec market is correcting, and the two acquisitions we've made in Thrive and Bevo will be even more beneficial to us, once the recovery is upon us. And last, our science and innovation program as a high-margin opportunity is just starting, and we look forward to sharing more in the future as the business grows.
To conclude, we're well on our way to becoming a leader in global cannabis and are making strategic progress to that end with each passing quarter. Our completion of the business transformation is near, on time and on budget, and we've done it without sacrificing our investments in growth. We've also done this while strengthening our balance sheet, which is critical in today's environment. The end result will be a positive and sustainable structural change to our business that will enable us to be successful in the long term and create significant shareholder value.
Thank you for your time and interest in Aurora, and we look forward to sharing our progress. We'll now be happy to take your questions. Operator, please open the line for questions.
Questions & Answers:
Operator
Thank you. We will now be conducting a question-and-answer session. [Operator instructions] We ask that you please limit yourself to one question only, and if you have a follow-up, please reenter the queue. One moment, please, while we poll for questions.
Our first question comes from the line of Vivien Azer with Cowen. Please proceed with your question.
Vivien Azer -- Cowen and Company -- Analyst
Thank you. Good evening.
Miguel Martin -- Chief Executive Officer
Good evening, Vivien.
Vivien Azer -- Cowen and Company -- Analyst
So, I wanted to touch on Europe, please. So, you guys have been really transparent about your expectations for fiscal 2Q and why you're expecting a recovery, and it all makes sense. But Miguel, I was just hoping to get some perspective on how you view that business's defensibility in a more challenged macro environment, certainly, through kind of traditional consumer staples earnings, European weakness, especially the further east you go has been incredibly topical. So, I'd just love to get your perspective on that.
Thanks.
Miguel Martin -- Chief Executive Officer
It's a great question, Vivien. I think if you look at Canada as an example, you've got over 250, 300 LPs that compete in the rec business, and we got a bunch of people that are facing some tougher times. If you look at the medical business, it's very concentrated. And why I bring that up is because it's been going on for a long time.
So, we have a 24 share, which is the leader in Canadian medical by a mile, then you have 9%, which is the No. 2 company, and then it really falls off. And there's just not a lot of companies participating. When you look at Europe, and I think Germany is a really good example, you've got basically four companies, maybe five companies that do the vast majority of the business.
It's incredibly expensive to get in. It's incredibly challenging to continue to deliver. And the regulatory thresholds are significant. And so, there really is sort of a moat around medical.
And it's not just Germany, you see this in other markets, where it's a consolidated number of companies, it takes a very specific skill set. And what is interesting that is starting to really come to the forefront now is that that challenge, that difficulty is portable. So, the best example I can give is if you look at the framework presented by Karl Lauterbach, who is sort of the federal minister of health in Germany, that's now going through the E.U., you just saw that Czech Republic, which is another great market and a really good market for us, talk about wanting to mirror or just get the learnings from the German experience. And so, I think you're going to start to see consistency in these markets from a regulation standpoint, everything from manufacturing, to testing, to packaging, to sales and marketing.
And so, I think, while it's going to be challenging and it's going to be difficult, there's definitely going to be advantages for those handful of companies that are regulated -- really regulatory forward in those markets. So, I think that's why we're so thrilled about it. And I think we'll be competing against four or five companies, not 200 companies. Does that answer your question?
Vivien Azer -- Cowen and Company -- Analyst
It does. Thank you.
Miguel Martin -- Chief Executive Officer
Thank you.
Operator
And our next question comes from the line of Michael Lavery with Piper Sandler. Please proceed with your question.
Michael Lavery -- Piper Sandler -- Analyst
Thank you. Good evening.
Miguel Martin -- Chief Executive Officer
Good evening, Michael.
Michael Lavery -- Piper Sandler -- Analyst
I just wanted to come back to the profitability milestones, and you led with the revenue improvement, which makes perfect sense. Just curious if you could unpack that a little bit more, maybe a couple of things. One is how much maybe? Is it mix driven or operating leverage? Does it need to be a big number or just the right product? And how much visibility do you have on that? We're close to halfway through the quarter. Do you have a line of sight on forward bookings or some things that give you a sense of that being on track?
Miguel Martin -- Chief Executive Officer
Yeah. I mean, let me make a couple of comments, and then I'll turn it over to Glen. I mean, I'm not going to give comments about the quarter, but let me sort of add some color to what Glen mentioned. So, clearly, with 2x the margins in the medical business and in most cases the international business, those revenues make a huge difference.
And so, when you have sort of these one-time ebbs and flows in a key market like Australia and you get it back, it makes a really big difference. Because it's almost entirely upside because you've already grown the cannabis and you don't have increased sort of fixed costs for it. So, that's one. Secondly, we're really thrilled that the OCS -- and I don't wish the cyberattack on anyone, but they addressed it quickly, and the same thing with the B.C.
strike. So, I'll let you take our comments about that and where we are in the quarter sort of bear. From the cost side, I think we've been pretty consistent in terms of that. So, not to rehash Glen's words, but if you go back to where we think we should be on revenue and you look at the margin and then you add Bevo, you're there.
And I think the part that is sort of powerful about all this is we get there in the model that can grow and has future growth opportunities, and whether that's Western Europe or some other aspects that will be there. So, I think when you describe mix, I would say it's more business mix than it is say product mix. But Glen, anything you want to add to that?
Glen Ibbott -- Chief Financial Officer
No, that's exactly right, Miguel. The cost reductions and the SG&A that we committed to and a bit of incremental Bevo cuts the Q1 EBITDA loss in half. So, the rest of this is coming from holding our margins up and then the business or market mix and with it being mainly focused on medical, a lot of that drops to the bottom line. So that's --
Miguel Martin -- Chief Executive Officer
And Michael, I guess the point is we're not saying it goes beyond where it's been in the past. So, the comment of getting back to traditional levels in those two key businesses, I think, is why we're saying what we're saying. There's not some great promise of a new piece of business or some additional form of growth.
Michael Lavery -- Piper Sandler -- Analyst
That's great. Helpful color. Thank you.
Miguel Martin -- Chief Executive Officer
Thank you, Michael.
Operator
And our next question comes from the line of Pablo Zuanic with Cantor Fitzgerald. Please proceed with your question.
Pablo Zuanic -- Cantor Fitzgerald -- Analyst
Thank you. Good evening. Hi, everyone. Two quick questions.
Two-part question if I can, Miguel. First, I think you're one of the few companies that has tied to this view that Germany will start only with domestic production and that the imports won't be allowed. And obviously the draft -- that's what the draft says. But most other companies are talking that imports will be needed because domestic production won't be enough.
So, maybe if you can just explain your point of view, which seems to be in the minority. Most of the companies expect the imports from day one. And then the second part to the equation is that in the event that the regulator only allows domestic production, how long will it take you to ramp up, I don't know, a greenhouse or production to supply the market? When would you need to start investing? And are we looking at a one-year or two-year time frame? Thank you.
Miguel Martin -- Chief Executive Officer
You got it. So, I think our position on Germany is led by having significant resources on the ground. We have full time people there. We have a tremendous government relations organization.
And we've been consistent in that opinion. And I'm not here to disparage any of my competitors because I really -- that's not my place. But we've been very consistent that for medical cannabis, in that part of the world, in Germany, particularly, you'd be able to import; for recreational cannabis, whether it was around the UN convention or a variety of other two-party agreements, there's just did not seem to be a pathway for that. And as one of only three companies that are currently producing cannabis in market under a medical license, we're very close to the regulators, and we have incredible respect.
So, going back to what we've seen, and this is me referencing what Mr. Lauterbach said, he's the health minister. What they're really talking about is that they are going to have a science-based integrated framework. And I give them a lot of credit.
They're talking to regulators across the world in different markets. They're talking to a variety of people. And they are talking to industry to get sort of this consolidated opinion. And I would not lose the topic that what's happening with rec is not also --- is not taking away from what's happening in the medical channel, there's also enhancements being made to that critical medical channel.
So, what are the key elements of this? And what did he say? Possession up to 30 grams, no limit on THC, which is a really important piece, potential limits for those under 21, cannabis tax being applied on TH content. The aim of the final consumer price, try to keep that close to the black market to create that attraction. Clearly, there'll be advertising and sales and marketing prohibitions. And at least in the initial draft, edibles are not allowed, and as you mentioned, Pablo, so clearly, domestic production.
And they've been very interested in understanding what's that clear regulatory framework around quality, security, and production standards to still be there. I would also mention they've been very proactive in getting the feedback from the EU. And that doesn't happen in a vacuum. We're thrilled about that type of process.
They have such a critical country, then go to the EU. And as I mentioned in my other comments, having the Czech Republic be looking toward Germany and trying to, in some cases, mimic or mirror those learnings, has to indicate that you're going to see consistency in these regulations. So, that's sort of the general overview, more to follow. We're thrilled with what we've seen so far.
In terms of timing, depending on the magnitude of the facility, Pablo, you're talking about a year and a half to two years from the moment you say go and write the check and have these items be at that high quality. They're aware of that. The regulators clearly are aware of that. And there's been some tremendous, I would say, conversation back and forth about the realities of what that looks like.
And we'll continue to be respectful of that. We're thrilled to be in market. But Germany is going to be a really important bellwether country in a lot of different ways. And I would encourage folks to stay close to it.
Operator
And our next question comes from the line of Andrew Carter with Stifel. Please proceed with your question.
Andrew Carter -- Stifel Financial Corp. -- Analyst
Hey. Yeah, thanks. I guess I wanted to ask that Canadian consumer came in well ahead of our estimate, or well ahead of what we were thinking. And I guess, you guys have kind of a tepid guide around the disruptions, yet sequential growth.
First off, can you tell us how much Greybeard contributed? And also, maybe disaggregate the performances by channel. Quebec's been strong, love to hear that. And of course, the Headset data says you were down 13% POS. Of course, could be backwards looking if things are just working their way through.
So maybe also give us an aggregate of what shipments were outside of Quebec. Thank you.
Miguel Martin -- Chief Executive Officer
Let me make a comment about I guess Headset problems, first, then I'll kick it over to Glen on the rest of the question. Quebec is our largest province in terms of shipments. We really value our partnerships with all the provinces, but Quebec has been particularly good for us. As you know, Andrew, many of the syndicated services do not include Quebec and the province on stores.
And so, it does skew the results a bit, particularly for us as someone who does the majority of their business in there. I think, Greybeard was a significant contributor but also, we've had successes on two fronts that has helped us. One is our significant improvements in yield has allowed us to go back into some of the, say, larger format sizes, that now makes sense for us in a way that they didn't make sense for us before. And we're also participating at a much higher level in some of the faster-growing, higher-margin segments, such as pre-rolls and concentrates.
Glen, do you want to take the rest of it?
Glen Ibbott -- Chief Financial Officer
Yeah. Greybeard and the Thrive brands are important brands to us. But they are our premium brands. So, they don't drive a ton of revenue.
I'd say they're probably in the 15% range this quarter and certainly growing, but margin-wise, they're very important to us. As Miguel mentioned, the provincial distribution, that actually drives a lot of our bottom line, heading into the right provinces and the right products, and with the distribution, say Quebec offers you with the distribution in all the stores. The provincial mix is as important as the product mix to us on our bottom line. So, I think it continues to be an important market for us.
Ontario's got a very big revenue market. But I'd say, we certainly are choosy on what products we launch in Ontario to make sure that we continue to have that focus on protecting our margins and being able to drive the profitability.
Andrew Carter -- Stifel Financial Corp. -- Analyst
Just clarifying in there, you said getting back into large formats. Does that mean -- which I thought the focus was 100% premium. Is it just the lower cost structure allows you to do that? I just wanted to make sure and clarify that comment.
Miguel Martin -- Chief Executive Officer
Yeah. So, we -- particularly on discounting and value, we got out of spots where 14 grams and 28 grams just didn't make any sense. And what we -- because of the cost structure that we had with this -- with the enhanced genetics, and in some cases, getting 2x the yield per square meter, it allows you to go back into some of that. And then you covered about an idea of the growth of 28-gram, and some of those larger formats have been pretty significant.
So, you can get in there and actually make some money on it. It's a win from a revenue standpoint. The other point I guess I would make is the fragmentation and whether we're at the bottom or not, you've got the top five companies that right now are, I don't know, 36% of the business, and last year there were 48%. So, there is a lot of consumer movement, Andrew, which I know you know.
But so, when you come out with new things like we have, the environment is pretty ripe to make some quick gains. And so, we've been pretty pleased with that, outside of Greybeard.
Operator
Thank you. And our next question comes from the line of John Zamparo with CIBC. Please proceed with your question.
John Zamparo -- CIBC Capital Markets -- Analyst
Thanks. Good evening. I also wanted to touch on the consumer channel but on gross margins. And you've repositioned into premium and you've added Thrive but adjusted margins are down sequentially and year over year.
Is that mostly a function of volume and you just need to increase that to get higher margins? I know the press release mentioned packaging costs, but is there any other color you can add there? Thanks.
Miguel Martin -- Chief Executive Officer
Yeah. I mean, John, as you know, the rec business is really challenging right now. And so, the pricing continues to drop. So, the macro environment makes it a challenge.
You've talked about packaging. There are other sort of inputs on the inflation side that push down the margin a little bit. Clearly, utilization and spreading the fix across does make a difference. We are seeing some opportunities, as I said in my prepared remarks, leveraging common infrastructure for rec and medical that we think will have some margin.
But I think the margin in the rec business overall is going to be under pressure. As sort of we look forward, we've been able to find spots where we've been able to keep it at where it's at through a little bit of mix, to Glen's point, a little bit of geography and a little bit of introduction of new products, particularly premium products. But overall, I think for most manufacturers, you're going to be dealing with a challenging pricing environment in the meantime. Now, you make a big move on yield, you make a big move on something in a pre-roll or in a concentrate or in a premium or ultra-premium flower, you can make a move there.
But I think overall, I think, it's a little bit of the environmental catching up. But yeah, clearly if you improve your overall production and you move through the fixed cost, you're going to improve your margin. I mean, Glen, I don't know, anything you want to add on margin and rec?
Glen Ibbott -- Chief Financial Officer
Yeah. John, that's a great question. You're exactly right. So, I mean, what we see in contribution margin so that incremental margin on the next unit of sales is quite compelling.
So, I think there is a volume there and that's why it's nice to see us kind of getting a little bit of stability and even a bit of growth in the consumer channel. So, as we do -- and we've got some exciting new products that have dropped recently and that we're seeing nice pickup across some of the provinces. So, I'm excited to see what that does in terms of margins. Lots of headwinds as Miguel said, lots -- but at least we've got some levers we're trying to protect and maybe even grow some of those margins with a bit of volume.
Operator
Thank you. And our next question comes from the line of Matt Bottomley with Canaccord Genuity. Please proceed with your question.
Matt Bottomley -- Canaccord Genuity -- Analyst
All right. Good evening, everyone. Just wanted to take a step back just on the Canadian medical market, that side of the business. I think we chatted Miguel about this a couple of quarters ago.
But just given that this has essentially been a $100 million business for some time now, and I understand there's some strategy, and going after margin on insured patients versus just trying to grow the top line for the sake of it. But I'm just curious if there's any other variables or elements other than insurability that might drive the overall industry growth and then if Aurora can keep its 25% share to see the commensurate growth with that. Is it just insurance or there's anything that you guys can do that's in your control in the interim to try and help that? And then maybe another side of that question, just also related to just sort of the doctor acceptance or doctor uptake. Are we seeing more doctors prescribe cannabis? Where is sort of that segment of the market in terms of where the medical professionals are at? Really no other LP talks about this line of the segment, just given that most are focused on other things, or adult use.
So, I think just a lay of the land might be helpful.
Miguel Martin -- Chief Executive Officer
Sure, I'd be happy to. Right now, when you look at the Canadian medical business, you got 1% of the Canadian adult population that participates in it. And if you're looking for drivers of it, first and foremost, because the margin is so compelling, compared to rec, not compared to pharma or traditional sort of forms of medical, you get a lot of folks playing around it. And as I mentioned, it's a pretty consolidated piece of business.
So, what are the aspects that will improve the overall medical business? Well, first and foremost, I would remind people how early we are in this. And for most clinicians, physicians, and patients, clinical research and efficacy and the real science behind medical cannabis is just coming online. And so, we've been honored to participate in some clinical research, you've seen stuff in U.S., you're seeing a ton of stuff in Israel. And as that comes online, you're going to really start to change the equation for all the key stakeholders, everything from the insurance companies, to the clinician, to the patient around that.
And some of the stuff that's coming out is pretty compelling around some of the traditional use cases that you see around medical cannabis, whether that's anxiety, or sleep, or PTSD, or neuropathy, or whatever those things may be. So, that's a very important driver. I think the next driver is that you're starting to see some of the insurance companies and the private companies and those that have coverage, bringing cannabis coverage into the -- more into the mainstream in terms of the benefits program, up to including companies like ours that have direct billing, and that really makes a big difference. And obviously, some of these large union contracts make a lot of noise in terms of how they're coming online.
And I think third, Matt, is this general sort of increasing acceptance around cannabinoids and their use beyond things like Epidiolex, and you're really starting to see that come to the forefront. And that definitely changes the overall equation. When you only have 1% of the adult population receiving that benefit, any sort of movement makes a massive difference, and I think the benefits will be outsized to a very small subset of companies that participate in it. And it's a very expensive program.
And it takes an incredible amount of work and nuance and effort to support patients and insured patients, and obviously, the veteran patients who we owe so much to. So, I think in all of that, as people try to model what this is, it's going to grow. It's going to become more mainstream. It's going to become more clinical.
It's going to become more science driven. And the benefits will fall down to a small group of companies. And that sort of progression is portable. The German regulators are deeply interested in the science and in the history of what's happening in the Canadian medical experience, same thing with France, U.K,.
Israel, and on and on and on. So, it really is a global network and a global sort of lineup. And I think for companies like us, we're going to continue to participate in those, and hopefully, that alignment allows us to be able to respectfully and responsibly work with the regulators. And so, we're very bullish on medical cannabis -- true medical cannabis, not what you may have seen in certain markets.
And I think if you look at the overall global numbers on medical cannabis, even being conservatively, while it's hard on our market by market, but the overall growth on it is quite significant. Did I answer your question, Matt?
Matt Bottomley -- Canaccord Genuity -- Analyst
Great. And actually, not to try and put another second question, but just on what you were saying, curious in terms of the patients that are onboarding in the Canadian market. Is there any element of obviously, if it's insured, that's different, but for people that aren't insured, is there any element of them joining the medical market? Obviously, there's some friction with registering with LPs and things that aren't really typical in a lot of industries. But once they ship in order or two, do they then just go and know the products they like, and then just for the sake of ease go to their local dispensary? I know, in Ontario, there's one on every corner now.
So, is that part of the dynamic that's making it hard to ramp up patients in the country?
Miguel Martin -- Chief Executive Officer
No, I wouldn't say so. I mean, there has clearly been some interaction with the medical market to the evolution of the rec market. But this, I think, is maybe where in certain markets this gets misconstrued. This is primarily a conversation that a patient has with a clinician or a physician, or an advisor to go get medicine.
And so, obviously, from an insurance standpoint, there's no economic advantage to go into the rec. But for the vast majority of the patients we interact with, this is a medical aspect and medical case that is connected to a physician or a clinician or an advisor. And that interaction in the same way you would have with, others form of medications, this doesn't lend itself to that. Now, maybe an uninsured patient that finds something and sees some other reason to go get there.
But when you're talking about people that are overindexing on things like capsules and oils and other things that maybe aren't the sort of the flavor of the day and the rec business, you really find this as truly a medical construct and the medical infrastructure that lends itself to that more so, then just a surrogate for rec use.
Operator
Thank you. And the next question comes from the line of Frederico Gomes with ATB Capital. Please proceed with your question.
Frederico Gomes -- ATB Capital Markets -- Analyst
Hi. Good evening. Thanks for taking my question. Just on the Netherlands, could you provide an update on your investment there? And I know that you've talked a lot about Germany.
But how do you view the opportunity in the Netherlands? And potentially in terms of timelines, when can we expect sales from that project to start? Thank you.
Miguel Martin -- Chief Executive Officer
You got it, Fred. So, in the Netherlands, there are two aspects of it. There's the medical aspect that we continue to participate in where the government is reviewing products and will make a final assessment probably in May or June of next year about that is. From the rec standpoint, there really isn't an update for us.
We're still waiting to hear about a firm date and what is the process. And there have been general details for those 10 licensees to service roughly 500 coffee shops in a variety of towns and cities throughout the country that would give everybody the opportunity to look at everything from data to service levels and whatnot. So, I don't really have an update for you right now. At the time in which we have one, we'll give it, but we're still waiting for some information on exactly what it's going to be, and when it's going to kick off, and exactly what that all looks like.
But to be clear, the information that we've seen previously has been -- there would be a test for those 10 licensees, and I know, Fred, you're well aware of how that all worked out, and then post that test after an undetermined period of time, they would then talk about a different construct.
Operator
Thank you. And the next question comes from the line of Tamy Chen with BMO Capital Markets. Please proceed with your question.
Tamy Chen -- BMO Capital Markets -- Analyst
Hi. Thanks for taking my question. I was just curious, in terms of inventory impairments, when do you expect that will kind of get through past that? Because I know you've had Sky shutting down and all of that. So, I'm just wondering when we get past that and don't really see more of the impairments going forward.
Thank you.
Miguel Martin -- Chief Executive Officer
Glen?
Glen Ibbott -- Chief Financial Officer
Yeah, sure. I'll take that. Tamy, thanks for the question. There's a few things going on here.
One under IFRS, as I'm sure you're aware, there's a biological asset standard that ends up with some fair values in our inventory that when you have to write things down to net realizable value, at the end of the day, there's an ongoing sort of noise quarter to quarter of just provisioning down to realizable value on your inventory. But more to the point, a lot of the footprint rationalization that we've done with our production facilities are to get us to a better spot, where we are producing high quality, low cost, and very focused on what the consumer wants and minimizing excess production. Now, it is an agricultural crop and certainly, in the consumer markets, we do find the consumer taste do evolve. So, it's never going to be perfect, I think, in terms of alignment.
We think we would expect that there would always be some, hopefully, small percentage of inventory that ages out a little bit. Now, what we do find though is that we're developing more and more channels for our cannabis. So, it may fit the rec market in Canada. It may fit the medical market in Canada.
It may be excellent of an export product to another medical jurisdiction. Even within those international medical jurisdictions, we're starting to develop different tiers of product and what we call a premium and value. So, two things that we can do here is continue to rationalize our production footprint and really focus on producing high-quality cannabis and to continue to develop more and more channels for outlet of that cannabis. So, we expect it to improve over time, Tamy, but being agricultural, there will always be a little bit of noise in the inventory.
Operator
Thank you. There are no further questions at this time. And I would like to turn the floor back over to Miguel for any closing remarks.
Miguel Martin -- Chief Executive Officer
Well, I appreciate everybody's interest in our business and in this quarter. We're thrilled about where we're at and we're looking forward to the next call. And we look forward to having the conversations with many of you. So, I wish everyone a safe -- and for those that are celebrating Remembrance Day tomorrow, which is obviously an important day for everyone, we have well-wishes on that.
But thanks to all. And we look forward to talking to you in the future. All the best.
Operator
[Operator signoff]
Duration: 0 minutes
Call participants:
Ananth Krishnan -- Vice President, Strategic Finance
Miguel Martin -- Chief Executive Officer
Glen Ibbott -- Chief Financial Officer
Vivien Azer -- Cowen and Company -- Analyst
Michael Lavery -- Piper Sandler -- Analyst
Pablo Zuanic -- Cantor Fitzgerald -- Analyst
Andrew Carter -- Stifel Financial Corp. -- Analyst
John Zamparo -- CIBC Capital Markets -- Analyst
Matt Bottomley -- Canaccord Genuity -- Analyst
Frederico Gomes -- ATB Capital Markets -- Analyst
Tamy Chen -- BMO Capital Markets -- Analyst
More ACB analysis
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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis Inc. (NASDAQ: ACB) Q1 2023 Earnings Call Nov 10, 2022, 5:00 p.m. Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Strategic Finance Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst John Zamparo -- CIBC Capital Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. After internal assessment, as well as discussions with our distribution partner, we decided to continue participating as the sole supplier of dried flower to the country to ensure Aurora's position for success following the French pilot. | Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Strategic Finance Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst John Zamparo -- CIBC Capital Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Aurora Cannabis Inc. (NASDAQ: ACB) Q1 2023 Earnings Call Nov 10, 2022, 5:00 p.m. This change was driven mainly by timing of shipments into Australia during the prior quarter and our ongoing strategic focus in our Canadian medical business on the higher margin insured patient base. | Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Strategic Finance Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst John Zamparo -- CIBC Capital Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Aurora Cannabis Inc. (NASDAQ: ACB) Q1 2023 Earnings Call Nov 10, 2022, 5:00 p.m. So, to wrap my section up, the key drivers for Aurora to reach our positive adjusted EBITDA milestone by the end of this calendar year, starting from our Q1 loss of $8.7 million are as follows: first, we expect revenues to recover in Q2 as the negative impact of certain cultivar supply and wholesale distribution disruptions affecting our European medical and Canadian consumer business units have been resolved, and our non-new international segment revenue returns to normalized levels consistent with that of Q4 2022. | Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Strategic Finance Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst John Zamparo -- CIBC Capital Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Aurora Cannabis Inc. (NASDAQ: ACB) Q1 2023 Earnings Call Nov 10, 2022, 5:00 p.m. Canadian medical revenue was $23.4 million in Q1, down 6% from Q4. |
36453.0 | 2022-11-10 00:00:00 UTC | Aurora Cannabis Inc. (ACB) Reports Q1 Loss, Misses Revenue Estimates | ACB | https://www.nasdaq.com/articles/aurora-cannabis-inc.-acb-reports-q1-loss-misses-revenue-estimates-0 | nan | nan | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.09. This compares to loss of $0.09 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 11.11%. A quarter ago, it was expected that this company would post a loss of $0.12 per share when it actually produced a loss of $0.08, delivering a surprise of 33.33%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $37.77 million for the quarter ended September 2022, missing the Zacks Consensus Estimate by 2.78%. This compares to year-ago revenues of $47.74 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Aurora Cannabis Inc. Shares have lost about 77.6% since the beginning of the year versus the S&P 500's decline of -21.4%.
What's Next for Aurora Cannabis Inc.
While Aurora Cannabis Inc. Has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Aurora Cannabis Inc. Favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.08 on $42.22 million in revenues for the coming quarter and -$0.37 on $171.33 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Products is currently in the bottom 46% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, Lucira Health, Inc. (LHDX), has yet to report results for the quarter ended September 2022. The results are expected to be released on November 14.
This company is expected to post quarterly loss of $0.38 per share in its upcoming report, which represents a year-over-year change of +19.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Lucira Health, Inc.'s revenues are expected to be $33.3 million, up 122.3% from the year-ago quarter.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.09. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. | Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.09. Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $37.77 million for the quarter ended September 2022, missing the Zacks Consensus Estimate by 2.78%. | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.09. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $37.77 million for the quarter ended September 2022, missing the Zacks Consensus Estimate by 2.78%. | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.09. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report The company has topped consensus revenue estimates two times over the last four quarters. |
36454.0 | 2022-11-10 00:00:00 UTC | Why Shares of Aurora Cannabis, Canopy Growth, and Tilray Are Glowing Green Today | ACB | https://www.nasdaq.com/articles/why-shares-of-aurora-cannabis-canopy-growth-and-tilray-are-glowing-green-today | nan | nan | What happened
Canadian marijuana stocks are having a moment in the sun today. Shares of Aurora Cannabis (NASDAQ: ACB) are up by a healthy 7.4%, while Canopy Growth (NASDAQ: CGC) stock is higher by 14.3%, and Tilray Brands' (NASDAQ: TLRY) equity is in the green by 5.6%, as of 12:35 p.m. ET Thursday.
What's causing this industrywide move higher? These beaten-down Canadian marijuana stocks appear to be getting a lift from today's news that inflation seems to be tapering off. The U.S. Labor Department announced this morning that the Cosumer Price Index (CPI) increased by 7.7% in October relative to the same month a year ago, which represents the smallest rise in the CPI so far this year.
So what
Why are Aurora Cannabis, Canopy Growth, and Tilray responding this positive macroeconomic news? While the link is far from direct, slowing inflation might spur the Federal Reserve to dial back its policy of aggressive interest rate hikes. That's key for speculative growth stocks like Aurora, Canopy, and Tilray.
The reason is that investors have shied away from risky equities all year long due to the threat of hefty rate hikes in 2023. So, if the Federal Reserve decides to pivot on this seminal issue, some investors might be willing to up their appetite for risk -- which would be a boon for high-risk, high-reward cannabis stocks like Aurora, Canopy, and Tilray.
Now what
Are any of these Canadian cannabis equities a buy right now? If investor sentiment becomes more bullish, I think the shares of Aurora, Canopy, and Tilray will all rebound to some degree. After all, the stock prices of these Canadian cannabis giants have gotten absolutely trounced this year, with each company losing well over 40% of its value through the first 11 months of 2022. In short, Aurora, Canopy, and Tilray may have fallen too far, too fast this year.
That being said, Tilray is probably the best buy of the bunch from an investing standpoint. Tilray's competitive advantages in key international markets like Germany ought to deliver enormous benefits for shareholders in the coming months. What's more, the company recently inked a new partnership deal with Charlotte's Web, deepening its ties to the high-value U.S. cannabis market. Canopy and Aurora, on the other hand, still have quite a bit of work to do to solidify their long-term value propositions.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Aurora Cannabis (NASDAQ: ACB) are up by a healthy 7.4%, while Canopy Growth (NASDAQ: CGC) stock is higher by 14.3%, and Tilray Brands' (NASDAQ: TLRY) equity is in the green by 5.6%, as of 12:35 p.m. While the link is far from direct, slowing inflation might spur the Federal Reserve to dial back its policy of aggressive interest rate hikes. So, if the Federal Reserve decides to pivot on this seminal issue, some investors might be willing to up their appetite for risk -- which would be a boon for high-risk, high-reward cannabis stocks like Aurora, Canopy, and Tilray. | Shares of Aurora Cannabis (NASDAQ: ACB) are up by a healthy 7.4%, while Canopy Growth (NASDAQ: CGC) stock is higher by 14.3%, and Tilray Brands' (NASDAQ: TLRY) equity is in the green by 5.6%, as of 12:35 p.m. So what Why are Aurora Cannabis, Canopy Growth, and Tilray responding this positive macroeconomic news? That's key for speculative growth stocks like Aurora, Canopy, and Tilray. | Shares of Aurora Cannabis (NASDAQ: ACB) are up by a healthy 7.4%, while Canopy Growth (NASDAQ: CGC) stock is higher by 14.3%, and Tilray Brands' (NASDAQ: TLRY) equity is in the green by 5.6%, as of 12:35 p.m. So, if the Federal Reserve decides to pivot on this seminal issue, some investors might be willing to up their appetite for risk -- which would be a boon for high-risk, high-reward cannabis stocks like Aurora, Canopy, and Tilray. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | Shares of Aurora Cannabis (NASDAQ: ACB) are up by a healthy 7.4%, while Canopy Growth (NASDAQ: CGC) stock is higher by 14.3%, and Tilray Brands' (NASDAQ: TLRY) equity is in the green by 5.6%, as of 12:35 p.m. So what Why are Aurora Cannabis, Canopy Growth, and Tilray responding this positive macroeconomic news? That's key for speculative growth stocks like Aurora, Canopy, and Tilray. |
36455.0 | 2022-11-09 00:00:00 UTC | Why Canopy Growth Moved Higher Today, but Other Marijuana Stocks Fell | ACB | https://www.nasdaq.com/articles/why-canopy-growth-moved-higher-today-but-other-marijuana-stocks-fell | nan | nan | What happened
Marijuana investors are having a mixed morning Wednesday, as shares of Canopy Growth (NASDAQ: CGC) move 2.8% higher after reporting what management called a "key inflection point" fiscal Q2 2023 earnings report -- but Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) tumbled. Canopy this morning reported that its Q2 revenues declined 10% year over year to $117.9 million Canadian dollars.
After initially shooting higher on potentially positive news from the 2022 midterm elections and reports of "momentum" at Canopy, both Aurora and Tilray are back in the red as we approach the noon mark -- down about 2.6% and 3.2%, respectively, as of 11:40 a.m. ET.
So what
Canopy blamed the divestiture of a German subsidiary (and the consequent loss of its revenues), plus "increased competition in the Canadian adult-use cannabis market" for its sales decline in Q2 (but said the divestiture had the greatest impact). The logical implication of that statement, therefore, is that "increased competition" doesn't necessarily mean that Aurora and Tilray took business away from Canopy Growth in the quarter -- which helps to explain why Canopy stock is up today ... and why Aurora and Tilray are down.
Better news for all players in the cannabis industry is that Canopy returned to generating positive gross margins in the quarter -- albeit only 3% -- while the company was able to hold selling, general, and administrative expenses flat.
Now what
On balance, though, it still wasn't a great quarter for Canopy Growth, because as sales declined, the only things really growing at Canopy were its losses. Net loss for the quarter was CA$232 million -- 14 times what the company lost a year ago. Free cash flow for the quarter was -$135 million -- a 34% increase in the rate of cash burn versus the year-ago quarter.
Despite the awful numbers, Canopy CEO David Klein insisted that Canopy has reached an "inflection point" and has "momentum across our key businesses and accelerating our entry into the U.S. cannabis market." Personally, though, I don't see any momentum at all -- except in a downwards direction -- in these numbers.
Although I suppose there's a chance that if federal marijuana legalization comes to be in the U.S., this will turn things around for Canopy (although it certainly hasn't done that for them in Canada yet), I have to say that as things stand at present, the future looks bleak for Canopy Growth. As more investors realize that, I expect we'll see Canopy Growth stock reverse course and follow Aurora Cannabis and Tilray lower.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Marijuana investors are having a mixed morning Wednesday, as shares of Canopy Growth (NASDAQ: CGC) move 2.8% higher after reporting what management called a "key inflection point" fiscal Q2 2023 earnings report -- but Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) tumbled. After initially shooting higher on potentially positive news from the 2022 midterm elections and reports of "momentum" at Canopy, both Aurora and Tilray are back in the red as we approach the noon mark -- down about 2.6% and 3.2%, respectively, as of 11:40 a.m. Better news for all players in the cannabis industry is that Canopy returned to generating positive gross margins in the quarter -- albeit only 3% -- while the company was able to hold selling, general, and administrative expenses flat. | What happened Marijuana investors are having a mixed morning Wednesday, as shares of Canopy Growth (NASDAQ: CGC) move 2.8% higher after reporting what management called a "key inflection point" fiscal Q2 2023 earnings report -- but Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) tumbled. Canopy this morning reported that its Q2 revenues declined 10% year over year to $117.9 million Canadian dollars. The logical implication of that statement, therefore, is that "increased competition" doesn't necessarily mean that Aurora and Tilray took business away from Canopy Growth in the quarter -- which helps to explain why Canopy stock is up today ... and why Aurora and Tilray are down. | What happened Marijuana investors are having a mixed morning Wednesday, as shares of Canopy Growth (NASDAQ: CGC) move 2.8% higher after reporting what management called a "key inflection point" fiscal Q2 2023 earnings report -- but Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) tumbled. The logical implication of that statement, therefore, is that "increased competition" doesn't necessarily mean that Aurora and Tilray took business away from Canopy Growth in the quarter -- which helps to explain why Canopy stock is up today ... and why Aurora and Tilray are down. Now what On balance, though, it still wasn't a great quarter for Canopy Growth, because as sales declined, the only things really growing at Canopy were its losses. | What happened Marijuana investors are having a mixed morning Wednesday, as shares of Canopy Growth (NASDAQ: CGC) move 2.8% higher after reporting what management called a "key inflection point" fiscal Q2 2023 earnings report -- but Aurora Cannabis (NASDAQ: ACB) and Tilray Brands (NASDAQ: TLRY) tumbled. Now what On balance, though, it still wasn't a great quarter for Canopy Growth, because as sales declined, the only things really growing at Canopy were its losses. See the 10 stocks *Stock Advisor returns as of November 7, 2022 Rich Smith has no position in any of the stocks mentioned. |
36456.0 | 2022-11-07 00:00:00 UTC | Eagle Pharmaceuticals (EGRX) Q3 Earnings and Revenues Beat Estimates | ACB | https://www.nasdaq.com/articles/eagle-pharmaceuticals-egrx-q3-earnings-and-revenues-beat-estimates | nan | nan | Eagle Pharmaceuticals (EGRX) came out with quarterly earnings of $1.12 per share, beating the Zacks Consensus Estimate of $0.84 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 33.33%. A quarter ago, it was expected that this specialty pharmaceutical company would post earnings of $3.13 per share when it actually produced earnings of $1.56, delivering a surprise of -50.16%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Eagle Pharmaceuticals, which belongs to the Zacks Medical - Products industry, posted revenues of $65.9 million for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 11.01%. This compares to year-ago revenues of $39.85 million. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Eagle Pharmaceuticals shares have lost about 38% since the beginning of the year versus the S&P 500's decline of -20.9%.
What's Next for Eagle Pharmaceuticals?
While Eagle Pharmaceuticals has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Eagle Pharmaceuticals: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.68 on $59.48 million in revenues for the coming quarter and $7.14 on $308.86 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Products is currently in the top 49% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Aurora Cannabis Inc. (ACB), is yet to report results for the quarter ended September 2022. The results are expected to be released on November 10.
This company is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Aurora Cannabis Inc.'s revenues are expected to be $38.85 million, down 18.6% from the year-ago quarter.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | One other stock from the same industry, Aurora Cannabis Inc. (ACB), is yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. | One other stock from the same industry, Aurora Cannabis Inc. (ACB), is yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Eagle Pharmaceuticals, which belongs to the Zacks Medical - Products industry, posted revenues of $65.9 million for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 11.01%. | One other stock from the same industry, Aurora Cannabis Inc. (ACB), is yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Eagle Pharmaceuticals (EGRX) came out with quarterly earnings of $1.12 per share, beating the Zacks Consensus Estimate of $0.84 per share. | One other stock from the same industry, Aurora Cannabis Inc. (ACB), is yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. |
36457.0 | 2022-11-03 00:00:00 UTC | MacroGenics (MGNX) Reports Q3 Loss, Tops Revenue Estimates | ACB | https://www.nasdaq.com/articles/macrogenics-mgnx-reports-q3-loss-tops-revenue-estimates | nan | nan | MacroGenics (MGNX) came out with a quarterly loss of $0.40 per share versus the Zacks Consensus Estimate of a loss of $0.49. This compares to loss of $0.86 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 18.37%. A quarter ago, it was expected that this biopharmaceutical company would post a loss of $0.97 per share when it actually produced a loss of $0.67, delivering a surprise of 30.93%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
MacroGenics, which belongs to the Zacks Medical - Products industry, posted revenues of $41.73 million for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 83.52%. This compares to year-ago revenues of $15.66 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
MacroGenics shares have lost about 69.8% since the beginning of the year versus the S&P 500's decline of -21.1%.
What's Next for MacroGenics?
While MacroGenics has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for MacroGenics: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.73 on $99.62 million in revenues for the coming quarter and -$1.77 on $179.1 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Products is currently in the bottom 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, Aurora Cannabis Inc. (ACB), has yet to report results for the quarter ended September 2022. The results are expected to be released on November 10.
This company is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Aurora Cannabis Inc.'s revenues are expected to be $38.85 million, down 18.6% from the year-ago quarter.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Another stock from the same industry, Aurora Cannabis Inc. (ACB), has yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. | Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Another stock from the same industry, Aurora Cannabis Inc. (ACB), has yet to report results for the quarter ended September 2022. MacroGenics, which belongs to the Zacks Medical - Products industry, posted revenues of $41.73 million for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 83.52%. | Another stock from the same industry, Aurora Cannabis Inc. (ACB), has yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report MacroGenics (MGNX) came out with a quarterly loss of $0.40 per share versus the Zacks Consensus Estimate of a loss of $0.49. | Another stock from the same industry, Aurora Cannabis Inc. (ACB), has yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report The company has topped consensus revenue estimates two times over the last four quarters. |
36458.0 | 2022-11-01 00:00:00 UTC | Why Marijuana Stocks Like Canopy Growth Fell Sharply Today | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-like-canopy-growth-fell-sharply-today | nan | nan | What happened
Well, that didn't last long.
After a nice rally for marijuana stocks on Monday, they found gravity again on Tuesday. Many of them tumbled during the trading session, including but certainly not limited to Canopy Growth (NASDAQ: CGC), Tilray Brands (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB), all of which suffered declines at around the 6% mark.
So what
Tuesday morning, industry website MJBizDaily.com published the somewhat discouraging results of a poll. These indicate that the five upcoming votes on U.S. state recreational marijuana legalization might not be as much of a slam-dunk success as ones in previous election cycles.
All told, five states are conducting a public vote on the matter on Election Day next Tuesday, Nov. 8: Maryland, Arkansas, Missouri, North Dakota, and South Dakota.
Opposition to Arkansas' measure, for example, seems to be building. According to the MJBizDaily poll, 43% of those surveyed were against it when asked in mid-October, well up from the 29% roughly one month earlier. Undecided respondents were about 6.5% of the total, pushing the combined opposed/undecided figure to nearly 50%.
Meanwhile, the latest polls for Missouri and South Dakota tipped over the 50% line, with an oppose/undecided total of 52% for the former, and 53% for the latter.
Now what
This might indicate a sharp turn from the results of 2020's Election Day, when voters in five other states overwhelmingly approved legalization measures.
Then again, the quintet up for a vote this cycle represents a more conservative clutch of states, so it shouldn't be so surprising that the for/against count is tighter. And even if just one or two have their measures ratified by the public, it'll put ever more pressure on lawmakers to decriminalize marijuana at the federal level. This of course would be beneficial for Canopy Growth, Tilray, Aurora, and their many peers.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Many of them tumbled during the trading session, including but certainly not limited to Canopy Growth (NASDAQ: CGC), Tilray Brands (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB), all of which suffered declines at around the 6% mark. These indicate that the five upcoming votes on U.S. state recreational marijuana legalization might not be as much of a slam-dunk success as ones in previous election cycles. Then again, the quintet up for a vote this cycle represents a more conservative clutch of states, so it shouldn't be so surprising that the for/against count is tighter. | Many of them tumbled during the trading session, including but certainly not limited to Canopy Growth (NASDAQ: CGC), Tilray Brands (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB), all of which suffered declines at around the 6% mark. These indicate that the five upcoming votes on U.S. state recreational marijuana legalization might not be as much of a slam-dunk success as ones in previous election cycles. All told, five states are conducting a public vote on the matter on Election Day next Tuesday, Nov. 8: Maryland, Arkansas, Missouri, North Dakota, and South Dakota. | Many of them tumbled during the trading session, including but certainly not limited to Canopy Growth (NASDAQ: CGC), Tilray Brands (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB), all of which suffered declines at around the 6% mark. All told, five states are conducting a public vote on the matter on Election Day next Tuesday, Nov. 8: Maryland, Arkansas, Missouri, North Dakota, and South Dakota. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | Many of them tumbled during the trading session, including but certainly not limited to Canopy Growth (NASDAQ: CGC), Tilray Brands (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB), all of which suffered declines at around the 6% mark. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. The Motley Fool has no position in any of the stocks mentioned. |
36459.0 | 2022-11-01 00:00:00 UTC | Where Will Aurora Cannabis Be in 1 Year? | ACB | https://www.nasdaq.com/articles/where-will-aurora-cannabis-be-in-1-year | nan | nan | Investing in companies that are in the midst of transformational changes implies high risks, but there's sometimes the promise of rich rewards too. On that note, Aurora Cannabis (NASDAQ: ACB) is a business amid a major transition, with its fortunes (and the fortunes of its investors) in flux in the short term.
With its shares free-falling by more than 97% over the last three years, it's possible that shareholders will soon get a reprieve, but it isn't guaranteed. Let's map out the cultivator's next 12 months to see what it's trying to do and whether it has a chance of getting there so that it's easier to make a judgment about whether to invest.
Near-term goals may be out of reach
Right now, Aurora's situation is tenuous.
Due to intentional production cuts and slack demand in the Canadian cannabis markets, its quarterly revenue fell by 8% year over year as of the fourth quarter, and the company is nowhere near profitable. While its leadership in the Canadian medical marijuana market is yielding some revenue growth, its position in the Canadian recreational market is eroding rapidly, with sales crumbling by 35% since the last three months of its 2021 fiscal year. If that trend continues, it'll be hard to reestablish its market share down the line.
In terms of its efficiency, Management predicts that the business will reach a positive adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) run rate by the end of the 2022 calendar year, but it's uncertain whether that'll happen. For reference, in Q4 of its fiscal 2022, its adjusted EBITDA was $12.9 million Canadian dollars, a minor deterioration from the prior quarter. The issue was that Aurora's average selling prices dropped due to an unfavorable shift in its sales channels, which doesn't bode well for the coming quarters.
So, the business won't be profitable anytime soon, and it's only distantly possible that through a combination of cost-cutting and selling higher-margin products like vaporizers and edibles it'll reach its adjusted EBITDA target. But one year from now, it's reasonably likely that on an adjusted basis it'll be reporting earnings in some form instead of losses, and things aren't nearly as dire as they might appear.
Don't count it out just yet
Aurora has the resources it needs to make a turnaround, though it might take more than the next 12 months to do so.
At the moment, the company has CA$380 million in cash and equivalents. With a cash outflow of only around CA$142 million in its 2022 fiscal year, there's next to no chance of Aurora becoming insolvent anytime in the next year or two, even if it continues with its acquisition activity. That's good news, as it gives management plenty of room to keep making efficiency improvements to its existing facilities while picking up useful businesses as desired.
In late August, it acquired a majority interest in Bevo Agtech, a vegetable supplier, for CA$45 million in cash up front and as much as CA$12 million in follow-up payments over the next three years. As part of the Bevo purchase, one of Aurora's underperforming cannabis facilities will be converted into growing other plants after being transferred to Bevo's control, which should cut down on the costs of shutting the facility down or spinning it off altogether. It's also expected to drive some growth from Bevo's soon-to-be-expanded cultivation output. So, don't be too surprised if management chases similar opportunities that can address multiple objectives within the mission to become more profitable.
Is it worth buying right now?
In late 2023, Aurora will almost certainly have significantly less cash from expenditures on operations and acquisitions. Its top line may still be shrinking, and it'll still be burning money on a non-adjusted basis. Even with operational improvements that beef up its margins somewhat, it'll still have a handful of issues with its long-term sustainability. Its shares could easily fall even further between now and then, though massively positive wildcards like cannabis legalization could also be in play.
Therefore, it's probably best to avoid buying any shares, at least until there are significant signs of improvement in its profitability over the course of multiple quarters.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | On that note, Aurora Cannabis (NASDAQ: ACB) is a business amid a major transition, with its fortunes (and the fortunes of its investors) in flux in the short term. The issue was that Aurora's average selling prices dropped due to an unfavorable shift in its sales channels, which doesn't bode well for the coming quarters. So, the business won't be profitable anytime soon, and it's only distantly possible that through a combination of cost-cutting and selling higher-margin products like vaporizers and edibles it'll reach its adjusted EBITDA target. | On that note, Aurora Cannabis (NASDAQ: ACB) is a business amid a major transition, with its fortunes (and the fortunes of its investors) in flux in the short term. Due to intentional production cuts and slack demand in the Canadian cannabis markets, its quarterly revenue fell by 8% year over year as of the fourth quarter, and the company is nowhere near profitable. While its leadership in the Canadian medical marijuana market is yielding some revenue growth, its position in the Canadian recreational market is eroding rapidly, with sales crumbling by 35% since the last three months of its 2021 fiscal year. | On that note, Aurora Cannabis (NASDAQ: ACB) is a business amid a major transition, with its fortunes (and the fortunes of its investors) in flux in the short term. Due to intentional production cuts and slack demand in the Canadian cannabis markets, its quarterly revenue fell by 8% year over year as of the fourth quarter, and the company is nowhere near profitable. While its leadership in the Canadian medical marijuana market is yielding some revenue growth, its position in the Canadian recreational market is eroding rapidly, with sales crumbling by 35% since the last three months of its 2021 fiscal year. | On that note, Aurora Cannabis (NASDAQ: ACB) is a business amid a major transition, with its fortunes (and the fortunes of its investors) in flux in the short term. In late 2023, Aurora will almost certainly have significantly less cash from expenditures on operations and acquisitions. Therefore, it's probably best to avoid buying any shares, at least until there are significant signs of improvement in its profitability over the course of multiple quarters. |
36460.0 | 2022-10-31 00:00:00 UTC | Why Tilray, Canopy Growth, and Aurora Cannabis Stocks Soared Today | ACB | https://www.nasdaq.com/articles/why-tilray-canopy-growth-and-aurora-cannabis-stocks-soared-today | nan | nan | What happened
Cannabis stocks are on fire Monday after another sign that the United States might be getting closer to easing banking rules for legalized marijuana. Canadian pot stocks soared on the news. As of 2:25 p.m. ET, shares of Tilray Brands (NASDAQ: TLRY) were 12.4% higher, Canopy Growth (NASDAQ: CGC) was up 18.3%, and Aurora Cannabis (NASDAQ: ACB) stock had popped 11.7%.
So what
Today's jump brings the return from Tilray shares to more than 40% in the last month as the support for legalizing weed in some form gains momentum in the U.S. The latest news came when Senate Majority Leader Chuck Schumer, the New York Democrat, said in a Sunday debate that Congress is getting "very close" to agreement on a marijuana bill that would allow legal pot businesses access to banking services.
The comments, reported by the website Marijuana Moment, also included the fact that the Democratic leader has made important progress on the topic with Republican senators, too.
Now what
In the Sunday debate with Republican challenger Joe Pinion, the topic of marijuana legalization was discussed. That topic resurfaced on the political landscape earlier this month when President Joe Biden announced he was going to pardon thousands who have been convicted on federal charges of simple marijuana possession.
Schumer agreed with that move, and noted that with many states having already legalized recreational cannabis, the federal government should take a stance. Schumer said, "I am working in a bipartisan way with Democrats and Republicans to take the SAFE Banking Act, which allows financial institutions to involve themselves in cannabis companies and lend money to them." Depending on the details in any new legislation, that move would seemingly allow Canadian companies to participate more in the U.S. market.
Canadian growers like Tilray and Canopy Growth have already made inroads setting up related businesses in this country. Canopy announced a new U.S.-based holding company last week, and Tilray owns hemp products company Manitoba Harvest, craft brewer SweetWater Brewing, and spirits maker Breckenridge Distillery in the U.S.
Voters are in favor of legalizing the possession of small amounts of marijuana, according to a recent poll. Monmouth University released the results of the poll last week that showed the majority of Americans from both sides of the political aisle supported allowing individuals to possess recreational amounts.
With 76% of Democrats and 52% of Republicans showing their support, many politicians could feel more confident in supporting what has been a hot-button issue. It's not surprising to see the stocks jump today after the Senate majority leader signaled progress might be imminent, at least on the associated banking rules.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Howard Smith has positions in Tilray, Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ET, shares of Tilray Brands (NASDAQ: TLRY) were 12.4% higher, Canopy Growth (NASDAQ: CGC) was up 18.3%, and Aurora Cannabis (NASDAQ: ACB) stock had popped 11.7%. The latest news came when Senate Majority Leader Chuck Schumer, the New York Democrat, said in a Sunday debate that Congress is getting "very close" to agreement on a marijuana bill that would allow legal pot businesses access to banking services. That topic resurfaced on the political landscape earlier this month when President Joe Biden announced he was going to pardon thousands who have been convicted on federal charges of simple marijuana possession. | ET, shares of Tilray Brands (NASDAQ: TLRY) were 12.4% higher, Canopy Growth (NASDAQ: CGC) was up 18.3%, and Aurora Cannabis (NASDAQ: ACB) stock had popped 11.7%. The comments, reported by the website Marijuana Moment, also included the fact that the Democratic leader has made important progress on the topic with Republican senators, too. Now what In the Sunday debate with Republican challenger Joe Pinion, the topic of marijuana legalization was discussed. | ET, shares of Tilray Brands (NASDAQ: TLRY) were 12.4% higher, Canopy Growth (NASDAQ: CGC) was up 18.3%, and Aurora Cannabis (NASDAQ: ACB) stock had popped 11.7%. The latest news came when Senate Majority Leader Chuck Schumer, the New York Democrat, said in a Sunday debate that Congress is getting "very close" to agreement on a marijuana bill that would allow legal pot businesses access to banking services. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. | ET, shares of Tilray Brands (NASDAQ: TLRY) were 12.4% higher, Canopy Growth (NASDAQ: CGC) was up 18.3%, and Aurora Cannabis (NASDAQ: ACB) stock had popped 11.7%. The latest news came when Senate Majority Leader Chuck Schumer, the New York Democrat, said in a Sunday debate that Congress is getting "very close" to agreement on a marijuana bill that would allow legal pot businesses access to banking services. The Motley Fool has no position in any of the stocks mentioned. |
36461.0 | 2022-10-27 00:00:00 UTC | ResMed (RMD) Q1 Earnings Match Estimates | ACB | https://www.nasdaq.com/articles/resmed-rmd-q1-earnings-match-estimates | nan | nan | ResMed (RMD) came out with quarterly earnings of $1.51 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $1.51 per share a year ago. These figures are adjusted for non-recurring items.
A quarter ago, it was expected that this maker of medical products for respiratory disorders would post earnings of $1.48 per share when it actually produced earnings of $1.49, delivering a surprise of 0.68%.
Over the last four quarters, the company has surpassed consensus EPS estimates just once.
ResMed, which belongs to the Zacks Medical - Products industry, posted revenues of $950.29 million for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 0.75%. This compares to year-ago revenues of $904.02 million. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
ResMed shares have lost about 10.2% since the beginning of the year versus the S&P 500's decline of -19.6%.
What's Next for ResMed?
While ResMed has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for ResMed: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $1.60 on $983.65 million in revenues for the coming quarter and $6.50 on $3.93 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Products is currently in the bottom 43% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Aurora Cannabis Inc. (ACB), another stock in the same industry, has yet to report results for the quarter ended September 2022.
This company is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 4% higher over the last 30 days to the current level.
Aurora Cannabis Inc.'s revenues are expected to be $38.85 million, down 18.6% from the year-ago quarter.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis Inc. (ACB), another stock in the same industry, has yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. | Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Aurora Cannabis Inc. (ACB), another stock in the same industry, has yet to report results for the quarter ended September 2022. ResMed, which belongs to the Zacks Medical - Products industry, posted revenues of $950.29 million for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 0.75%. | Aurora Cannabis Inc. (ACB), another stock in the same industry, has yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report ResMed (RMD) came out with quarterly earnings of $1.51 per share, in line with the Zacks Consensus Estimate. | Aurora Cannabis Inc. (ACB), another stock in the same industry, has yet to report results for the quarter ended September 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report ResMed (RMD) came out with quarterly earnings of $1.51 per share, in line with the Zacks Consensus Estimate. |
36462.0 | 2022-10-27 00:00:00 UTC | President Biden's Cannabis Scheduling Review: Investing Takeaways | ACB | https://www.nasdaq.com/articles/president-bidens-cannabis-scheduling-review%3A-investing-takeaways | nan | nan | President Biden's decision to initiate a cannabis scheduling review -- which will be conducted jointly by the Drug Enforcement Agency (DEA) and the Food and Drug Administration (FDA) -- lit a fire underneath pot stocks in early October. Once investors had a chance to digest this groundbreaking news, however, most pot equities quickly reversed course.
In fact, most marijuana stocks have lost significant ground since this review was announced roughly three weeks ago. Canada's Aurora Cannabis (NASDAQ: ACB), for instance, has shed nearly 6% of its value since the administration initiated this review.
This broad revision to the mean appears to reflect the complicated nature of this forthcoming review. After all, multiple, wholly distinct outcomes are possible from this scheduling review -- some of which are not particularly favorable for the current cohort of cannabis equities.
Image source: Getty Images.
Three possible outcomes
Based on what we know today, this review should result in one of three distinct outcomes:
A review does not lead to a change in cannabis' Schedule I status under the Controlled Substances Act (CSA). This outcome would be an affirmation of the view that marijuana has no value medically and a high potential for abuse. The good news is that the limited peer-reviewed literature on cannabis does not strongly support this stance. After all, marijuana has been shown to have potential clinical benefits across several indications, such as certain types of epilepsy, various inflammatory conditions, pain management, etc.
A review results in cannabis being moved to a less strict category, such as Schedule II (same category as cocaine) or perhaps Schedule V (where cough medicines containing codeine reside). This scenario would make it far easier to conduct clinical research of cannabis' medical benefits/risks in the United States. A lower-tier scheduling might also help pave the way for key banking reforms that would make it easier for cannabis-oriented businesses to obtain traditional forms of financing, such as loans, lines of credit, etc.
Cannabis is removed from the CSA. This blue-sky scenario would decriminalize marijuana at the federal level and leave the issue of regulation up to the states. However, the dearth of rigorous clinical data on cannabis' clinical profile may prevent federal authorities from going this route.
What this means for cannabis investors
Among these three scenarios, the federal government probably will choose the compromise option: moving marijuana to a less restrictive schedule. This avenue stands out as the most likely outcome because the DEA has repeatedly rejected several petitions to reschedule marijuana in the past, implying that there is still a fair amount of resistance within the federal government toward removing cannabis from the CSA altogether.
Moreover, to remove marijuana from the CSA, the DEA and FDA will probably require extensive research into marijuana's abuse potential and purported clinical benefits. This all-important research could take upwards of a decade to complete. Cannabis investors, in turn, should brace themselves for this less-than-optimal possibility.
Putting this convoluted legal situation into investing terms, cannabis stocks -- especially those rooted in Canada -- could continue to struggle for the remainder of the decade. That's not an ideal situation for shareholders of struggling companies like Aurora Cannabis, to be sure. But the market's dour reaction to President Biden's scheduling review seems to underscore this distinct possibility.
On the bright side, this extended battle to legalize marijuana at the federal level may end up conferring a key competitive advantage to entrenched multi-state operators (MSOs). So, if you're on the hunt for a cannabis stock, you might want to stick to MSOs with profitable operations and perhaps avoid the majority of Canadian cannabis companies such as Aurora Cannabis for the time being.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Canada's Aurora Cannabis (NASDAQ: ACB), for instance, has shed nearly 6% of its value since the administration initiated this review. A lower-tier scheduling might also help pave the way for key banking reforms that would make it easier for cannabis-oriented businesses to obtain traditional forms of financing, such as loans, lines of credit, etc. This avenue stands out as the most likely outcome because the DEA has repeatedly rejected several petitions to reschedule marijuana in the past, implying that there is still a fair amount of resistance within the federal government toward removing cannabis from the CSA altogether. | Canada's Aurora Cannabis (NASDAQ: ACB), for instance, has shed nearly 6% of its value since the administration initiated this review. President Biden's decision to initiate a cannabis scheduling review -- which will be conducted jointly by the Drug Enforcement Agency (DEA) and the Food and Drug Administration (FDA) -- lit a fire underneath pot stocks in early October. This scenario would make it far easier to conduct clinical research of cannabis' medical benefits/risks in the United States. | Canada's Aurora Cannabis (NASDAQ: ACB), for instance, has shed nearly 6% of its value since the administration initiated this review. President Biden's decision to initiate a cannabis scheduling review -- which will be conducted jointly by the Drug Enforcement Agency (DEA) and the Food and Drug Administration (FDA) -- lit a fire underneath pot stocks in early October. Three possible outcomes Based on what we know today, this review should result in one of three distinct outcomes: A review does not lead to a change in cannabis' Schedule I status under the Controlled Substances Act (CSA). | Canada's Aurora Cannabis (NASDAQ: ACB), for instance, has shed nearly 6% of its value since the administration initiated this review. Three possible outcomes Based on what we know today, this review should result in one of three distinct outcomes: A review does not lead to a change in cannabis' Schedule I status under the Controlled Substances Act (CSA). This scenario would make it far easier to conduct clinical research of cannabis' medical benefits/risks in the United States. |
36463.0 | 2022-10-25 00:00:00 UTC | Cannabis shares rally as Canopy seeks to accelerate U.S. market entry | ACB | https://www.nasdaq.com/articles/cannabis-shares-rally-as-canopy-seeks-to-accelerate-u.s.-market-entry | nan | nan | NEW YORK, Oct 25 (Reuters) - Shares of marijuana producers jumped on Tuesday, led by a rally in Canada's Canopy Growth Corp WEED.TO, after it said it will create a holding company to fast track its entry into the United States.
U.S.-listed shares of Canopy CGC.O ended up 27.1% at $2.91, and were among the biggest daily percentage gainers on Nasdaq. The stock also registered its biggest one-day percentage gain since Aug. 15, 2018.
Shares of Tilray Brands TLRY.O were up 13.3%, U.S.-listed shares of Aurora Cannabis ACB.O were up 19.2% and SNDL Inc SNDL.O was up 9.4%.
Canopy on Tuesday outlined a holding company structure to set up Canopy USA LLC. The new entity will take over Acreage Holdings Inc ACRGau.CD in return for shares of Canopy Growth.
Gaining exposure to the U.S. market would be a plus for Canopy, but since public marijuana companies' stocks are low-priced, "any move is amplified because markets expect little from these names," Jessica Rabe, co-founder of DataTrek Research, said in an e-mail.
Federal legalization of marijuana in the United States could still be "a long way off, especially if Republicans take back Congress in the upcoming mid-term elections," she said, and cannabis companies need to navigate many U.S. state laws and regulations.
Canopy Growth's U.S.-listed shares are down about 67% for the year.
Cannabis stocks jumped earlier this month after U.S. President Joe Biden took steps to overhaul U.S. marijuana policy.
Among other cannabis stocks, U.S.-listed shares of Hexo Corp HEXO.O were up about 8% and OrganiGram Holdings' U.S.-listed shares OGI.O were up 7.4%.
Meanwhile, beverage firm Constellation Brands STZ.N announced a plan to convert its existing ownership in Canopy into new exchangeable shares. Constellation's stock ended up 3.9%.
(Reporting by Caroline Valetkevitch; Additional reporting by Lance Tupper in New York; Editing by Bill Berkrot)
((caroline.valetkevitch@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Tilray Brands TLRY.O were up 13.3%, U.S.-listed shares of Aurora Cannabis ACB.O were up 19.2% and SNDL Inc SNDL.O was up 9.4%. NEW YORK, Oct 25 (Reuters) - Shares of marijuana producers jumped on Tuesday, led by a rally in Canada's Canopy Growth Corp WEED.TO, after it said it will create a holding company to fast track its entry into the United States. Cannabis stocks jumped earlier this month after U.S. President Joe Biden took steps to overhaul U.S. marijuana policy. | Shares of Tilray Brands TLRY.O were up 13.3%, U.S.-listed shares of Aurora Cannabis ACB.O were up 19.2% and SNDL Inc SNDL.O was up 9.4%. NEW YORK, Oct 25 (Reuters) - Shares of marijuana producers jumped on Tuesday, led by a rally in Canada's Canopy Growth Corp WEED.TO, after it said it will create a holding company to fast track its entry into the United States. Canopy Growth's U.S.-listed shares are down about 67% for the year. | Shares of Tilray Brands TLRY.O were up 13.3%, U.S.-listed shares of Aurora Cannabis ACB.O were up 19.2% and SNDL Inc SNDL.O was up 9.4%. NEW YORK, Oct 25 (Reuters) - Shares of marijuana producers jumped on Tuesday, led by a rally in Canada's Canopy Growth Corp WEED.TO, after it said it will create a holding company to fast track its entry into the United States. Gaining exposure to the U.S. market would be a plus for Canopy, but since public marijuana companies' stocks are low-priced, "any move is amplified because markets expect little from these names," Jessica Rabe, co-founder of DataTrek Research, said in an e-mail. | Shares of Tilray Brands TLRY.O were up 13.3%, U.S.-listed shares of Aurora Cannabis ACB.O were up 19.2% and SNDL Inc SNDL.O was up 9.4%. NEW YORK, Oct 25 (Reuters) - Shares of marijuana producers jumped on Tuesday, led by a rally in Canada's Canopy Growth Corp WEED.TO, after it said it will create a holding company to fast track its entry into the United States. U.S.-listed shares of Canopy CGC.O ended up 27.1% at $2.91, and were among the biggest daily percentage gainers on Nasdaq. |
36464.0 | 2022-10-25 00:00:00 UTC | Why Aurora Cannabis, Green Thumb Industries, and OrganiGram Holdings Are Melting Up Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-green-thumb-industries-and-organigram-holdings-are-melting-up-today | nan | nan | What happened
Marijuana stocks are having an unusually strong showing today. As of 11:28 a.m. ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock is up by 16.3%, Green Thumb Industries (OTC: GTBIF) shares are higher by 5.7%, and OrganiGram Holdings' (NASDAQ: OGI) equity is in the green by 8.5%.
What's powering this nearly industrywide rally today? Cannabis stocks are bolting higher this morning for two key reasons:
Better-than-expected corporate earnings from industry giants like Coca-Cola, General Motors, and United Parcel Service are lifting stocks across the board today.
Marijuana equities are also getting a boost today from the news that Canopy Growth (NASDAQ: CGC) has officially formed a U.S.-based holding company. This move is designed to accelerate the international cannabis giant's entry into the fast-growing U.S. market.
Image source: Getty Images.
So what
Cannabis stocks have been locked in a stubbornly persistent downward trend all year long. The negative investor sentiment toward growth-oriented industries like legalized marijuana, the unfavorable market dynamics in the Canadian cannabis market, and the slow crawl toward courtrywide legalization in the U.S. have all played a role in this broad downturn across the cannabis stock landscape in 2022.
Upbeat corporate earnings and Canopy's bold decision to move forward with its U.S. expansion plans could prove to be needle-moving events for cannabis investors in the coming months. The bear market in stocks at large is close to surpassing historical norms from a length standpoint, meaning that the formation of another bull market may be close at hand. Positive earnings from industry titans like Coca-Cola, General Motors, and United Parcel Service ought to serve as a stark reminder for investors that bear markets and economic downturns don't last forever.
Regarding Canopy's southward migration, this move is likely a harbinger of things to come for the industry as a whole. Aurora, after all, has long been eyeing the lucrative U.S. market, so it wouldn't be surprising if Aurora took a page from Canopy's playbook by forming its own U.S. holding company.
And in this next step in the industry's evolution, Green Thumb and OrganiGram are probably going to be red-hot takeover targets. Green Thumb would instantly ratchet up any Canadian company's U.S. footprint by virtue of its expansive commercial reach stateside. And OrganiGram's craft cultivator status may prove attractive to a number of Canadian companies looking to add a lineup of premium brands to their product portfolios.
Now what
Are any of these marijuana stocks worth buying right now? Green Thumb and OrganiGram are both fundamentally strong companies with a bright outlook. This means aggressive investors may want to consider buying these two beaten-down equities as the industry moves into the next phase of its life cycle. Aurora, on the other hand, still has work to do to secure its future as a king of cannabis.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Green Thumb Industries and OrganiGram Holdings. The Motley Fool recommends United Parcel Service and recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock is up by 16.3%, Green Thumb Industries (OTC: GTBIF) shares are higher by 5.7%, and OrganiGram Holdings' (NASDAQ: OGI) equity is in the green by 8.5%. Upbeat corporate earnings and Canopy's bold decision to move forward with its U.S. expansion plans could prove to be needle-moving events for cannabis investors in the coming months. Positive earnings from industry titans like Coca-Cola, General Motors, and United Parcel Service ought to serve as a stark reminder for investors that bear markets and economic downturns don't last forever. | ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock is up by 16.3%, Green Thumb Industries (OTC: GTBIF) shares are higher by 5.7%, and OrganiGram Holdings' (NASDAQ: OGI) equity is in the green by 8.5%. Cannabis stocks are bolting higher this morning for two key reasons: Better-than-expected corporate earnings from industry giants like Coca-Cola, General Motors, and United Parcel Service are lifting stocks across the board today. Positive earnings from industry titans like Coca-Cola, General Motors, and United Parcel Service ought to serve as a stark reminder for investors that bear markets and economic downturns don't last forever. | ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock is up by 16.3%, Green Thumb Industries (OTC: GTBIF) shares are higher by 5.7%, and OrganiGram Holdings' (NASDAQ: OGI) equity is in the green by 8.5%. Cannabis stocks are bolting higher this morning for two key reasons: Better-than-expected corporate earnings from industry giants like Coca-Cola, General Motors, and United Parcel Service are lifting stocks across the board today. The negative investor sentiment toward growth-oriented industries like legalized marijuana, the unfavorable market dynamics in the Canadian cannabis market, and the slow crawl toward courtrywide legalization in the U.S. have all played a role in this broad downturn across the cannabis stock landscape in 2022. | ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock is up by 16.3%, Green Thumb Industries (OTC: GTBIF) shares are higher by 5.7%, and OrganiGram Holdings' (NASDAQ: OGI) equity is in the green by 8.5%. The negative investor sentiment toward growth-oriented industries like legalized marijuana, the unfavorable market dynamics in the Canadian cannabis market, and the slow crawl toward courtrywide legalization in the U.S. have all played a role in this broad downturn across the cannabis stock landscape in 2022. The Motley Fool has positions in and recommends Green Thumb Industries and OrganiGram Holdings. |
36465.0 | 2022-10-24 00:00:00 UTC | Why Tilray, Canopy Growth, and Aurora Cannabis Stocks Just Dropped | ACB | https://www.nasdaq.com/articles/why-tilray-canopy-growth-and-aurora-cannabis-stocks-just-dropped | nan | nan | What happened
Stock markets opened higher on Monday, and as of noon ET, the Dow Jones Industrial Average is up a solid 1% -- but don't try to tell marijuana investors. They're going through their own private bear-cub market today, with shares of Canopy Growth (NASDAQ: CGC) falling 2.7%, Tilray Brands (NASDAQ: TLRY) down 3.4%, and Aurora Cannabis (NASDAQ: ACB) leading the pack lower with a 4.1% decline.
So what
What's got marijuana investors so spooked? There's not a lot new happening on the regulatory front today -- no really big changes in the prospects for federal marijuana legalization. What there is though, is a bit of headline risk that may affect the extent to which marijuana gets legalized in the United States, once legalization finally happens.
There's a movement in Congress -- which is largely in favor of legalizing marijuana... eventually -- to carve out an exception for marijuana edibles. Citing "an explosion of marijuana use among children," the 156-member House Republican Study Committee (which makes up about 35% of total votes in Congress) is advocating that, even if marijuana, in general, is allowed to be legalized, marijuana edibles "in the form of candy or beverages" should remain illegal due to the risk that such things as cannabis-infused gummy candies will be consumed by small children.
And over the weekend, it became apparent that that risk is very real. As The Today Show reported on Sunday, a mother in Virginia has been charged with felony child neglect and felony murder after her 4-year-old son allegedly ate a "large amount" of her THC-infused gummies -- and died.
Now what
Now this may be an isolated incident and even a freak accident. Today, at least, wasn't able to find any other instances in which marijuana edibles resulted in a child death and a murder case. But the incident is sure to become ammunition for legislators citing the need to keep restrictions on edibles sales in order to protect kids. And as I pointed out earlier this month, the sales of edibles are by far the most profitable form of marijuana sales for cannabis companies, commanding gross profit margins as high as 92%.
Should this most profitable pot product remain banned by federal law, or should publicity of the Virginia murder case cause states to reestablish restrictions on edibles sales, that could potentially crimp profits for marijuana stocks such as Aurora, Canopy, and Tilray. It could delay the day when these companies finally become profitable, or even prevent net profitability entirely.
Although I still believe legalization looks inevitable at this point, the chances for legalization of marijuana companies' most profitable product now look more doubtful. Investors selling marijuana stocks today appear to agree.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | They're going through their own private bear-cub market today, with shares of Canopy Growth (NASDAQ: CGC) falling 2.7%, Tilray Brands (NASDAQ: TLRY) down 3.4%, and Aurora Cannabis (NASDAQ: ACB) leading the pack lower with a 4.1% decline. What happened Stock markets opened higher on Monday, and as of noon ET, the Dow Jones Industrial Average is up a solid 1% -- but don't try to tell marijuana investors. There's not a lot new happening on the regulatory front today -- no really big changes in the prospects for federal marijuana legalization. | They're going through their own private bear-cub market today, with shares of Canopy Growth (NASDAQ: CGC) falling 2.7%, Tilray Brands (NASDAQ: TLRY) down 3.4%, and Aurora Cannabis (NASDAQ: ACB) leading the pack lower with a 4.1% decline. And as I pointed out earlier this month, the sales of edibles are by far the most profitable form of marijuana sales for cannabis companies, commanding gross profit margins as high as 92%. Should this most profitable pot product remain banned by federal law, or should publicity of the Virginia murder case cause states to reestablish restrictions on edibles sales, that could potentially crimp profits for marijuana stocks such as Aurora, Canopy, and Tilray. | They're going through their own private bear-cub market today, with shares of Canopy Growth (NASDAQ: CGC) falling 2.7%, Tilray Brands (NASDAQ: TLRY) down 3.4%, and Aurora Cannabis (NASDAQ: ACB) leading the pack lower with a 4.1% decline. Citing "an explosion of marijuana use among children," the 156-member House Republican Study Committee (which makes up about 35% of total votes in Congress) is advocating that, even if marijuana, in general, is allowed to be legalized, marijuana edibles "in the form of candy or beverages" should remain illegal due to the risk that such things as cannabis-infused gummy candies will be consumed by small children. Should this most profitable pot product remain banned by federal law, or should publicity of the Virginia murder case cause states to reestablish restrictions on edibles sales, that could potentially crimp profits for marijuana stocks such as Aurora, Canopy, and Tilray. | They're going through their own private bear-cub market today, with shares of Canopy Growth (NASDAQ: CGC) falling 2.7%, Tilray Brands (NASDAQ: TLRY) down 3.4%, and Aurora Cannabis (NASDAQ: ACB) leading the pack lower with a 4.1% decline. Should this most profitable pot product remain banned by federal law, or should publicity of the Virginia murder case cause states to reestablish restrictions on edibles sales, that could potentially crimp profits for marijuana stocks such as Aurora, Canopy, and Tilray. Although I still believe legalization looks inevitable at this point, the chances for legalization of marijuana companies' most profitable product now look more doubtful. |
36466.0 | 2022-10-19 00:00:00 UTC | 1 Cannabis Stock to Buy and 1 to Avoid in This Bear Market | ACB | https://www.nasdaq.com/articles/1-cannabis-stock-to-buy-and-1-to-avoid-in-this-bear-market | nan | nan | The S&P 500 recently hit a near-two-year low, and the Dow Jones has fallen into bear market territory. For savvy investors, buying stocks in this environment might not be such a bad move. There are plenty of beaten-down equities that look like excellent long-term options.
However, some companies face specific issues that are likely to persist even if marketwide troubles dissipate and are not worth buying right now. On that note, let's look at two companies, one in each category: SNDL (NASDAQ: SNDL), and Trulieve Cannabis (OTC: TCNNF). These two marijuana companies have vastly different prospects.
Data by YCharts.
The stock to buy: Trulieve Cannabis
The entire cannabis industry has been struggling lately. With a suite of economic problems such as inflation, not to mention an ongoing global pandemic and geopolitical issues, investors have sought to avoid highly risky stocks that generate little profit. Most pot growers fit the bill, but Trulieve Cannabis, a vertically integrated company that operates in the U.S., stands out as one of the most disciplined.
Rather than fund pricey expansion efforts throughout the entire country by relying on dilutive forms of financing, Trulieve Cannabis started by focusing much of its efforts in just one state, Florida. Now the company operates in 11 states, although 120 of its market-leading 177 dispensaries are still in Florida.
Trulieve's financial results have been decent. During the second quarter, revenue increased by 49% year over year to $320.3 million, although that partly reflects the acquisition of Harvest & Recreation Health. Still, even before this acquisition closed in October 2021, Trulieve Cannabis's revenue was on a consistent upward trajectory.
Data by YCharts.
On the bottom line, Trulieve reported a net loss of $22.5 million in the quarter, compared to the net income of $40.9 million reported during the year-ago period.
Few cannabis companies have managed to turn meaningful, consistent profits, but Trulieve has been one of the most impressive in this regard, at least until its recent acquisition of Harvest. Trulieve Cannabis recorded 18 consecutive quarters of profitability through June 30.
While the company's recent net loss might be looked at as a step in the wrong direction, it's not rare to see businesses incur losses following a major acquisition.
Much of the red ink on the company's bottom line during the second quarter was due to one-time charges. The adjusted net loss for the period, which eliminates one-time items related to its acquisition of Harvest, came in at a much better $1.1 million.
It's also worth noting that Trulieve Cannabis' margins have decreased in the past couple of years as its expenses have increased. That is partly a result of the company's expanding operations. It had only 52 dispensaries as of June 2020, less than a third of the number it has now.
The company has done so to cement its position as a major player in this increasingly competitive market, which seems to be working. Trulieve Cannabis remains a leader in states such as Florida, Arizona, West Virginia, and Pennsylvania. The company's management has focused on profitable growth in the past, and it plans to continue down that path.
In my opinion, investors should ignore the red ink on the bottom line for now. There will be plenty of opportunities for Trulieve to grow its revenue and become consistently profitable eventually. According to some estimates, the market will expand at a compound annual growth rate of 14.9% through 2030.
Trulieve Cannabis stands as one of the best picks to profit from this opportunity.
The stock to avoid: SNDL
SNDL, formerly known as Sundial Growers, rose to fame as part of a group of equities known as meme stocks. The company, which operates in Canada, is a producer and retailer of cannabis, and it owns liquor retail operations in the country, too. With its shares trading for just $2, SNDL might look cheap by virtue of its absolute price.
That's could especially be the case as its revenue skyrocketed recently. During the second quarter, SNDL's top line came in at $223.7 million, compared to net revenue of just $9.2 million during the year-ago period. But that was due to acquisitions, most notably alcohol retailer Alcanna in March for about 320 million Canadian dollars ($233 million) in cash and stock.
There is nothing wrong with acquisitions. SNDL has diversified that way, adding a retail liquor business from which it now generates most of its sales. But the company does not have a good track record. For one, SNDL's revenue has generally been fairly inconsistent until its most recent acquisitions.
Data by YCharts.
That may be due to the competitive nature of the Canadian cannabis market. Legalization in the country attracted a substantial number of players. Also, the illicit market remains alive and well, despite legalization, and it is helping complicate things for SNDL and its peers. Further, SNDL has been consistently unprofitable, and there is no telling when it will start recording green on the bottom line consistently.
Data by YCharts.
Companies that aren't profitable can still be worth buying, provided their business is rapidly and organically growing, and they are building a competitive advantage of some sort. SNDL's struggles to do that while focusing on its marijuana operations may be why it largely turned away from cannabis through its recent acquisitions.
In that sense, SNDL's shift toward liquor retailing could be a great move. Here's why. Analysts continue to estimate that the cannabis market in North America (including Canada) has attractive long-term potential. SNDL's liquor retailing segment could help it weather the current storm and support its cannabis business while the industry matures, which could later leave SNDL in an enviable position down the road.
But the company hasn't shown an ability to report solid financial results regularly, and it is too soon to know whether the company will perform consistently better from here on out. Given SNDL's track record, it's best to watch how things unfold at arm's length, at least for now.
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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Trulieve Cannabis Corp. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | With a suite of economic problems such as inflation, not to mention an ongoing global pandemic and geopolitical issues, investors have sought to avoid highly risky stocks that generate little profit. Few cannabis companies have managed to turn meaningful, consistent profits, but Trulieve has been one of the most impressive in this regard, at least until its recent acquisition of Harvest. Companies that aren't profitable can still be worth buying, provided their business is rapidly and organically growing, and they are building a competitive advantage of some sort. | The stock to buy: Trulieve Cannabis The entire cannabis industry has been struggling lately. During the second quarter, revenue increased by 49% year over year to $320.3 million, although that partly reflects the acquisition of Harvest & Recreation Health. On the bottom line, Trulieve reported a net loss of $22.5 million in the quarter, compared to the net income of $40.9 million reported during the year-ago period. | On that note, let's look at two companies, one in each category: SNDL (NASDAQ: SNDL), and Trulieve Cannabis (OTC: TCNNF). The stock to buy: Trulieve Cannabis The entire cannabis industry has been struggling lately. Few cannabis companies have managed to turn meaningful, consistent profits, but Trulieve has been one of the most impressive in this regard, at least until its recent acquisition of Harvest. | The stock to buy: Trulieve Cannabis The entire cannabis industry has been struggling lately. SNDL's struggles to do that while focusing on its marijuana operations may be why it largely turned away from cannabis through its recent acquisitions. 10 stocks we like better than SNDL Inc. |
36467.0 | 2022-10-18 00:00:00 UTC | Why Aurora Cannabis, Canopy Growth, and Green Thumb Industries Are Marching Higher Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-growth-and-green-thumb-industries-are-marching-higher-today | nan | nan | What happened
Marijuana stocks are having a moment in the sun today. As of 11:16 a.m. ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock was up by 1%; Canopy Growth's (NASDAQ: CGC) shares were higher by 1%; and Green Thumb Industries' (OTC: GTBIF) equity was up by 3%.
These beaten-down pot stocks appear to be melting up today in response to positive third-quarter earnings reports from industry giants like Goldman Sachs and Johnson & Johnson, as well as easing of the corporate bond situation in the U.K. Speaking to this point, all of the major U.S. stock indices are solidly in the green at the time of this writing.
Image source: Getty Images.
So what
Aurora, Canopy, and Green Thumb have had a dreadful year from a stock performance standpoint. Year to date, Aurora's shares are down by nearly 80%, Canopy's stock has plunged by an unsightly 71%, and Green Thumb's equity has fallen by 52.5%.
Cannabis stocks have cratered across this board this year thanks to the ongoing bear market, along with a less-than-stellar fundamental outlook for the industry as a whole. So, with these monstrous declines in mind, it's not all that surprising to see the struggling pot stocks getting a bit of relief in the wake of these favorable tailwinds today. Bargain hunters appear to be taking advantage of this prolonged weakness on the belief that better days ought to be ahead.
Now what
Are any of these cannabis stocks worth buying right now? Among the three, Green Thumb stands out as the best buy for a couple of reasons. Green Thumb is a multi-state operator (MSO) with a strong balance sheet, a rapidly rising top line, and a healthy commercial footprint that stretches across 15 U.S. markets. What's more, the cannabis company's shares are presently trading at well under two times forward-looking sales. That's a bargain for a high-growth, consumer-packaged goods company.
Aurora and Canopy Growth, on the other hand, are both struggling to find a path toward profitability. The core problem is that their shared domestic market of Canada is simply too small to support the thousands of licensed cannabis companies operating in the country right now. Moreover, the slow pace of legalization in larger international markets like the U.S. has put a damper on their all-important expansion plans.
The bottom line is that cannabis investors are probably better served by sticking to cash flow positive MSOs like Green Thumb, rather than Canadian pot giants such as Aurora or Canopy Growth. After all, the Canadian cannabis market has a long way to go to reach some kind of balance between supply and demand. And the international cannabis scene is likely to take a few more years to become a viable cash cow for these Canadian marijuana companies.
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Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
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Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
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George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs and Green Thumb Industries. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock was up by 1%; Canopy Growth's (NASDAQ: CGC) shares were higher by 1%; and Green Thumb Industries' (OTC: GTBIF) equity was up by 3%. Green Thumb is a multi-state operator (MSO) with a strong balance sheet, a rapidly rising top line, and a healthy commercial footprint that stretches across 15 U.S. markets. The core problem is that their shared domestic market of Canada is simply too small to support the thousands of licensed cannabis companies operating in the country right now. | ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock was up by 1%; Canopy Growth's (NASDAQ: CGC) shares were higher by 1%; and Green Thumb Industries' (OTC: GTBIF) equity was up by 3%. The bottom line is that cannabis investors are probably better served by sticking to cash flow positive MSOs like Green Thumb, rather than Canadian pot giants such as Aurora or Canopy Growth. The Motley Fool has positions in and recommends Goldman Sachs and Green Thumb Industries. | ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock was up by 1%; Canopy Growth's (NASDAQ: CGC) shares were higher by 1%; and Green Thumb Industries' (OTC: GTBIF) equity was up by 3%. Year to date, Aurora's shares are down by nearly 80%, Canopy's stock has plunged by an unsightly 71%, and Green Thumb's equity has fallen by 52.5%. The bottom line is that cannabis investors are probably better served by sticking to cash flow positive MSOs like Green Thumb, rather than Canadian pot giants such as Aurora or Canopy Growth. | ET Tuesday morning, Aurora Cannabis' (NASDAQ: ACB) stock was up by 1%; Canopy Growth's (NASDAQ: CGC) shares were higher by 1%; and Green Thumb Industries' (OTC: GTBIF) equity was up by 3%. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. The Motley Fool has positions in and recommends Goldman Sachs and Green Thumb Industries. |
36468.0 | 2022-10-17 00:00:00 UTC | Consumer Sector Update for 10/17/2022: ACB,ACB.TO,LZ,AMC,FOX,FOXA,NWS,NWSA | ACB | https://www.nasdaq.com/articles/consumer-sector-update-for-10-17-2022%3A-acbacb.tolzamcfoxfoxanwsnwsa | nan | nan | Consumer stocks were extending their gains shortly before Monday's closing bell, with the SPDR Consumer Staples Select Sector ETF (XLP) climbing 1.2% and the SPDR Consumer Discretionary Select Sector ETF (XLY) rising 4.1%.
In company news, Aurora Cannabis (ACB) climbed 8.2% after Monday announcing its fall lineup of recreational and medical cannabis products, including three new proprietary strains, and beginning this month with availability on its Aurora Medical portal and later expanding to adult-use retailers.
LegalZoom.com (LZ) climbed almost 13% after the legal services company announced its purchase of Revv, a document automation platform based in India, in a bid to bolster its forms and legal templates library. Financial terms were not disclosed.
AMC Entertainment (AMC) rose 5.3% after the movie theater chain late Friday said its Odeon Finco subsidiary priced a $400 million private placement of 12.75% senior secured notes due 2027 at 92% of face value.
Fox (FOX, FOXA) and News Corp (NWS, NWSA) were moving in opposite directions - with Fox shares dropping 8.2% while News Corp was advancing 2.5% - after late Friday saying they have each formed special board committees to evaluate a proposal by executive board chairman Rupert Murdock and the Murdock Family Trust to re-combine the television broadcaster and newspaper publisher more than nine years after they were split up into separate companies.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In company news, Aurora Cannabis (ACB) climbed 8.2% after Monday announcing its fall lineup of recreational and medical cannabis products, including three new proprietary strains, and beginning this month with availability on its Aurora Medical portal and later expanding to adult-use retailers. AMC Entertainment (AMC) rose 5.3% after the movie theater chain late Friday said its Odeon Finco subsidiary priced a $400 million private placement of 12.75% senior secured notes due 2027 at 92% of face value. Fox (FOX, FOXA) and News Corp (NWS, NWSA) were moving in opposite directions - with Fox shares dropping 8.2% while News Corp was advancing 2.5% - after late Friday saying they have each formed special board committees to evaluate a proposal by executive board chairman Rupert Murdock and the Murdock Family Trust to re-combine the television broadcaster and newspaper publisher more than nine years after they were split up into separate companies. | In company news, Aurora Cannabis (ACB) climbed 8.2% after Monday announcing its fall lineup of recreational and medical cannabis products, including three new proprietary strains, and beginning this month with availability on its Aurora Medical portal and later expanding to adult-use retailers. Consumer stocks were extending their gains shortly before Monday's closing bell, with the SPDR Consumer Staples Select Sector ETF (XLP) climbing 1.2% and the SPDR Consumer Discretionary Select Sector ETF (XLY) rising 4.1%. Fox (FOX, FOXA) and News Corp (NWS, NWSA) were moving in opposite directions - with Fox shares dropping 8.2% while News Corp was advancing 2.5% - after late Friday saying they have each formed special board committees to evaluate a proposal by executive board chairman Rupert Murdock and the Murdock Family Trust to re-combine the television broadcaster and newspaper publisher more than nine years after they were split up into separate companies. | In company news, Aurora Cannabis (ACB) climbed 8.2% after Monday announcing its fall lineup of recreational and medical cannabis products, including three new proprietary strains, and beginning this month with availability on its Aurora Medical portal and later expanding to adult-use retailers. Consumer stocks were extending their gains shortly before Monday's closing bell, with the SPDR Consumer Staples Select Sector ETF (XLP) climbing 1.2% and the SPDR Consumer Discretionary Select Sector ETF (XLY) rising 4.1%. Fox (FOX, FOXA) and News Corp (NWS, NWSA) were moving in opposite directions - with Fox shares dropping 8.2% while News Corp was advancing 2.5% - after late Friday saying they have each formed special board committees to evaluate a proposal by executive board chairman Rupert Murdock and the Murdock Family Trust to re-combine the television broadcaster and newspaper publisher more than nine years after they were split up into separate companies. | In company news, Aurora Cannabis (ACB) climbed 8.2% after Monday announcing its fall lineup of recreational and medical cannabis products, including three new proprietary strains, and beginning this month with availability on its Aurora Medical portal and later expanding to adult-use retailers. Consumer stocks were extending their gains shortly before Monday's closing bell, with the SPDR Consumer Staples Select Sector ETF (XLP) climbing 1.2% and the SPDR Consumer Discretionary Select Sector ETF (XLY) rising 4.1%. LegalZoom.com (LZ) climbed almost 13% after the legal services company announced its purchase of Revv, a document automation platform based in India, in a bid to bolster its forms and legal templates library. |
36469.0 | 2022-10-17 00:00:00 UTC | Why Aurora Cannabis, Canopy Growth, and Tilray Stocks Bounced Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-growth-and-tilray-stocks-bounced-today | nan | nan | What happened
Marijuana stocks opened higher on Monday -- and granted, with stock markets glowing green across the board, it looks like pretty much everything opened higher. But for Canopy Growth (NASDAQ: CGC), Tilray (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB) -- up 7.9%, 7.5%, and 6.7%, respectively, as of 1 p.m. ET -- there was actually a bit of industry-specific optimism backing up their rally.
On Friday, Lester Black, a journalist who has covered the cannabis sector for many years, predicted in a column on the data-centric news site FiveThirtyEight that marijuana might very well be decriminalized "by the end of [President Biden's] current term in office."
So what
As you can imagine, this prediction was music to marijuana investors' ears -- maybe not immediately, in the middle of Friday's stock market sell-off -- but certainly on Monday as the market began to stabilize. As Black explained, President Biden's order for the U.S. government to "expeditiously" review the case for rescheduling marijuana from a Schedule I drug to a less restrictive level is something less than a move for full-scale legalization -- but also "more than just an empty gesture." In fact, he said, it has "triggered a process that could end federal pot prohibition as we know it."
Maintaining marijuana's Schedule I status -- which is meant only for drugs that are exceptionally dangerous and have no valid medical uses -- "makes no sense," President Biden said.
Black called this a "unique ... and powerful" statement that implies that Biden wants rescheduling of the drug to happen "quickly."
All that being said, what might constitute "quickly" is open to interpretation. According to Black, rescheduling is usually a long, drawn-out process. First, the Food and Drug Administration must conduct a scientific evaluation of the drug, which is then sent to the secretary of Health and Human Services for review. After that, the secretary makes a recommendation to the Drug Enforcement Administration (DEA). Eventually, the final decision rests with the attorney general, who as head of the Justice Department has the DEA under his purview. That's already a somewhat convoluted process, and as Black points out, "there are many ways Biden's scheduling directive could fail" along the way.
Now what
Ultimately, Black still concludes that legalization may happen sooner than some might think -- but that might not help marijuana investors out much. As The Wall Street Journal observed in a column also published Friday, "legal grass isn't always greener for cannabis companies," as the example of marijuana legalization in Canada illustrates.
Describing Canada's cannabis industry as being in "a pitiful state" four years after legalization, The Wall Street Journal's Carol Ryan notes that investors who piled into Canadian cannabis companies "have been razed." Aurora, Tilray, and Canopy Growth, by the way, are all based in Canada, and Ryan notes that Canadian marijuana stocks have collectively lost 85% of their value over the last few years as legalization permitted hundreds of companies to enter the market, cutting marijuana prices in half, and cutting profit margins as well.
Granted, it's possible that legalization in the much larger U.S. market might enable marijuana companies to "make it up on volume," as the old saying goes. But recall that the full version of that joke is: "We lose money on every sale, but we make it up on volume." That's not a sustainable business model.
After watching Aurora Cannabis, Tilray, and Canopy Growth lose money for four straight years selling legal weed in Canada, I have serious doubts they would do any better in a post-legalization U.S. market.
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*Stock Advisor returns as of September 30, 2022
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | But for Canopy Growth (NASDAQ: CGC), Tilray (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB) -- up 7.9%, 7.5%, and 6.7%, respectively, as of 1 p.m. On Friday, Lester Black, a journalist who has covered the cannabis sector for many years, predicted in a column on the data-centric news site FiveThirtyEight that marijuana might very well be decriminalized "by the end of [President Biden's] current term in office." As Black explained, President Biden's order for the U.S. government to "expeditiously" review the case for rescheduling marijuana from a Schedule I drug to a less restrictive level is something less than a move for full-scale legalization -- but also "more than just an empty gesture." | But for Canopy Growth (NASDAQ: CGC), Tilray (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB) -- up 7.9%, 7.5%, and 6.7%, respectively, as of 1 p.m. What happened Marijuana stocks opened higher on Monday -- and granted, with stock markets glowing green across the board, it looks like pretty much everything opened higher. Describing Canada's cannabis industry as being in "a pitiful state" four years after legalization, The Wall Street Journal's Carol Ryan notes that investors who piled into Canadian cannabis companies "have been razed." | But for Canopy Growth (NASDAQ: CGC), Tilray (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB) -- up 7.9%, 7.5%, and 6.7%, respectively, as of 1 p.m. What happened Marijuana stocks opened higher on Monday -- and granted, with stock markets glowing green across the board, it looks like pretty much everything opened higher. Aurora, Tilray, and Canopy Growth, by the way, are all based in Canada, and Ryan notes that Canadian marijuana stocks have collectively lost 85% of their value over the last few years as legalization permitted hundreds of companies to enter the market, cutting marijuana prices in half, and cutting profit margins as well. | But for Canopy Growth (NASDAQ: CGC), Tilray (NASDAQ: TLRY), and Aurora Cannabis (NASDAQ: ACB) -- up 7.9%, 7.5%, and 6.7%, respectively, as of 1 p.m. As Black explained, President Biden's order for the U.S. government to "expeditiously" review the case for rescheduling marijuana from a Schedule I drug to a less restrictive level is something less than a move for full-scale legalization -- but also "more than just an empty gesture." Black called this a "unique ... and powerful" statement that implies that Biden wants rescheduling of the drug to happen "quickly." |
36470.0 | 2022-10-14 00:00:00 UTC | Which Company Will Become Profitable First: Canopy Growth or Aurora Cannabis? | ACB | https://www.nasdaq.com/articles/which-company-will-become-profitable-first%3A-canopy-growth-or-aurora-cannabis | nan | nan | Canadian cannabis companies Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have been rivals even before the recreational market in Canada opened in 2018. While the companies are still trying to get bigger and generate more sales, growing competition has made it difficult to dominate in a saturated Canadian market. As a result, their shares are down 80% and 72%, respectively, this year.
The companies have shifted their focus toward profitability to give investors something positive to rally around. Both businesses aim to become profitable on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis -- but which one will get there first?
Canopy Growth to be profitable by next year?
On Aug. 5, pot producer Canopy Growth released its first-quarter results for fiscal 2023. For the period ending June 30, the company reported that its net revenue of 110.1 million Canadian dollars was down 19% year over year. Its adjusted EBITDA loss also swelled to CA$74.8 million -- up from a negative CA$63.6 million in the prior-year period. The company blamed the worsening bottom line on a decline in gross margin, which it says was offset by a reduction in selling, general, and administrative expenses.
Earlier this year, the company projected that in the next fiscal year, 2024, it will achieve positive adjusted EBITDA. However, this excludes investments it plans to make in Biosteel (which makes nutrition products) and the recreational U.S. pot market, which is currently off-limits due to the federal ban on marijuana. Based on the asterisks that come with this target, a more realistic goal for adjusted EBITDA profitability without any conditions appears to be fiscal 2025 at the earliest; should the U.S. market open up before then, an increase in spending would be sure to follow.
Aurora seems to be the safer bet for profitability
Last month, it was Aurora's turn to release its results. Its numbers were for the same period (June 30) but were for its fourth quarter of fiscal 2022. Like its rival, Aurora struggled with growth as net sales of CA$50.2 million were down 8% year over year.
Its adjusted EBITDA loss of CA$12.9 million was down from the CA$21.8 million loss it incurred in the prior-year period. However, on a quarter-over-quarter basis, it was up slightly from a loss of CA$11.4 million. Aurora remains in cost-cutting mode and believes that by the end of the current calendar year, it will attain annualized cost savings of up to CA$170 million. And at that point, the business says it will be at a positive adjusted EBITDA run rate.
If that turns out to be true, then Aurora could very well be on track to beat Canopy Growth. However, Aurora has missed expectations in the past. Two years ago, it projected that by the second quarter of fiscal 2021, it would achieve positive adjusted EBITDA.
Although Aurora may miss its goal again, it looks to be close enough to adjusted EBITDA profitability that it will still get there well before its rival, especially since Canopy Growth looks intent on investing in growth opportunities in Biosteel and the U.S. pot market. Aurora, meanwhile, looks to be focusing on the medical marijuana market, which may lead to better margins but will likely result in less attractive growth opportunities in the long run.
Which stock is a better buy in the long run?
Even if Aurora hits its goal of adjusted EBITDA profitability before Canopy Growth, that still won't make the stock a better buy. Achieving adjusted profitability doesn't eliminate the risk (the company could still be burning through cash), and there's no reason to expect that doing so would fix its growth problems, either.
With Constellation Brands backing its business and sitting on nearly CA$770 million in cash and cash equivalents, Canopy Growth is the safer stock to buy. By comparison, Aurora reported CA$488.8 million in cash at the end of June. In addition, Canopy Growth's relationships in the U.S. with Acreage Holdings, Wana Brands, and TerrAscend, which should allow it to quickly penetrate the market south of the border upon legalization, give it a distinct advantage over Aurora in the long run.
Adjusted EBITDA profitability is a goal for both of these cannabis companies, but investors shouldn't give it too much attention as achieving it will not necessarily make one business a better buy than the other. Canopy Growth has a clear advantage in the end due to its more plentiful growth opportunities and with a significant investor in Constellation Brands.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Brands. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Canadian cannabis companies Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have been rivals even before the recreational market in Canada opened in 2018. Based on the asterisks that come with this target, a more realistic goal for adjusted EBITDA profitability without any conditions appears to be fiscal 2025 at the earliest; should the U.S. market open up before then, an increase in spending would be sure to follow. Aurora remains in cost-cutting mode and believes that by the end of the current calendar year, it will attain annualized cost savings of up to CA$170 million. | Canadian cannabis companies Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have been rivals even before the recreational market in Canada opened in 2018. Even if Aurora hits its goal of adjusted EBITDA profitability before Canopy Growth, that still won't make the stock a better buy. With Constellation Brands backing its business and sitting on nearly CA$770 million in cash and cash equivalents, Canopy Growth is the safer stock to buy. | Canadian cannabis companies Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have been rivals even before the recreational market in Canada opened in 2018. Although Aurora may miss its goal again, it looks to be close enough to adjusted EBITDA profitability that it will still get there well before its rival, especially since Canopy Growth looks intent on investing in growth opportunities in Biosteel and the U.S. pot market. Even if Aurora hits its goal of adjusted EBITDA profitability before Canopy Growth, that still won't make the stock a better buy. | Canadian cannabis companies Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have been rivals even before the recreational market in Canada opened in 2018. Like its rival, Aurora struggled with growth as net sales of CA$50.2 million were down 8% year over year. Although Aurora may miss its goal again, it looks to be close enough to adjusted EBITDA profitability that it will still get there well before its rival, especially since Canopy Growth looks intent on investing in growth opportunities in Biosteel and the U.S. pot market. |
36471.0 | 2022-10-13 00:00:00 UTC | Why Pot Stocks Could Be Your Best Bear Market Buy | ACB | https://www.nasdaq.com/articles/why-pot-stocks-could-be-your-best-bear-market-buy | nan | nan | If you're not buying shares of companies that are likely to succeed in the long term during this (short-term) bear market, there's a good chance that fear of losing your money is getting the better of you. Of course, when your fear of losing money is getting in the way of making more in the future, it's a bit of a self-fulfilling prophecy, and preventing that outcome is one reason right now might be a brilliant time to start investing more heavily in beaten-down cannabis stocks.
That's right, even with the industry-tracking AdvisorShares Pure U.S. Cannabis ETF down by more than 66.5% compared to the market's decline of only 16.4% in the last 12 months, marijuana companies could still go on to flourish in the coming years, making the investors who are brave enough to buy shares during this bear market into richer versions of themselves. There are (at least) two big arguments in favor of buying pot stocks right now, so let's take a beat to understand both.
Valuations are at rock bottom and still falling
Especially if you like a bargain, there's no time like the present for finding cannabis stocks with cheap valuations. The Nasdaq's price-to-sales (P/S) ratio is currently 4.9. With that figure in mind, take a look at this chart of the marijuana industry's leading companies like Tilray Brands, (NASDAQ: TLRY) Cresco Labs, and Canopy Growth:
TLRY PS Ratio data by YCharts.
As you can see, shares of all of these businesses are selling for significantly lower than the Nasdaq's average. Plus, as a result of plummeting stock prices, all of them are much less expensive per dollar of revenue compared to this time last year, never mind the cannabis stock heyday of early 2021.
What this means is you'll likely be getting more for your money when you invest in cannabis than you might be with an investment in another growth industry. For example, in biopharma, the average P/S multiple is 5.3, so cannabis looks especially inexpensive.
Legalization is inching closer to reality in major markets
The other major reason to invest in marijuana stocks during the bear market is that marijuana legalization may be on the way in both the U.S. and the E.U. On Oct. 6, the Biden Administration released a statement announcing the intent to pardon federal convictions for marijuana possession. The statement also directed the attorney general and the secretary of the Department of Health and Human Services (HHS) to review whether marijuana, which is currently classified as a Schedule I drug just like heroin, is appropriately scheduled. If authorities find that cannabis is inappropriately scheduled given the scale of its social and health impacts, it could lead to huge steps forward in federal decriminalization or perhaps even outright legalization, both of which would be positive for cannabis stocks, to say the least.
In the E.U., both Malta and Luxembourg legalized cannabis in late 2021. Excitingly, Germany is working to legalize the plant for recreational use, and its government intends to be done drafting the relevant laws and regulations by the end of 2022 or perhaps in early 2023. Currently, its medicinal market is served by multinational cultivators like Tilray, which is an active partner in the policymaking process.
So, buying shares of Tilray right now might be a favorable way to get a bargain and position your portfolio to gain from legalization there at the same time, and the same is likely true for investments in other cannabis businesses that aspire to penetrate the E.U. market, like Aurora Cannabis. The catch is that you'll need to tough it out during the remainder of the bear market, and there's no telling precisely when it'll end.
Just remember: The depressed valuations of today are likely to adjust upward when major markets open for recreational sales for the first time. If you're not willing to take a chance on cannabis stocks today, the chances of getting a similarly appealing combination of events and trends in the future will be much lower.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cresco Labs Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, when your fear of losing money is getting in the way of making more in the future, it's a bit of a self-fulfilling prophecy, and preventing that outcome is one reason right now might be a brilliant time to start investing more heavily in beaten-down cannabis stocks. Excitingly, Germany is working to legalize the plant for recreational use, and its government intends to be done drafting the relevant laws and regulations by the end of 2022 or perhaps in early 2023. So, buying shares of Tilray right now might be a favorable way to get a bargain and position your portfolio to gain from legalization there at the same time, and the same is likely true for investments in other cannabis businesses that aspire to penetrate the E.U. | With that figure in mind, take a look at this chart of the marijuana industry's leading companies like Tilray Brands, (NASDAQ: TLRY) Cresco Labs, and Canopy Growth: TLRY PS Ratio data by YCharts. Legalization is inching closer to reality in major markets The other major reason to invest in marijuana stocks during the bear market is that marijuana legalization may be on the way in both the U.S. and the E.U. If you're not willing to take a chance on cannabis stocks today, the chances of getting a similarly appealing combination of events and trends in the future will be much lower. | That's right, even with the industry-tracking AdvisorShares Pure U.S. Cannabis ETF down by more than 66.5% compared to the market's decline of only 16.4% in the last 12 months, marijuana companies could still go on to flourish in the coming years, making the investors who are brave enough to buy shares during this bear market into richer versions of themselves. Legalization is inching closer to reality in major markets The other major reason to invest in marijuana stocks during the bear market is that marijuana legalization may be on the way in both the U.S. and the E.U. If authorities find that cannabis is inappropriately scheduled given the scale of its social and health impacts, it could lead to huge steps forward in federal decriminalization or perhaps even outright legalization, both of which would be positive for cannabis stocks, to say the least. | That's right, even with the industry-tracking AdvisorShares Pure U.S. Cannabis ETF down by more than 66.5% compared to the market's decline of only 16.4% in the last 12 months, marijuana companies could still go on to flourish in the coming years, making the investors who are brave enough to buy shares during this bear market into richer versions of themselves. As you can see, shares of all of these businesses are selling for significantly lower than the Nasdaq's average. Legalization is inching closer to reality in major markets The other major reason to invest in marijuana stocks during the bear market is that marijuana legalization may be on the way in both the U.S. and the E.U. |
36472.0 | 2022-10-12 00:00:00 UTC | 2 Reasons to Buy Innovative Industrial Properties Stock, and 1 Reason to Sell | ACB | https://www.nasdaq.com/articles/2-reasons-to-buy-innovative-industrial-properties-stock-and-1-reason-to-sell | nan | nan | As one of the few cannabis stocks to beat the market over the last three years, with a return of 36.7% compared to the market's 29.1%, there's more than one way in which Innovative Industrial Properties (NYSE: IIPR) isn't a typical marijuana business. Instead of selling buds or other cannabis products to consumers, it buys and leases out cultivation spaces that the industry's growers need to compete.
And that's why it can sit back and collect rent from its tenants for years, whereas they need to constantly develop their brands and right-size their retail footprints in light of consumer preferences and shifting patterns of demand. Let's look at two arguments for buying IIP's shares and one for selling so that you'll appreciate its wealth-building potential.
It's an aggressive dividend hiker
At the moment, one of the biggest reasons to buy shares of Innovative Industrial Properties is its dividend, which has a decently high forward yield of 7.9%. As a real estate investment trust (REIT), the company pays for its dividend using rental income from its portfolio of cannabis cultivation properties. To get those cultivation spaces in the first place, it does sale-leaseback transactions wherein it buys real estate from cannabis businesses and then leases the new purchase back to the original owner, who then becomes a rent-paying tenant.
So, because rents roll in every month from tenants and annual rent increases are baked into each of IIP's leases, its revenue performance is very reliable, as are its earnings. That forms the basis of financial stability that enables management to increase the dividend safely because tenants are typically on the hook for a lease term between 15 and 20 years. Over the last five years, IIP hiked its dividend by 620%, and it most recently grew its payout in Q3 by an impressive 25% year over year. And such a rapid pace of dividend growth is a major draw for investors, to say the least.
Businesses need to take a lot of damage before they default on rent
Investing in cannabis stocks is often frustrating because many of the largest pure-play marijuana companies are unprofitable or otherwise poorly performing. In recent years, major players like Aurora Cannabis and Tilray Brands have slashed their workforces and production capacity while reporting stiff losses for quarters and quarters on end.
But Innovative Industrial Properties doesn't need to worry about whether consumers like its marijuana products because it doesn't sell any. It only needs to concern itself with whether its tenants can continue to pay rent. And you can bet your hat that most cannabis businesses would prefer to cut costs by scaling down production, laying off workers, or any number of other fixes before they'd be willing to default on their rent or break their leases.
Even if the industry gets hit hard by falling demand caused by a recession or by burdensome new regulations, IIP's base of revenue will be somewhat insulated from negative impacts. Therefore, the company is a good option to buy for investors who want exposure to the growth potential of the marijuana industry without taking on as much direct exposure to the risks carried by the actual producers.
Now, let's look at one argument for selling your shares.
A severe recession could easily prompt more defaults and harm the top line
Let's confront the elephant in the room (and a decent reason to think about selling): the Kings Garden default. Earlier this year, Kings Garden, a marijuana cultivator, failed to pay its rent on time, and after Innovative Industrial Properties filed a lawsuit, the two businesses settled out of court on Sept. 11. Kings Garden's rental income accounted for around 8% of IIP's revenue in 2021, making it the REIT's fourth-largest tenant.
The failure of Kings Garden might seem like it directly undermines the idea that IIP is a relatively stable place to park your money. After all, it's pretty frightening to think that such a large portion of its top line could suddenly disappear. Plus, in the event of a severe recession in which consumers buy fewer cannabis products, it's hard to see how the company's tenants could remain in good enough shape to keep paying rent on time.
And while it's impossible to predict whether any other tenants might skip out on rent (many are private and don't disclose financial information publicly), skittish investors could avoid the problem entirely by selling their shares. But they'll miss out on what might be decades of growth and dividend payments if they do, so it probably isn't a good idea for most shareholders.
10 stocks we like better than Innovative Industrial Properties
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Alex Carchidi has positions in Innovative Industrial Properties. The Motley Fool has positions in and recommends Innovative Industrial Properties. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And that's why it can sit back and collect rent from its tenants for years, whereas they need to constantly develop their brands and right-size their retail footprints in light of consumer preferences and shifting patterns of demand. Businesses need to take a lot of damage before they default on rent Investing in cannabis stocks is often frustrating because many of the largest pure-play marijuana companies are unprofitable or otherwise poorly performing. Earlier this year, Kings Garden, a marijuana cultivator, failed to pay its rent on time, and after Innovative Industrial Properties filed a lawsuit, the two businesses settled out of court on Sept. 11. | Instead of selling buds or other cannabis products to consumers, it buys and leases out cultivation spaces that the industry's growers need to compete. As a real estate investment trust (REIT), the company pays for its dividend using rental income from its portfolio of cannabis cultivation properties. Earlier this year, Kings Garden, a marijuana cultivator, failed to pay its rent on time, and after Innovative Industrial Properties filed a lawsuit, the two businesses settled out of court on Sept. 11. | As one of the few cannabis stocks to beat the market over the last three years, with a return of 36.7% compared to the market's 29.1%, there's more than one way in which Innovative Industrial Properties (NYSE: IIPR) isn't a typical marijuana business. But Innovative Industrial Properties doesn't need to worry about whether consumers like its marijuana products because it doesn't sell any. Earlier this year, Kings Garden, a marijuana cultivator, failed to pay its rent on time, and after Innovative Industrial Properties filed a lawsuit, the two businesses settled out of court on Sept. 11. | Instead of selling buds or other cannabis products to consumers, it buys and leases out cultivation spaces that the industry's growers need to compete. Plus, in the event of a severe recession in which consumers buy fewer cannabis products, it's hard to see how the company's tenants could remain in good enough shape to keep paying rent on time. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Innovative Industrial Properties wasn't one of them! |
36473.0 | 2022-10-12 00:00:00 UTC | Which Cannabis Stocks Would Benefit Most From U.S. Federal Legalization? | ACB | https://www.nasdaq.com/articles/which-cannabis-stocks-would-benefit-most-from-u.s.-federal-legalization | nan | nan | Last week, cannabis stocks jumped on news that President Joe Biden was issuing pardons for thousands of people who have been convicted of simple marijuana possession in federal court, and said that the government would begin a review of how pot is legally classified. Currently, it's a Schedule 1 substance like heroin, so legally, it is treated as a highly dangerous drug that has no acceptable medical uses. Biden also urged governors to pardon people convicted of marijuana possession at the state level.
These were huge developments in the cannabis reform narrative, and the most significant signs yet from the Biden administration that marijuana reform -- and possibly even legalization -- could be on the horizon.
While legalization would open up opportunities for all cannabis companies, some are better positioned to gain than others. Here's a look at some of the different positions those companies are in and what legalization might mean for them.
Cannabis companies with pending deals with U.S. companies
Some Canadian cannabis producers have preemptively inked acquisition deals for U.S. companies that will remain on hold until and unless pot is federally legalized. But as soon as legalization occurs, those deals can be executed at once. These are the stocks that will have the most to gain in the short term if and when legalization takes place.
Arguably, the Canadian company best positioned for legalization is Canopy Growth (NASDAQ: CGC). The cannabis producer first arranged a deal contingent on marijuana legalization in the U.S. back in 2019, when it announced it would merge with Acreage Holdings. That multi-state operator (MSO) has 27 dispensaries in 10 states, and buying it would give Canopy Growth an instant presence in the U.S. market. Canopy Growth has other similar contingent deals to acquire edibles maker Wana Brands and take a stake in MSO TerrAscend.
Cannabis producer Tilray Brands (NASDAQ: TLRY) also has a lot to gain from U.S. legalization. Last year, the Canadian company acquired convertible notes in the MSO MedMen Enterprises. Once legalization happens, Tilray can convert those notes into shares and take a minority position in MedMen. However, at the time of the announcement, Tilray CEO Irwin Simon hinted that the deal could lead to it taking a much larger position in the business. "Ultimately, once legalization happens, it gives us the potential to own a great company that we can ultimately take into the rest of the world," he said. MedMen currently operates in six states and has more than 25 locations.
MSOs will gain greater flexibility
Due to all the wheeling and dealing by the companies noted above, it can be easy to overlook the MSOs currently operating in the U.S. But make no mistake, stocks such as Cresco Labs, Curaleaf Holdings, and Trulieve Cannabis have potentially even greater upsides.
If legalization takes place, those businesses will be able to more easily access banking services, obtain loans, and expand organically. They would be able to move their products across state lines, and expanding into a new state would no longer require them to acquire a company that was already operating there.
Also, MSOs would be able to list their stocks on major exchanges such as the NYSE and Nasdaq. That would give them more visibility to investors and their shares would be more liquid -- both huge benefits.
Lastly, upon legalization, big pharma and big tobacco companies would be able to acquire MSOs, which isn't something that's feasible today.
These stocks may not stand to benefit as much
Then there are the companies that aren't operating in the U.S. and that won't be ready to jump quickly into the domestic market following legalization. Aurora Cannabis and SNDL fall into that category, and investors shouldn't expect their shares to take off should the U.S. legalize pot.
In the case of Aurora, it has been focusing on the medical marijuana market, and although it did acquire Reliva, a U.S.-based hemp-focused, in 2020, that pales in comparison to the positions of Tilray and Canopy Growth. Aurora may benefit from U.S. legalization, but it likely won't have a significant impact on its business.
For SNDL, the focus has been on expansion within Canada and diversifying its business there. Changes in the U.S. would have a limited immediate impact on it.
Marijuana legalization would help many pot stocks, but not all of them are buys
If and when marijuana legalization takes place, plenty of pot stocks should surge in value. However, investors who are bullish on legalization shouldn't assume that such a change would bring more prosperity to every player in the space.
The best bet for those seeking exposure to the space would be to invest in top MSOs such as Curaleaf, Cresco Labs, or Trulieve Cannabis. Legalization will simplify their operations and make their shares more accessible. While Canadian-based companies Canopy Growth and Tilray Brands would definitely benefit from legalization, I'm not convinced of the quality of the deals they have made. (MedMen and Acreage are much riskier and smaller than the big MSOs in the U.S.)
It's also important to remember that -- recent news notwithstanding -- it's still far from guaranteed that cannabis legalization (or even major reform) will happen in the U.S. anytime soon. Legislation takes time to develop and work its way through Washington. So if you decide to buy shares of any of these companies based on the hope that marijuana will become federally legal, you'll need to be prepared to wait for that bet to pay off.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has positions in Cresco Labs Inc. The Motley Fool has positions in and recommends Cresco Labs Inc. and Trulieve Cannabis Corp. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Last week, cannabis stocks jumped on news that President Joe Biden was issuing pardons for thousands of people who have been convicted of simple marijuana possession in federal court, and said that the government would begin a review of how pot is legally classified. In the case of Aurora, it has been focusing on the medical marijuana market, and although it did acquire Reliva, a U.S.-based hemp-focused, in 2020, that pales in comparison to the positions of Tilray and Canopy Growth. (MedMen and Acreage are much riskier and smaller than the big MSOs in the U.S.) It's also important to remember that -- recent news notwithstanding -- it's still far from guaranteed that cannabis legalization (or even major reform) will happen in the U.S. anytime soon. | Cannabis producer Tilray Brands (NASDAQ: TLRY) also has a lot to gain from U.S. legalization. Last year, the Canadian company acquired convertible notes in the MSO MedMen Enterprises. But make no mistake, stocks such as Cresco Labs, Curaleaf Holdings, and Trulieve Cannabis have potentially even greater upsides. | Cannabis companies with pending deals with U.S. companies Some Canadian cannabis producers have preemptively inked acquisition deals for U.S. companies that will remain on hold until and unless pot is federally legalized. Marijuana legalization would help many pot stocks, but not all of them are buys If and when marijuana legalization takes place, plenty of pot stocks should surge in value. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | Cannabis companies with pending deals with U.S. companies Some Canadian cannabis producers have preemptively inked acquisition deals for U.S. companies that will remain on hold until and unless pot is federally legalized. Aurora may benefit from U.S. legalization, but it likely won't have a significant impact on its business. Marijuana legalization would help many pot stocks, but not all of them are buys If and when marijuana legalization takes place, plenty of pot stocks should surge in value. |
36474.0 | 2022-10-11 00:00:00 UTC | 2 Marijuana Stocks to Buy Hand Over Fist and 2 to Avoid Like the Plague | ACB | https://www.nasdaq.com/articles/2-marijuana-stocks-to-buy-hand-over-fist-and-2-to-avoid-like-the-plague | nan | nan | If you think it's a challenging time for Wall Street, take a closer look at how poorly marijuana stocks have performed since February 2021. With federal cannabis reforms failing to materialize, pot stocks quickly went from the hottest thing on Wall Street to absolute buzzkills. But that may be about to change.
Last week, President Joe Biden made an address on marijuana that involved pardoning simple cannabis possession offenses, and encouraged Attorney General Merrick Garland and Health and Human Services Secretary Xavier Becerra to review marijuana's current scheduling under the Controlled Substances Act. In other words, the president took the first steps to potentially legalizing marijuana at the federal level.
Image source: Getty Images.
Cannabis is a massive global opportunity. Research firm BDSA has forecast a compound annual growth rate of more than 16% for the industry through 2026. If accurate, the global weed market would be worth $61 billion in 2026, with a majority of these sales originating in the United States. In other words, the beatdown that pot stocks have endured has rolled out the red carpet for opportunistic investors.
Here are two marijuana stocks investors can confidently buy hand over fist, as well as two other pot stocks that might look like intriguing values, but should be avoided like the plague.
Marijuana stock No. 1 to buy hand over fist: Innovative Industrial Properties
The first weed stock that investors should have no issue buying hand over fist during the bear market pullback is cannabis-focused real estate investment trust (REIT) Innovative Industrial Properties (NYSE: IIPR).
Just like any REIT, IIP, as Innovative Industrial Properties is more commonly known, aims to buy properties that it can lease for a lengthy period. The only difference is that IIP is looking to acquire and lease medical marijuana cultivation and processing facilities. Since marijuana is federally illicit, cannabis can't be transported across state lines. This means there's a big need for cultivation and processing facilities in all legalized states.
As of early September, IIP owned 111 properties spanning 8.7 million square feet of rentable space in 19 legalized states. Given that many of its leases are for 10 to 20 years, the cash flow it's generating is highly predictable. Through the midpoint of 2022, IIP was collecting 99% of its rents on time.
Interestingly, the lack of cannabis reform on Capitol Hill has actually been a positive for Innovative industrial Properties. With weed illegal at the federal level, access to credit markets has been spotty for pot stocks. IIP has stepped in with its sale-leaseback program to allay these concerns. IIP acquires facilities with cash and immediately leases these properties back to the seller. It's a win-win that puts cash in the pockets of multi-state operators (MSOs) while landing IIP long-term tenants.
Innovative Industrial Properties is sporting a forward P/E of 15 and a yield of nearly 8%. That makes it an incredible buy for growth, value, and income investors alike.
Marijuana stock No. 2 to buy hand over fist: Cresco Labs
A second marijuana stock to buy hand over fist at the moment is U.S. MSO Cresco Labs (OTC: CRLBF). Despite a lack of cannabis reform progress in the U.S., Cresco Labs has three catalysts that can send its shares notably higher.
First, Cresco's retail expansion is predominantly focused on limited-license markets. Although it's in a number of high-dollar states, entering limited-license markets is a strategically smart move. States where regulators limit how many dispensary licenses are issued in total, as well as to a single company, ensures that (currently) smaller retail players like Cresco have an opportunity to build up their brands and garner a loyal following.
The second big catalyst is the pending acquisition of MSO Columbia Care (OTC: CCHWF). Assuming this all-share buyout completes in the coming weeks, the combined company will have over 130 operating dispensaries spanning 18 states. For context, Cresco has 51 open dispensaries in 10 states right now. A bigger retail footprint would certainly be a long-term positive for the company.
Third, Cresco Labs has the industry's leading wholesale cannabis segment. Wall Street isn't a big fan of wholesale operations because of their lower margins, compared to the retail side of the equation. But Cresco has volume on its side. It holds one of only a few cannabis distribution licenses in California, which allows it to place its proprietary pot products into more than 575 dispensaries throughout the Golden State.
Assuming its merger with Columbia Care goes smoothly, Cresco Labs could quickly become a juggernaut in the U.S. MSO landscape.
Image source: Getty Images.
Pot stock No. 1 to avoid like the plague: Aurora Cannabis
But just because marijuana is shaping up to be one of the fastest-growing industries of the decade doesn't mean every pot stock is worth buying. Canadian licensed producer Aurora Cannabis (NASDAQ: ACB) is exhibit 1A of why you shouldn't blindly invest in a fast-paced industry.
As recently as 2019, Aurora Cannabis was believed to have a shot at becoming the world's most prominent pot stock. It had 15 potential production facilities and was expected to lean on exports to move what could easily have been well over 600,000 kilos of annual output. Unfortunately, this utopian scenario didn't even come close to fruition.
Over the past three years, Aurora Cannabis has closed production facilities, completely written down billions of dollars in goodwill after making roughly a dozen grossly overpriced acquisitions, and slashed its selling, general, and administrative expenses. Even with these actions, the company continues to lose money. A combination of Canadian consumers favoring lower-margin dried cannabis flower and regulators slow-stepping the rollout of dispensary licenses in Ontario have ensured ongoing losses for Aurora.
To make matters worse for its shareholders, Aurora Cannabis's only means to raise capital has been to persistently issue shares of its common stock. Between June 30, 2014, and June 30, 2022, the company's reverse-split-adjusted outstanding share count ballooned from about 1.3 million to approximately 297.8 million. The magnitude of this dilution, coupled with its chronic operating underperformance, has Aurora Cannabis stock on the verge of dipping below $1 per share once more.
Although it was once a highly popular pot stock, Aurora Cannabis is absolutely a stock to avoid in the fast-paced weed industry.
Pot stock No. 2 to avoid like the plague: SNDL
The second pot stock to avoid like the plague is none other than SNDL (NASDAQ: SNDL), the company formerly known as Sundial Growers. Though SNDL is a favorite of retail traders and meme investors, there's very little that's redeeming about the company.
When SNDL first became a publicly traded company in 2019, it was relatively undecipherable from other Canadian pot stocks. It primarily focused on wholesale cannabis, with management making the decision not long thereafter to pivot to retail sales because of its higher margin potential.
What's made SNDL such a popular but polarizing business is its capital-raising activities. Starting Oct. 1, 2020, SNDL began selling stock to raise cash and pay off its debt. But the company didn't stop once it secured the capital to cover its outstanding debt. In less than two years, SNDL's share count soared from a pre-split 509 million to about 2.33 billion. Not surprisingly, SNDL spent a year rangebound between $0.30 and $0.90 before enacting a 1-for-10 reverse split to remain listed on the Nasdaq stock exchange.
While it's understandable that some investors appreciate SNDL's hearty cash position and its desire to buy other marijuana businesses, management raised this capital with no particular plan in mind. Following a couple of acquisitions, SNDL's outlook remains cloudy. The company's cash pile has shrunk as losses have continued, which raises the likelihood that SNDL could turn to additional stock issuances to boost its cash position.
With the risk of ongoing dilution being a constant menace, investors would be wise to keep their distance from SNDL.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Sean Williams has positions in Columbia Care and Innovative Industrial Properties. The Motley Fool has positions in and recommends Cresco Labs Inc. and Innovative Industrial Properties. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Canadian licensed producer Aurora Cannabis (NASDAQ: ACB) is exhibit 1A of why you shouldn't blindly invest in a fast-paced industry. States where regulators limit how many dispensary licenses are issued in total, as well as to a single company, ensures that (currently) smaller retail players like Cresco have an opportunity to build up their brands and garner a loyal following. Over the past three years, Aurora Cannabis has closed production facilities, completely written down billions of dollars in goodwill after making roughly a dozen grossly overpriced acquisitions, and slashed its selling, general, and administrative expenses. | Canadian licensed producer Aurora Cannabis (NASDAQ: ACB) is exhibit 1A of why you shouldn't blindly invest in a fast-paced industry. 1 to buy hand over fist: Innovative Industrial Properties The first weed stock that investors should have no issue buying hand over fist during the bear market pullback is cannabis-focused real estate investment trust (REIT) Innovative Industrial Properties (NYSE: IIPR). 2 to buy hand over fist: Cresco Labs A second marijuana stock to buy hand over fist at the moment is U.S. MSO Cresco Labs (OTC: CRLBF). | Canadian licensed producer Aurora Cannabis (NASDAQ: ACB) is exhibit 1A of why you shouldn't blindly invest in a fast-paced industry. 1 to buy hand over fist: Innovative Industrial Properties The first weed stock that investors should have no issue buying hand over fist during the bear market pullback is cannabis-focused real estate investment trust (REIT) Innovative Industrial Properties (NYSE: IIPR). Although it was once a highly popular pot stock, Aurora Cannabis is absolutely a stock to avoid in the fast-paced weed industry. | Canadian licensed producer Aurora Cannabis (NASDAQ: ACB) is exhibit 1A of why you shouldn't blindly invest in a fast-paced industry. Although it was once a highly popular pot stock, Aurora Cannabis is absolutely a stock to avoid in the fast-paced weed industry. 2 to avoid like the plague: SNDL The second pot stock to avoid like the plague is none other than SNDL (NASDAQ: SNDL), the company formerly known as Sundial Growers. |
36475.0 | 2022-10-10 00:00:00 UTC | Why Aurora Cannabis, Canopy Growth, and Curaleaf Stocks Just Dropped | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-growth-and-curaleaf-stocks-just-dropped | nan | nan | What happened
Marijuana stocks opened largely lower on Monday, as investors parse the implications of President Joe Biden's moves last week to pardon federal convictions for marijuana possession, and potentially change marijuana from a Schedule I narcotic to something a bit less illegal.
As of 11:45 a.m. ET today, Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down 11.3% and 10.3%, respectively. Meanwhile, Curaleaf Holdings (OTC: CURLF) -- which is actually bigger by market capitalization than both of those better-known cannabis stocks combined (but lower profile because it's not Nasdaq-listed) -- is off by only 1.8%.
So what
Curaleaf might still be benefiting from the prediction voiced by investment bank Stifel Nicolaus on Friday that some of the less-popular marijuana stocks such as Curaleaf could potentially triple in price if a rescheduling of marijuana helps to pass the SAFE Banking Act, which will permit banks to do business with marijuana companies in the U.S. This could explain why its decline today is not as steep as the declines of other cannabis companies.
Canopy and Aurora, on the other hand, could be reacting to a more detailed analysis by Reuters of what rescheduling could mean for the marijuana industry as a whole.
Over the weekend, Reuters said that as a Schedule I drug, marijuana currently cannot be prescribed by doctors as a medicine under federal law. But 37 states do permit medical marijuana prescriptions under their own laws.
Should marijuana be changed to a Schedule II drug, however, it could be prescribed as medicine. And if the government goes even further and makes weed a Schedule V drug, for example, it could even be sold over the counter like cough syrup.
Now what
That all sounds like good news for marijuana stocks: easier access, more sales, and therefore more profit. So why are these stocks going down today?
As Reuters goes on to explain, no matter how marijuana gets recategorized, as long as it is a scheduled drug at all, federal marijuana laws will continue to conflict with state marijuana laws -- even for medical marijuana. And that means recreational marijuana sales would remain illegal.
And reclassifying pot would subject medical marijuana to Food and Drug Administration (FDA) regulation and approval procedures, Reuters points out, with the potential result that big pharma might have the most to gain because of its familiarity with the FDA approval process.
If that's the case, then marijuana companies like Canopy, Aurora, and Curaleaf might find themselves squeezed out of the marijuana market, or relegated to being producers of commodity raw materials, while the large drug companies step in to reap most of the profits.
It's that risk, I imagine, that's worrying marijuana investors this morning. Unprofitable today, cannabis companies could remain unprofitable even if marijuana legalization advances -- at least in the direction it's heading today.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ET today, Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down 11.3% and 10.3%, respectively. Meanwhile, Curaleaf Holdings (OTC: CURLF) -- which is actually bigger by market capitalization than both of those better-known cannabis stocks combined (but lower profile because it's not Nasdaq-listed) -- is off by only 1.8%. Canopy and Aurora, on the other hand, could be reacting to a more detailed analysis by Reuters of what rescheduling could mean for the marijuana industry as a whole. | ET today, Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down 11.3% and 10.3%, respectively. Unprofitable today, cannabis companies could remain unprofitable even if marijuana legalization advances -- at least in the direction it's heading today. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | ET today, Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down 11.3% and 10.3%, respectively. What happened Marijuana stocks opened largely lower on Monday, as investors parse the implications of President Joe Biden's moves last week to pardon federal convictions for marijuana possession, and potentially change marijuana from a Schedule I narcotic to something a bit less illegal. So what Curaleaf might still be benefiting from the prediction voiced by investment bank Stifel Nicolaus on Friday that some of the less-popular marijuana stocks such as Curaleaf could potentially triple in price if a rescheduling of marijuana helps to pass the SAFE Banking Act, which will permit banks to do business with marijuana companies in the U.S. | ET today, Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down 11.3% and 10.3%, respectively. Should marijuana be changed to a Schedule II drug, however, it could be prescribed as medicine. So why are these stocks going down today? |
36476.0 | 2022-10-07 00:00:00 UTC | Why Tilray, Canopy Growth, and Aurora All Crashed Friday | ACB | https://www.nasdaq.com/articles/why-tilray-canopy-growth-and-aurora-all-crashed-friday | nan | nan | What happened
After soaring in late trading Thursday, Canadian pot stocks Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) are plunging Friday. As of 11:20 a.m. ET, Tilray shares were down 15.8%, Canopy was down 17.8%, and Aurora stock dropped 12%.
So what
Cannabis stocks took off Thursday after President Joe Biden announced he was pardoning thousands of people who had federal convictions for simple marijuana possession, and -- perhaps more importantly -- said he had initiated a government review on how the drug is classified. Marijuana is currently classified as a Schedule 1 drug. That's the same level as heroin, and a higher level than fentanyl or methamphetamine. A reclassification could potentially allow Canadian marijuana companies to enter the U.S. market.
Image source: Getty Images.
In August, Tilray CEO Irwin Simon told Yahoo Finance that he believes federal legalization in the U.S. would open up a $100 billion opportunity for Canadian growers. But after investors digested the news from Thursday, some decided to take profits Friday. Tilray also likely didn't boost short-term bullish sentiment when it reported its fiscal 2023 first-quarter results Friday morning: It missed analysts' estimates on both the top and bottom lines. Even with Friday morning's drop, however, Tilray was still up 19% for the week as of this writing.
Now what
Tilray reported revenue of $153.2 million and a net loss of $0.13 per share for its fiscal Q1, which ended Aug. 31. Analysts had expected revenue of about $156 million and a loss of $0.07 per share. The company said it was continuing to work on cost savings initiatives and believes it is still positioned to hit its previous guidance for adjusted EBITDA in the $70 million to $80 million range this fiscal year. It also confirmed it believes it will be free cash flow positive in its operating business units for the year.
The news from Washington is still holding investors' attention Friday, even if cannabis stocks have given back some of their gains. Tilray and Canopy have both been working to establish frameworks of businesses in the U.S. in anticipation of potential full federal legalization. Tilray owns craft brewer SweetWater Brewing, Breckenridge Distillery, and hemp products company Manitoba Harvest in the U.S. It says those brands are profitable in their own rights, but they could also serve as valuable infrastructure for its cannabis sales operations in the future.
Canopy Growth also has an ecosystem already operating in the United States. Its Acreage Holdings and Wana brands participate in the recreational cannabis market in states that have legalized marijuana for adult use, and are expanding across North America.
All the Canadian growers would love to see federal legalization occur. The spikes in their share prices after President Biden's actions show how much investors believe that opening up the U.S. market could be a game changer for those companies. There is still not a clear path in Washington for that to happen, however.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Howard Smith has positions in Tilray, Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened After soaring in late trading Thursday, Canadian pot stocks Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) are plunging Friday. So what Cannabis stocks took off Thursday after President Joe Biden announced he was pardoning thousands of people who had federal convictions for simple marijuana possession, and -- perhaps more importantly -- said he had initiated a government review on how the drug is classified. In August, Tilray CEO Irwin Simon told Yahoo Finance that he believes federal legalization in the U.S. would open up a $100 billion opportunity for Canadian growers. | What happened After soaring in late trading Thursday, Canadian pot stocks Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) are plunging Friday. Tilray and Canopy have both been working to establish frameworks of businesses in the U.S. in anticipation of potential full federal legalization. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | What happened After soaring in late trading Thursday, Canadian pot stocks Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) are plunging Friday. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | What happened After soaring in late trading Thursday, Canadian pot stocks Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) are plunging Friday. ET, Tilray shares were down 15.8%, Canopy was down 17.8%, and Aurora stock dropped 12%. The news from Washington is still holding investors' attention Friday, even if cannabis stocks have given back some of their gains. |
36477.0 | 2022-10-07 00:00:00 UTC | Did Joe Biden Just Save Cannabis Stocks? | ACB | https://www.nasdaq.com/articles/did-joe-biden-just-save-cannabis-stocks | nan | nan | The stock market closed lower on Thursday, with losses of around 1% for the Dow Jones Industrial Average (DJINDICES: ^DJI) and S&P 500 (SNPINDEX: ^GSPC). The Nasdaq Composite (NASDAQINDEX: ^IXIC) fared slightly better, but the move lower gave up some of the big gains from earlier in the week. Early Friday, stock index futures suggested a flat opening.
INDEX
DAILY PERCENTAGE CHANGE
DAILY POINT CHANGE
Dow
(1.15%)
(347)
S&P 500
(1.02%)
(39)
Nasdaq
(0.68%)
(75)
Data source: Yahoo! Finance.
The big news from Thursday came in the cannabis sector, where marijuana stocks soared after a long-awaited announcement from the White House. Yet even as major cannabis companies saw their share prices climb, the fundamental challenges their businesses face remain the same. Investors will have to see signs that cannabis giants can overcome those challenges in order to see lasting returns on their investments.
Pardon for marijuana possession offenders
President Joe Biden released a statement Thursday that cannabis investors have been hoping to see for a long time. Biden revealed a three-pronged approach intended to enact his view of marijuana reform. First, the president announced a pardon of all federal crimes related to simple marijuana possession. Second, Biden urged state governors to offer similar clemency with respect to marijuana-related crimes at the state level. And last, the White House will ask the Secretary of Health and Human Services to look more closely at how marijuana is scheduled as a controlled substance under federal law, presumably with the idea of either removing it completely or at least moving it to a less severe category.
Predictably, marijuana stocks soared on the midafternoon announcement. Tilray (NASDAQ: TLRY) jumped more than 30%, while Canopy Growth (NASDAQ: CGC) climbed 22%. Aurora Cannabis (NASDAQ: ACB) settled for a 7% gain, but other companies saw some sizable gains as well, including a 33% rise for Curaleaf Holdings (OTC: CURLF) and a 14% gain for Cronos Group (NASDAQ: CRON).
Will investors see results?
Marijuana investors have hoped that the federal government would legalize cannabis. Even with Washington tacitly allowing states to choose whether to allow marijuana for medical or recreational purposes within their own borders, investors remained uncomfortable with the conflict of laws at the federal and state levels. Aligning federal law with the current treatment of marijuana will raise certainty, and it could also make certain aspects of operating cannabis-related businesses easier in areas like banking.
Yet cannabis stock fans shouldn't get ahead of themselves. It's entirely possible that a federal legalization of marijuana will still allow states to have laws to the contrary, which would mean the current patchwork of states with legal cannabis would stay in place.
Moreover, even full legalization wouldn't necessarily solve all the problems cannabis companies face. For instance, Tilray released its fiscal first-quarter results Friday for the period ending Aug. 31, and the numbers were mixed. Revenue was down 9% to $153 million, and despite a sizable drop in operating expenses, Tilray continued to lose money and failed to meet its shareholders' expectations. Even though Tilray's 8.5% share of the Canadian cannabis market leads the industry, the fact that the figure is so low speaks to the fragmentation of the marijuana space and the difficulty companies have had in establishing brand dominance.
Given how far marijuana stocks had fallen, a bounce on legalization hopes was warranted. But Biden's announcement won't save cannabis companies by itself. In order to keep up their positive momentum, cannabis companies will have to find ways to take full advantage of all their opportunities both in the U.S. and around the world. Anything less than that could lead to further disappointment for marijuana investors.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis (NASDAQ: ACB) settled for a 7% gain, but other companies saw some sizable gains as well, including a 33% rise for Curaleaf Holdings (OTC: CURLF) and a 14% gain for Cronos Group (NASDAQ: CRON). And last, the White House will ask the Secretary of Health and Human Services to look more closely at how marijuana is scheduled as a controlled substance under federal law, presumably with the idea of either removing it completely or at least moving it to a less severe category. Aligning federal law with the current treatment of marijuana will raise certainty, and it could also make certain aspects of operating cannabis-related businesses easier in areas like banking. | Aurora Cannabis (NASDAQ: ACB) settled for a 7% gain, but other companies saw some sizable gains as well, including a 33% rise for Curaleaf Holdings (OTC: CURLF) and a 14% gain for Cronos Group (NASDAQ: CRON). The stock market closed lower on Thursday, with losses of around 1% for the Dow Jones Industrial Average (DJINDICES: ^DJI) and S&P 500 (SNPINDEX: ^GSPC). Yet even as major cannabis companies saw their share prices climb, the fundamental challenges their businesses face remain the same. | Aurora Cannabis (NASDAQ: ACB) settled for a 7% gain, but other companies saw some sizable gains as well, including a 33% rise for Curaleaf Holdings (OTC: CURLF) and a 14% gain for Cronos Group (NASDAQ: CRON). The big news from Thursday came in the cannabis sector, where marijuana stocks soared after a long-awaited announcement from the White House. It's entirely possible that a federal legalization of marijuana will still allow states to have laws to the contrary, which would mean the current patchwork of states with legal cannabis would stay in place. | Aurora Cannabis (NASDAQ: ACB) settled for a 7% gain, but other companies saw some sizable gains as well, including a 33% rise for Curaleaf Holdings (OTC: CURLF) and a 14% gain for Cronos Group (NASDAQ: CRON). Marijuana investors have hoped that the federal government would legalize cannabis. It's entirely possible that a federal legalization of marijuana will still allow states to have laws to the contrary, which would mean the current patchwork of states with legal cannabis would stay in place. |
36478.0 | 2022-10-05 00:00:00 UTC | Why Aurora Cannabis, Canopy Growth, and Tilray Stocks Just Dropped | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-growth-and-tilray-stocks-just-dropped | nan | nan | What happened
Marijuana investors are getting bummed out on Wednesday, as a stock market rally that roared early in the week begins to falter. As of 12:05 p.m. ET, both Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down about 5.5%, while Tilray Brands (NASDAQ: TLRY) suffers a smaller loss of 3.5%.
Partly, this sell-off is just a function of stock markets in general being down today -- but as it turns out, marijuana stocks may have a problem all their own.
So what
As you're surely aware by now, there's a movement afoot in Congress to legalize marijuana at the national level. Things haven't gone entirely smoothly -- President Joe Biden, for example, seems still opposed to the idea. But by and large, even conservative legislators in Congress proper appear to be largely on board with the idea of legalizing weed in one form or another.
But maybe not in all forms.
As Marijuana Moment reported yesterday, the 156-member House Republican Study Committee (that's about 35% of Congress) has just put out a report blaming state-level marijuana legalization for "an explosion of marijuana use among children." The RSC is recommending that, whatever happens with marijuana legalization in general, the production and sale of marijuana edibles "in the form of candy or beverages" should remain banned if there is "reasonable cause to believe" they will be sold to minors. Similarly, the industry site reports that about one-fourth of members of the U.S. Senate support passing a Protecting Kids from Candy-Flavored Drugs Act.
Now what
Now here's why that should concern marijuana investors: According to a 2018 report on financial website Grizzle, while marijuana in general is a product commanding high gross profit margins (if not high net margins), the most profitable form of retail marijuana, by far, is edibles. In 2018, gross margins on dried marijuana flower were 76%, cannabis extract 84%, and edibles 92%.
Granted, these numbers were calculated based on old data. According to data from Statista, the production cost of dried cannabis has fallen substantially to about $1.04 per gram, from $1.79 per gram in the Grizzle report. But all else remaining equal, that shouldn't affect the relative profitability of one form of retail marijuana over another, in which case, it would appear that Congress' intent is to ban the sale of the most profitable form of marijuana -- even if other forms of weed offered for sale become legal.
The logical effect of such a move would be to weaken gross profit margins for big marijuana companies like Canopy, Aurora, and Tilray. And this means that, even if marijuana in general gets legalized at the federal level, if Congress maintains a ban on edibles sales, this could prevent or delay marijuana companies becoming profitable.
Long story short -- and at the risk of mixing some metaphors -- at the very moment marijuana investors are starting to see a light at the end of the legalization tunnel, Congress may snatch defeat out of the jaws of victory, and ensure marijuana remains an unprofitable business for the foreseeable future.
No wonder marijuana investors are feeling bummed today.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ET, both Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down about 5.5%, while Tilray Brands (NASDAQ: TLRY) suffers a smaller loss of 3.5%. What happened Marijuana investors are getting bummed out on Wednesday, as a stock market rally that roared early in the week begins to falter. Similarly, the industry site reports that about one-fourth of members of the U.S. Senate support passing a Protecting Kids from Candy-Flavored Drugs Act. | ET, both Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down about 5.5%, while Tilray Brands (NASDAQ: TLRY) suffers a smaller loss of 3.5%. The RSC is recommending that, whatever happens with marijuana legalization in general, the production and sale of marijuana edibles "in the form of candy or beverages" should remain banned if there is "reasonable cause to believe" they will be sold to minors. Now what Now here's why that should concern marijuana investors: According to a 2018 report on financial website Grizzle, while marijuana in general is a product commanding high gross profit margins (if not high net margins), the most profitable form of retail marijuana, by far, is edibles. | ET, both Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down about 5.5%, while Tilray Brands (NASDAQ: TLRY) suffers a smaller loss of 3.5%. As Marijuana Moment reported yesterday, the 156-member House Republican Study Committee (that's about 35% of Congress) has just put out a report blaming state-level marijuana legalization for "an explosion of marijuana use among children." Now what Now here's why that should concern marijuana investors: According to a 2018 report on financial website Grizzle, while marijuana in general is a product commanding high gross profit margins (if not high net margins), the most profitable form of retail marijuana, by far, is edibles. | ET, both Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) are down about 5.5%, while Tilray Brands (NASDAQ: TLRY) suffers a smaller loss of 3.5%. Partly, this sell-off is just a function of stock markets in general being down today -- but as it turns out, marijuana stocks may have a problem all their own. Now what Now here's why that should concern marijuana investors: According to a 2018 report on financial website Grizzle, while marijuana in general is a product commanding high gross profit margins (if not high net margins), the most profitable form of retail marijuana, by far, is edibles. |
36479.0 | 2022-10-05 00:00:00 UTC | These 3 Growth Stocks Are Down More Than 61% -- Is Now the Time to Buy? | ACB | https://www.nasdaq.com/articles/these-3-growth-stocks-are-down-more-than-61-is-now-the-time-to-buy | nan | nan | So far, 2022 has been a rough year for Canadian cannabis companies like Tilray Brands, (NASDAQ: TLRY) Aurora Cannabis, (NASDAQ: ACB) and SNDL (NASDAQ: SNDL). Tilray and SNDL are both down by over 59%, and Aurora's shares are performing even worse, losing more than 77% of their value.
Considering that the market-tracking SPDR S&P 500 ETF Trust is only down by around 21.9%, it's no shock that shareholders are second-guessing their investments in these so-called growth stocks, nor is it surprising that potential buyers are hesitating to start new positions. Are any of these three businesses appealing long-term purchases, or are the headwinds they're facing genuine dealbreakers?
Problems abound, but they're unlikely to be immediately disastrous
The most important thing that investors need to know is that none of these three cannabis companies are profitable, nor is it likely that they will be profitable anytime soon. In fact, with the exception of SNDL, their quarterly gross margins have actually gotten worse over the last three years. Take a look at this chart:
Data by YCharts.
There are a few reasons for the weak performance, starting with the glut of cannabis in the Canadian domestic recreational market.
Since around mid-2019, Canadian cannabis cultivators -- including SNDL, Tilray, and Aurora -- produce far more inventory than they're able to sell. Oversupply drives marijuana prices down and contributes to margin compression. It also forces businesses to invest more in competing for market share, and over the last 12 months, all three have increased their sales and marketing expenses, with Tilray's expenditures rising sharply by 26%.
Worse yet, due to Canada's regulations on marijuana products, many businesses are forced to destroy their excess inventory each year, which effectively confers a sharp penalty on companies whose output is mismatched with demand. In 2021, roughly 26% of domestic cannabis production was destroyed, totaling around 468 tons, and there's not much sign that 2022 will be better.
In short, these three competitors are facing a bearish operating environment in their home market. As a result, based on a combination of company filings and analyst estimates, SNDL's management expects both SNDL and Aurora to bring in less revenue in 2022 than in 2021, though Tilray's sales are anticipated to grow from CA$728 million to CA$801 million. But the same estimates indicate that, at least for Tilray and SNDL, top-line growth should resume with gusto in 2023. So for those two, there could still be a bit of room to develop a bullish thesis. For Aurora, it probably makes sense to check back on its performance in a couple of quarters to see if its prospects have improved.
Tilray might soon catch a break
Compared to SNDL, Tilray has an important saving grace: It competes in multiple geographical segments and also in multiple product segments. As of Q2, SNDL derives the majority of its revenue from liquor sales in Canada, and its alcohol segment is profitable. Nonetheless, there's nothing that could catalyze rapid growth in its alcohol sales, as alcohol isn't newly legalized in Canada, and people aren't about to start drinking significantly more. That implies it will see more unprofitable growth in its cannabis segment, which might end up burning down its cash reserves while eroding shareholder value along the way.
Tilray's positioning is significantly more favorable, as it aims to compete in the EU's medicinal marijuana markets and to shape the recent discussions about recreational cannabis legalization there. On Sept. 22, it got a critical authorization from regulators in Italy, enabling it to sell one of its medicinal cannabis solutions in the country. This summer, it also got approval from regulators in Poland to distribute and sell its medicinal products in pharmacies there too.
If recreational cannabis ends up being legalized, Tilray has already emplaced commercial infrastructure in other major EU markets like Germany, and its production facility in Portugal entitles it to tariff-free, intra-EU sales, which is a major advantage. In contrast, SNDL doesn't have anything remotely as lucrative on the horizon. For its part, Aurora has a limited footprint in France via its contract to supply the country's medical marijuana pilot program, and it also has some competitive positioning in the recreational market of Poland and, to a lesser extent, Germany. Of course, legalization in Europe won't solve Tilray or Aurora's unprofitability, but it won't hurt share prices either.
The only appealing long-term investment of the three is Tilray, but it's a risky purchase. Without any clear timelines for becoming profitable, buying its shares right now means accepting the chance that its stock will continue to drop for a year or two longer, especially if the market's sentiment about growth stocks continues to be negative. Still, there's no company better positioned to take advantage of legalization in the EU, so there's a decent chance it'll be able to keep growing and figure out its profitability issues down the line.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | So far, 2022 has been a rough year for Canadian cannabis companies like Tilray Brands, (NASDAQ: TLRY) Aurora Cannabis, (NASDAQ: ACB) and SNDL (NASDAQ: SNDL). Considering that the market-tracking SPDR S&P 500 ETF Trust is only down by around 21.9%, it's no shock that shareholders are second-guessing their investments in these so-called growth stocks, nor is it surprising that potential buyers are hesitating to start new positions. Worse yet, due to Canada's regulations on marijuana products, many businesses are forced to destroy their excess inventory each year, which effectively confers a sharp penalty on companies whose output is mismatched with demand. | So far, 2022 has been a rough year for Canadian cannabis companies like Tilray Brands, (NASDAQ: TLRY) Aurora Cannabis, (NASDAQ: ACB) and SNDL (NASDAQ: SNDL). Worse yet, due to Canada's regulations on marijuana products, many businesses are forced to destroy their excess inventory each year, which effectively confers a sharp penalty on companies whose output is mismatched with demand. Of course, legalization in Europe won't solve Tilray or Aurora's unprofitability, but it won't hurt share prices either. | So far, 2022 has been a rough year for Canadian cannabis companies like Tilray Brands, (NASDAQ: TLRY) Aurora Cannabis, (NASDAQ: ACB) and SNDL (NASDAQ: SNDL). Tilray's positioning is significantly more favorable, as it aims to compete in the EU's medicinal marijuana markets and to shape the recent discussions about recreational cannabis legalization there. If recreational cannabis ends up being legalized, Tilray has already emplaced commercial infrastructure in other major EU markets like Germany, and its production facility in Portugal entitles it to tariff-free, intra-EU sales, which is a major advantage. | So far, 2022 has been a rough year for Canadian cannabis companies like Tilray Brands, (NASDAQ: TLRY) Aurora Cannabis, (NASDAQ: ACB) and SNDL (NASDAQ: SNDL). Tilray and SNDL are both down by over 59%, and Aurora's shares are performing even worse, losing more than 77% of their value. Tilray's positioning is significantly more favorable, as it aims to compete in the EU's medicinal marijuana markets and to shape the recent discussions about recreational cannabis legalization there. |
36480.0 | 2022-09-30 00:00:00 UTC | Booted From a Top Index: Is This Growth Stock Doomed? | ACB | https://www.nasdaq.com/articles/booted-from-a-top-index%3A-is-this-growth-stock-doomed | nan | nan | When a stock gets added to a top index like the S&P 500, it often leads to more bullishness and greater trading volume. Institutional investors, for instance, often have requirements as to the type of stocks they can hold, and if a stock doesn't meet those, they can't buy it. So if a stock gets added to an index, that can have a positive impact on its share price, while the reverse can have a negative effect.
In Canada, the S&P/TSX Composite is comparable to the S&P 500 as it holds the Toronto Stock Exchange's top stocks and is a gauge of how the Canadian market is doing. It recently dropped marijuana producer Aurora Cannabis (NASDAQ: ACB) from its index. That also happened around the time Aurora released its latest earnings report, which was underwhelming. The one-two punch has sent its shares down lower, hitting a new 52-week low of $1.12 last week.
Why was the stock dropped from the index?
Although a reason wasn't given for the deletion of Aurora from the S&P/TSX Composite, market capitalization is a key eligibility factor and seems to be the most likely reason for the change. Shares of Aurora have crashed 81% over the past 12 months (as of Sept. 26). With its market cap down to around $350 million, its valuation may simply be too low. Rival cannabis company OrganiGram Holdings has a market capitalization of $280 million, and it isn't on the index, either. Meanwhile, Canopy Growth and Cronos Group, which are both worth more than $1 billion, are on there.
The positive news is that if Aurora's stock price can recover, it's possible for it to get back on the index. But that's easier said than done.
Aurora's latest financials don't inspire much confidence
On Sept. 20, Aurora released its year-end results for fiscal 2022 (the period ended June 30). It was more of the same that investors have been used to, and unfortunately, not much to get excited about on either the top or bottom lines. The company's net revenue totaled 50.2 million Canadian dollars for the most recent three-month period and was down 8% year over year. Medical cannabis net revenue, which is what Aurora's focus is on, generated positive growth, but at 4%, it's not going to drive much bullishness.
The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss shrank from CA$21.8 million a year ago to just a negative CA$12.9 million this past quarter. However, compared to the previous period (the third quarter), when its adjusted EBITDA loss was just CA$11.4 million, it looks like there hasn't been any real improvement of late. Management, however, still promises additional cost savings by the end of the year, which should put it on track to be adjusted EBITDA-positive in the future.
Is Aurora Cannabis stock destined to go lower?
Between its lackluster earnings report and Aurora losing its place on Canada's top index, it's hard to see a path forward for Aurora that doesn't involve its share price falling even lower than where it is today.
If that happens, it could mean another reverse stock split for the cannabis company. Two years ago, Aurora deployed a 1-for-12 reverse split in order to keep its share price above the $1 mark and stay compliant with Nasdaq listing requirements. It's looking more and more likely that another reverse split will happen for Aurora sooner or later.
Things are going from bad to worse for Aurora, and even if the company achieves adjusted EBITDA profitability in the near future, that may not be enough to turn things around for the stock. Aurora badly needs a growth catalyst to get investors excited about its business again. Right now, there just isn't much reason for optimism. For what it's worth, the cannabis industry carries high risk but there are better options to consider.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends OrganiGram Holdings. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | It recently dropped marijuana producer Aurora Cannabis (NASDAQ: ACB) from its index. However, compared to the previous period (the third quarter), when its adjusted EBITDA loss was just CA$11.4 million, it looks like there hasn't been any real improvement of late. Two years ago, Aurora deployed a 1-for-12 reverse split in order to keep its share price above the $1 mark and stay compliant with Nasdaq listing requirements. | It recently dropped marijuana producer Aurora Cannabis (NASDAQ: ACB) from its index. Rival cannabis company OrganiGram Holdings has a market capitalization of $280 million, and it isn't on the index, either. The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss shrank from CA$21.8 million a year ago to just a negative CA$12.9 million this past quarter. | It recently dropped marijuana producer Aurora Cannabis (NASDAQ: ACB) from its index. Institutional investors, for instance, often have requirements as to the type of stocks they can hold, and if a stock doesn't meet those, they can't buy it. Between its lackluster earnings report and Aurora losing its place on Canada's top index, it's hard to see a path forward for Aurora that doesn't involve its share price falling even lower than where it is today. | It recently dropped marijuana producer Aurora Cannabis (NASDAQ: ACB) from its index. So if a stock gets added to an index, that can have a positive impact on its share price, while the reverse can have a negative effect. Rival cannabis company OrganiGram Holdings has a market capitalization of $280 million, and it isn't on the index, either. |
36481.0 | 2022-09-28 00:00:00 UTC | Why Aurora Cannabis, Canopy Growth, and Tilray Stocks Just Popped | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-growth-and-tilray-stocks-just-popped | nan | nan | What happened
Marijuana stocks continued to rebound from last week's sell-off on Wednesday, with shares of Canopy Growth (NASDAQ: CGC) gaining 4.2%, Tilray Brands (NASDAQ: TLRY) up 4.8%, and Aurora Cannabis (NASDAQ: ACB) leading the whole pack higher with a 5.4% gain as of 1:40 p.m. ET.
Partly, the rebound appears to be a simple side effect of the market in general gaining back some of its losses. The Nasdaq -- to which index all three of these cannabis stocks belong -- is up 1.5% in midafternoon trading. But partly, marijuana stocks may be benefiting from some optimistic news from one of their number.
So what
This morning, Canopy announced that in an effort to progress from losses toward profitability, it will divest its Canadian Tweed and Tokyo Smoke retail operations and focus in the future on producing "premium" branded cannabis as a consumer packaged goods company. Ontario-based OEG Retail Cannabis will take over Canopy's 23 retail operations outside of Alberta; 420 Investments Ltd. will acquire Canopy's five locations within Alberta.
As for what's left of Canopy, management says the transaction will help it to achieve the high end of its previously announced targeted range of cost-savings this year.
Now what
It appears management is now anticipating that it can cut its selling, general, and administrative (SGA) costs by as much as $100 million. This would be in addition to the close to $200 million in cost savings announced prior to April, and a hoped-for $30 million to $50 million in savings on cost of goods sold.
In short, Canopy appears to be promising that its annual costs could fall by as much as $350 million in comparison to the more than $920 million in cost of goods sold and SGA costs incurred in 2021. If it's right about that, then Canopy should emerge as a slimmer, more focused, and closer-to-profitable operation after all this cost-cutting is done.
What does this mean to marijuana investors? Well, a more efficient Canopy Growth might put more pressure -- not less -- on rivals such as Aurora Cannabis and Tilray. That's actually a reason for those stocks to be going down today, not up.
It's worth noting, moreover, that even if Canopy succeeds in cutting its costs by the targeted amount, $350 million in savings still won't be enough cost-cutting to turn Canopy profitable -- given that its operating losses last year exceeded $500 million.
Long story short, this looks to me like a case of "close, but no cigar." Even selling off its sizable retail operation isn't going to be enough to turn Canopy's income statement from red to black. And I doubt this bodes well for the rest of the cannabis industry, either.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Marijuana stocks continued to rebound from last week's sell-off on Wednesday, with shares of Canopy Growth (NASDAQ: CGC) gaining 4.2%, Tilray Brands (NASDAQ: TLRY) up 4.8%, and Aurora Cannabis (NASDAQ: ACB) leading the whole pack higher with a 5.4% gain as of 1:40 p.m. Partly, the rebound appears to be a simple side effect of the market in general gaining back some of its losses. So what This morning, Canopy announced that in an effort to progress from losses toward profitability, it will divest its Canadian Tweed and Tokyo Smoke retail operations and focus in the future on producing "premium" branded cannabis as a consumer packaged goods company. | What happened Marijuana stocks continued to rebound from last week's sell-off on Wednesday, with shares of Canopy Growth (NASDAQ: CGC) gaining 4.2%, Tilray Brands (NASDAQ: TLRY) up 4.8%, and Aurora Cannabis (NASDAQ: ACB) leading the whole pack higher with a 5.4% gain as of 1:40 p.m. In short, Canopy appears to be promising that its annual costs could fall by as much as $350 million in comparison to the more than $920 million in cost of goods sold and SGA costs incurred in 2021. It's worth noting, moreover, that even if Canopy succeeds in cutting its costs by the targeted amount, $350 million in savings still won't be enough cost-cutting to turn Canopy profitable -- given that its operating losses last year exceeded $500 million. | What happened Marijuana stocks continued to rebound from last week's sell-off on Wednesday, with shares of Canopy Growth (NASDAQ: CGC) gaining 4.2%, Tilray Brands (NASDAQ: TLRY) up 4.8%, and Aurora Cannabis (NASDAQ: ACB) leading the whole pack higher with a 5.4% gain as of 1:40 p.m. It's worth noting, moreover, that even if Canopy succeeds in cutting its costs by the targeted amount, $350 million in savings still won't be enough cost-cutting to turn Canopy profitable -- given that its operating losses last year exceeded $500 million. See the 10 stocks *Stock Advisor returns as of August 17, 2022 Rich Smith has no position in any of the stocks mentioned. | What happened Marijuana stocks continued to rebound from last week's sell-off on Wednesday, with shares of Canopy Growth (NASDAQ: CGC) gaining 4.2%, Tilray Brands (NASDAQ: TLRY) up 4.8%, and Aurora Cannabis (NASDAQ: ACB) leading the whole pack higher with a 5.4% gain as of 1:40 p.m. It's worth noting, moreover, that even if Canopy succeeds in cutting its costs by the targeted amount, $350 million in savings still won't be enough cost-cutting to turn Canopy profitable -- given that its operating losses last year exceeded $500 million. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Canopy Growth Corp. wasn't one of them! |
36482.0 | 2022-09-28 00:00:00 UTC | Should You Buy Cannabis Stocks Today or Wait for U.S. Legalization? | ACB | https://www.nasdaq.com/articles/should-you-buy-cannabis-stocks-today-or-wait-for-u.s.-legalization | nan | nan | As bad as the stock market has been doing of late, cannabis stocks have been even much worse buys. As of Sept. 26, the Horizons Marijuana Life Sciences ETF's price is down 61% over the trailing 12 months, versus the S&P 500's more modest decline of 18%. Buying on the dip is a tricky prospect for cannabis investors because pot stocks have continually gone in one direction: down.
One catalyst that could turn things around is the legalization of marijuana in the U.S. But even though more people are using pot than in the past, that still doesn't mean legalization is around the corner. So it boils down to an all-important question: Should you buy cannabis stocks today, or are you better off waiting?
Why you might not want to wait
The case for investing in cannabis stocks today centers around the industry's long-term growth potential. Analysts from Allied Market Research expect that globally, the cannabis market will grow at a compound annual rate of more than 20% until 2031, when it will be worth nearly $149 billion.
There will be significant opportunities for businesses to expand and grow their market share in the U.S. and worldwide. While investors shouldn't get their hopes up for federal legalization in the U.S. anytime soon, that doesn't mean more states won't open up for business. New Jersey and New York are among the most recent states to pass legislation permitting adult-use pot.
Internationally, Germany might become the largest country to allow cannabis since it is also considering legalization as early as next year. Meanwhile, in Australia, a political party, the Greens, is also working on a campaign to legalize marijuana.
A stock like Aurora Cannabis (NASDAQ: ACB), which has a presence in 25 countries, could be a big winner, benefiting from loosening pot laws around the globe. Trading below book value and a price-to-sales multiple of less than two (the average cannabis stock on the Horizons Marijuana Life Sciences ETF trades at close to five times revenue), it's a discounted growth stock that could have some promising potential in the long term.
However, suppose you wait until there's better newsflow around the federal legalization of pot, leading to more bullishness on the cannabis industry. In that case, you'd likely buy Aurora Cannabis and other pot stocks at much higher prices than where they are today.
Why you should consider waiting
The big danger with pot stocks is that many, such as Aurora, are incredibly risky. In Aurora's case, the stock might look cheap, but that's also because it has continually disappointed investors. Moreover, promises of getting to profitability have been a work in progress that never appears to be complete.
Aurora just released its year-end results for the period ending June 30, and its adjusted loss based on earnings before interest, taxes, depreciation, and amortization (EBITDA) was more than 51 million Canadian dollars ($37.5 million). Although that was down from a loss of CA$118 million in the previous fiscal year, it demonstrates how far the company still has to go just to achieve an adjusted profit number.
Even for U.S.-based cannabis businesses that post adjusted EBITDA profits, they still aren't truly profitable as net losses are the norm for the industry:
Data by YCharts.
The danger for investors is that while waiting for legalization in the U.S., some businesses might simply not be around for it. And even if they don't end up going out of business, the landscape could change, new businesses might enter the industry, and companies may not be as dominant as they appear to be today. That could result in you incurring even larger losses along the way.
By waiting to see what the industry looks like, investors can make better, safer decisions as to how to invest in cannabis stocks.
It all comes down to your risk tolerance
If you're comfortable with taking on significant risk and are OK with waiting many years for legalization, then buying cannabis stocks today could eventually prove to be profitable. However, I still wouldn't suggest investing in a struggling stock like Aurora Cannabis -- multi-state operators in the U.S. have far superior financials than their Canadian counterparts and are more attractive buys.
But even those stocks could continue to struggle, and if you're not comfortable with a high level of risk, then waiting for legalization might be the best option for you.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
Simply click here to get the full story now.
Learn more
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Green Thumb Industries and Trulieve Cannabis Corp. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | A stock like Aurora Cannabis (NASDAQ: ACB), which has a presence in 25 countries, could be a big winner, benefiting from loosening pot laws around the globe. However, I still wouldn't suggest investing in a struggling stock like Aurora Cannabis -- multi-state operators in the U.S. have far superior financials than their Canadian counterparts and are more attractive buys. Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks. | A stock like Aurora Cannabis (NASDAQ: ACB), which has a presence in 25 countries, could be a big winner, benefiting from loosening pot laws around the globe. As of Sept. 26, the Horizons Marijuana Life Sciences ETF's price is down 61% over the trailing 12 months, versus the S&P 500's more modest decline of 18%. Why you might not want to wait The case for investing in cannabis stocks today centers around the industry's long-term growth potential. | A stock like Aurora Cannabis (NASDAQ: ACB), which has a presence in 25 countries, could be a big winner, benefiting from loosening pot laws around the globe. Trading below book value and a price-to-sales multiple of less than two (the average cannabis stock on the Horizons Marijuana Life Sciences ETF trades at close to five times revenue), it's a discounted growth stock that could have some promising potential in the long term. It all comes down to your risk tolerance If you're comfortable with taking on significant risk and are OK with waiting many years for legalization, then buying cannabis stocks today could eventually prove to be profitable. | A stock like Aurora Cannabis (NASDAQ: ACB), which has a presence in 25 countries, could be a big winner, benefiting from loosening pot laws around the globe. While investors shouldn't get their hopes up for federal legalization in the U.S. anytime soon, that doesn't mean more states won't open up for business. In that case, you'd likely buy Aurora Cannabis and other pot stocks at much higher prices than where they are today. |
36483.0 | 2022-09-26 00:00:00 UTC | Why Aurora Cannabis, Canopy Growth, and Tilray Stocks Bounced Back Monday | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-growth-and-tilray-stocks-bounced-back-monday | nan | nan | What happened
Marijuana stocks got hammered along with the rest of the growth stocks last week, with Canopy Growth (NASDAQ: CGC), for example, losing 10% for the week -- nearly twice as much as the rest of the Nasdaq -- Tilray Brands (NASDAQ: TLRY) dropping 15%, and Aurora Cannabis (NASDAQ: ACB) getting smoked for a 16% loss. As the new week gets underway, however, these marijuana stocks are lighting back up.
Through 10:20 a.m. ET, all three stocks are back in the green today, with Canopy gaining 4.9%, Aurora up 5.8%, and Tilray leading the pack higher with a 6.7% gain.
So what
Why are marijuana stocks in the green today? That's actually an excellent question, because the newswires are mostly lacking clearly great news for cannabis.
Oh, it's not entirely crickets out there. According to Marijuana Moment, a move by Wisconsin governor Tony Evers to permit citizen voting on referenda could make it easier to pass marijuana legalization in that state. At the federal level, senator and onetime presidential candidate Cory Booker continues to advocate for marijuana reform, arguing that "a majority of Americans on both sides of the aisle [are] in support of legalization."
Probably the biggest news is that Canada -- arguably the country that kick-started the international movement to start decriminalizing marijuana -- is launching a project to "review" its groundbreaking Cannabis Act to ensure the local legislation up there "meets the needs of all Canadians while continuing to displace the illicit market," according to Health Minister Jean-Yves Duclos. But statements by government officials regarding a desire to strengthen the law are subject to interpretation. "Strengthen" could as easily mean "tighten regulations" as it could mean expanding access to marijuana in Canada.
For that reason, I can't say that the Canadian law, either, is an obvious catalyst for today's price moves among marijuana stocks.
Now what
More likely, therefore, what we're seeing today is a simple "bounce" -- whether of the "dead cat" variety or not -- in stock prices after last week's sell-off. With all three of the biggest-name marijuana stocks trading at inflation-adjusted penny stock levels -- less than $3 a share for Canopy and Tilray, and barely a buck a share for Aurora -- investors may simply be thinking that marijuana stocks are too cheap to resist.
If you ask me, though, that's a dangerous attitude to take to marijuana stocks -- or any stocks.
Whether a stock is "cheap" or not, remember, is not a function of its stock price alone, but of its stock price divided by its earnings -- its P/E ratio. And Aurora Cannabis, Canopy Growth, and Tilray are not currently profitable. For that matter, according to analysts polled by S&P Global Market Intelligence, none of these stocks will even become profitable before 2026 at the earliest.
Until marijuana stocks figure out a way to earn a profit, I can't consider them "cheap" at any price.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Marijuana stocks got hammered along with the rest of the growth stocks last week, with Canopy Growth (NASDAQ: CGC), for example, losing 10% for the week -- nearly twice as much as the rest of the Nasdaq -- Tilray Brands (NASDAQ: TLRY) dropping 15%, and Aurora Cannabis (NASDAQ: ACB) getting smoked for a 16% loss. At the federal level, senator and onetime presidential candidate Cory Booker continues to advocate for marijuana reform, arguing that "a majority of Americans on both sides of the aisle [are] in support of legalization." Probably the biggest news is that Canada -- arguably the country that kick-started the international movement to start decriminalizing marijuana -- is launching a project to "review" its groundbreaking Cannabis Act to ensure the local legislation up there "meets the needs of all Canadians while continuing to displace the illicit market," according to Health Minister Jean-Yves Duclos. | What happened Marijuana stocks got hammered along with the rest of the growth stocks last week, with Canopy Growth (NASDAQ: CGC), for example, losing 10% for the week -- nearly twice as much as the rest of the Nasdaq -- Tilray Brands (NASDAQ: TLRY) dropping 15%, and Aurora Cannabis (NASDAQ: ACB) getting smoked for a 16% loss. ET, all three stocks are back in the green today, with Canopy gaining 4.9%, Aurora up 5.8%, and Tilray leading the pack higher with a 6.7% gain. For that reason, I can't say that the Canadian law, either, is an obvious catalyst for today's price moves among marijuana stocks. | What happened Marijuana stocks got hammered along with the rest of the growth stocks last week, with Canopy Growth (NASDAQ: CGC), for example, losing 10% for the week -- nearly twice as much as the rest of the Nasdaq -- Tilray Brands (NASDAQ: TLRY) dropping 15%, and Aurora Cannabis (NASDAQ: ACB) getting smoked for a 16% loss. With all three of the biggest-name marijuana stocks trading at inflation-adjusted penny stock levels -- less than $3 a share for Canopy and Tilray, and barely a buck a share for Aurora -- investors may simply be thinking that marijuana stocks are too cheap to resist. Whether a stock is "cheap" or not, remember, is not a function of its stock price alone, but of its stock price divided by its earnings -- its P/E ratio. | What happened Marijuana stocks got hammered along with the rest of the growth stocks last week, with Canopy Growth (NASDAQ: CGC), for example, losing 10% for the week -- nearly twice as much as the rest of the Nasdaq -- Tilray Brands (NASDAQ: TLRY) dropping 15%, and Aurora Cannabis (NASDAQ: ACB) getting smoked for a 16% loss. And Aurora Cannabis, Canopy Growth, and Tilray are not currently profitable. * They just revealed what they believe are the ten best stocks for investors to buy right now… and Canopy Growth Corp. wasn't one of them! |
36484.0 | 2022-09-22 00:00:00 UTC | CANADA STOCKS-TSX futures edge higher after rout on Fed worries | ACB | https://www.nasdaq.com/articles/canada-stocks-tsx-futures-edge-higher-after-rout-on-fed-worries | nan | nan | Sept 22 (Reuters) - Canadian stock index futures rose on Thursday, as rebounding oil prices helped stabilize sentiment after sharp losses in the previous session on worries around a hawkish Federal Reserve.
Futures on the S&P/TSX index SXFc1 gained 0.2% by 0734 a.m. ET.
Oil prices climbed more than 1% on the prospect of higher Chinese demand and heightened geopolitical risks. O/R
The S&P/TSX composite index .GSPTSE closed down nearly 1% to hit over a two-week low on Wednesday, mirroring a weak sentiment on Wall Street, after the Fed delivered another supersized interest rate hike and promised to "keep at" its battle to beat down inflation.
The selloff in U.S. equities looked set to continue, with Dow e-minis 1YMcv1 down 49 points, or 0.16%. S&P 500 e-minis EScv1 fell 11.5 points, or 0.3% and Nasdaq 100 e-minis NQcv1 dropped 52.25 points, or 0.45%. .N
All eyes are on the Bank of Canada's policy decision next week, with traders pricing in 73% chance of a 50 basis point rate hike after data this week signaled easing domestic inflationary pressures.
Pieridae Energy PEA.TO, one of the companies proposing a liquefied natural (LNG) gas terminal on Canada's east coast, has asked the federal government to help ensure pipeline operator TC Energy TRP.TO would be able secure permits to expand gas supply pipelines in a timely fashion.
ATB Capital Markets upgraded Aurora Cannabis ACB.TO to "sector perform" from "underperform."
(Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V)
((sruthi.shankar@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ATB Capital Markets upgraded Aurora Cannabis ACB.TO to "sector perform" from "underperform." Sept 22 (Reuters) - Canadian stock index futures rose on Thursday, as rebounding oil prices helped stabilize sentiment after sharp losses in the previous session on worries around a hawkish Federal Reserve. O/R The S&P/TSX composite index .GSPTSE closed down nearly 1% to hit over a two-week low on Wednesday, mirroring a weak sentiment on Wall Street, after the Fed delivered another supersized interest rate hike and promised to "keep at" its battle to beat down inflation. | ATB Capital Markets upgraded Aurora Cannabis ACB.TO to "sector perform" from "underperform." Sept 22 (Reuters) - Canadian stock index futures rose on Thursday, as rebounding oil prices helped stabilize sentiment after sharp losses in the previous session on worries around a hawkish Federal Reserve. S&P 500 e-minis EScv1 fell 11.5 points, or 0.3% and Nasdaq 100 e-minis NQcv1 dropped 52.25 points, or 0.45%. | ATB Capital Markets upgraded Aurora Cannabis ACB.TO to "sector perform" from "underperform." Sept 22 (Reuters) - Canadian stock index futures rose on Thursday, as rebounding oil prices helped stabilize sentiment after sharp losses in the previous session on worries around a hawkish Federal Reserve. S&P 500 e-minis EScv1 fell 11.5 points, or 0.3% and Nasdaq 100 e-minis NQcv1 dropped 52.25 points, or 0.45%. | ATB Capital Markets upgraded Aurora Cannabis ACB.TO to "sector perform" from "underperform." Sept 22 (Reuters) - Canadian stock index futures rose on Thursday, as rebounding oil prices helped stabilize sentiment after sharp losses in the previous session on worries around a hawkish Federal Reserve. Futures on the S&P/TSX index SXFc1 gained 0.2% by 0734 a.m. |
36485.0 | 2022-09-21 00:00:00 UTC | Why Aurora Cannabis Shares Dropped Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-shares-dropped-today | nan | nan | What happened
Canada-based cannabis producer Aurora Cannabis (NASDAQ: ACB) reported its fiscal 2022 fourth-quarter and full-year earnings Tuesday evening, and the market was not impressed. Shares of Aurora plunged by 12% in early trading Wednesday, and remained down by 6.8% as of 11:54 a.m. ET.
So what
Analysts were surprised by the magnitudes of both Aurora's actual and adjusted losses. For the quarter, which ended June 30, its net loss was approximately $462 million, including a non-cash impairment charge of $377 million. Excluding that charge, the adjusted loss of $85 million was still worse than the $31.8 million loss expected by analysts, according to FactSet Research. The company's bottom line did improve from a $100 million loss in the prior-year period.
Now what
The company said the large impairment charges "were triggered by changes in cannabis market conditions, and in the current capital market environment including higher rates of borrowing and lower foreign exchange rates."
Aurora did have some good news in its report, too, however. Revenue from its international medical cannabis business soared by 35.4% year over year. Management said that strength came from its growing presence in several important emerging cannabis markets.
Aurora also reiterated its prediction that it will be in a position to be profitable on an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) basis by the end of calendar 2022. That may help explain why the stock recovered some of its early losses Wednesday morning. If it doesn't achieve that goal, investors can likely expect Aurora shares to fall further.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FactSet Research Systems. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Canada-based cannabis producer Aurora Cannabis (NASDAQ: ACB) reported its fiscal 2022 fourth-quarter and full-year earnings Tuesday evening, and the market was not impressed. Now what The company said the large impairment charges "were triggered by changes in cannabis market conditions, and in the current capital market environment including higher rates of borrowing and lower foreign exchange rates." Aurora also reiterated its prediction that it will be in a position to be profitable on an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) basis by the end of calendar 2022. | What happened Canada-based cannabis producer Aurora Cannabis (NASDAQ: ACB) reported its fiscal 2022 fourth-quarter and full-year earnings Tuesday evening, and the market was not impressed. For the quarter, which ended June 30, its net loss was approximately $462 million, including a non-cash impairment charge of $377 million. Excluding that charge, the adjusted loss of $85 million was still worse than the $31.8 million loss expected by analysts, according to FactSet Research. | What happened Canada-based cannabis producer Aurora Cannabis (NASDAQ: ACB) reported its fiscal 2022 fourth-quarter and full-year earnings Tuesday evening, and the market was not impressed. Excluding that charge, the adjusted loss of $85 million was still worse than the $31.8 million loss expected by analysts, according to FactSet Research. Now what The company said the large impairment charges "were triggered by changes in cannabis market conditions, and in the current capital market environment including higher rates of borrowing and lower foreign exchange rates." | What happened Canada-based cannabis producer Aurora Cannabis (NASDAQ: ACB) reported its fiscal 2022 fourth-quarter and full-year earnings Tuesday evening, and the market was not impressed. Shares of Aurora plunged by 12% in early trading Wednesday, and remained down by 6.8% as of 11:54 a.m. Excluding that charge, the adjusted loss of $85 million was still worse than the $31.8 million loss expected by analysts, according to FactSet Research. |
36486.0 | 2022-09-21 00:00:00 UTC | Aurora Cannabis Inc. (ACB) Q4 2022 Earnings Call Transcript | ACB | https://www.nasdaq.com/articles/aurora-cannabis-inc.-acb-q4-2022-earnings-call-transcript | nan | nan | Image source: The Motley Fool.
Aurora Cannabis Inc. (NASDAQ: ACB)
Q4 2022 Earnings Call
Sep 20, 2022, 5:00 p.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Greetings. Welcome to the Aurora Cannabis Inc. fourth quarter 2022 results conference call. At this time, all participants are in a listen-only mode.
A question-and-answer session will follow the formal presentation. [Operator instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Ananth Krishnan.
You may begin.
Ananth Krishnan -- Vice President, Corporate Development and Investor Relations
Thank you, operator, and we appreciate you all joining us this afternoon. Today with me are, Miguel Martin, CEO; and Glen Ibbott, CFO. After the market closed, Aurora issued a news release announcing our fiscal 2022 fourth quarter and full year financial results. This news release, accompanying financial statements and MD&A will be available on our IR website and can also be accessed via SEDAR and EDGAR.
In addition, you will find a supplemental information deck on our IR website. Listeners are reminded that certain matters discussed on today's conference call could constitute forward-looking statements that are subject to risks and uncertainties related to our future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect actual results are detailed in our annual information form and other periodic filings and registration statements.
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These documents may similarly be accessed via SEDAR and EDGAR. Following the prepared remarks by Miguel and Glen, we will conduct a question-and-answer session for our covering analysts. We ask that you limit yourself to one question and then get back in the queue please. With that, I will turn the call over to Miguel.
Miguel, please go ahead.
Miguel Martin -- Chief Executive Officer
Thank you, Ananth. Before discussing the business more broadly, let me begin with a brief discussion of our latest acquisition, a controlling interest in Bevo, one of the largest suppliers of propagated vegetables and ornamental plants in North America. This transaction first and foremost underscores a disciplined approach to capital allocation; and second, is consistent with both our immediate needs and our vision of becoming a leader in global cannabis. Bevo will be managed by its existing management team who have over 85 years of agricultural experience and have consistently demonstrated growth in revenue and earnings over the past decade.
Collectively, they retain a substantial equity ownership position as they embark on a robust growth plan. As part of the transaction, we have identified a profitable opportunity to repurpose the Aurora Sky facility, orchid cultivation, and vegetable propagation with minimal capital investment. This will greatly increase Bevo's production capability and extended shipping range in Canada and the United States. It will also enable us to generate incremental revenue and adjusted EBITDA, while saving on previously announced wind-down and selling costs.
The transaction is immediately accretive to Aurora, adding approximately $9 million of annual adjusted EBITDA, and importantly is another tangible step toward our goal of adjusted EBITDA profitability on a run rate basis by December the 31, 2022. We are pleased to have Bevo as our partner and expect our investment to drive significant shareholder value over the long run. Beyond the acquisition, we feel very good about our position in the market. Our optimism is based on the inherent strength of our global medical cannabis business where we remain the number one Canadian LP.
Medical cannabis remains the best segment to invest in as is both defensive and stable in turbulent times and commence amiable adjusted gross margins that consistently exceed 60%, two times that of consumer cannabis. And while our Canadian medical cannabis business is steady, our international business saw revenues increased by over 70% this fiscal year with notable progress in Germany, Poland, the UK, and Australia. The second reason for our enthusiasm is we continue to excel our rationalizing the business to the current environment. As you know, our annualized cost savings of $150 million to $170 million will be completed within the next two quarters; and once complete, will materially reduce our cash needs and get us closer to EBITDA breakeven.
Our balance sheet is also a key differentiator and has enabled us to repurchase $155 million in convertible debt during Q4, which will result in considerable savings on cash interest costs. Additionally, we have approximately $370 million in cash as of yesterday, which makes Aurora one of only a handful of companies within the cannabis industry to have a net cash position. Finally, we feel great about our investment in science, which is beginning to pay off. Specifically, our breeding program has delivered nine new proprietary cultivars through our product pipelines since June of 2021, delivered meaningful improvement to yields and is expected to generate incremental high margin revenue through license agreements for these genetic innovations to other licensed producers.
In fact, I'm excited to announce that we signed our first agreement to license genetics, to a major Canadian LP during Q4, and we expect more to follow. So, let's take a deeper dive into our global medical cannabis business. During Q4, international medical revenue was up 35% compared to last year as our regulatory expertise, compliance protocols, testing and science capabilities supported our leadership position. While revenue contributions for individual countries can certainly ebb and flow as these new markets develop due to various factors, including the timing of government approvals and import permits, we believe our exposure to nearly a dozen countries outside of Canada affords us relative insulation as it relates to the economic climate and conditions in specific countries across Europe, Israel, and Australia.
In Poland, revenues nearly doubled year-over-year and we maintained our number one market share position. We continue to invest in marketing efforts there to support our planned launch of new flower and extract products. In the UK, our revenues increased by 25% compared to Q4 last year, and we believe we're the market leader in the flower segment. UK witnessed rapid growth in patient population over the last year, and we hope to see this continue as new clinics open up.
Turning to Germany, we received EU GMP certification for our state-of-the-art domestic medical cannabis production facility in May and made our first shipment to German pharmacies that same month. Recall that we hold one of only three licenses in Germany and are number two in medical flower with a 17% volume share. Our market share is also growing steadily in the extract market, thanks to new product innovation. During Q4, we also launched three sizes of dronabinol making our first step into that category.
While growth in patients has moderated during the year, Germany remains the largest market in the EU with 83 million citizens with only about a 100,000 to 120,000 medical cannabis patients. We are certainly well aware of some of the economic challenges that Germany is facing at the present time as it grapples with the war in Ukraine and the impact that is having on energy prices and inflation. Still, we are hopeful the growth will pick back up this fiscal year, even against this backdrop, driven by doctor education and a simplified reimbursement process. We expect to begin generating revenues in France in 2023, where we are currently the only supplier of dry flower in the pilot program.
Finally in Australia, our Q4 revenue rose 700% year-over-year, driven by record number of patients. Let me reiterate that we believe that cannabis growth story will center on international medical and recreational over the next several years. Right now, we believe there are about 150,000 patients in Europe alone. And if the countries that have so far legalized medical cannabis were to reach similar adoption levels to Canada, 1% of the adult population, the patient pool could expand to 3.5 million people.
This fiscal year, we expect a number of new medical markets to come online. And several governments have announced plans for recreational schemes, most notably Germany. So, it's a massive opportunity. We believe our success in medical cannabis provides us with a significant first mover advantage and our leadership will be portable to rec markets as they open up.
Turning to the Canadian medical market. Our leading market share was over 24% while insured patients comprised 81% of our domestic medical sales, up from 79% in Q3. Our net revenue per order and per participating patient have both significantly increased over the past year due to a shift toward higher value insured patients, while our direct-to-consumer approach continues to drive industry leading margins. Overall revenue was flat in Q4 compared to Q3, but we attribute our share gain to the best-in-class service we offer along with new premium products and innovations.
We note that acquiring, retaining and moving the patients through the process requires significant resources and experience, and much of that same infrastructure and know-how with patients in Canada is directly applicable to our success in Europe. Switching to Canadian adult rec, our Q4 revenue increased by $2.3 million as compared to the prior quarter. The increase was primarily due to our strengthened product offerings in certain categories, along with seven weeks of results from Thrive. Their premium consumer cannabis net revenue added about $1.4 million.
While the environment of Canadian rec has seen prolonged macro challenges, we are beginning to see signs of stabilization, and we remain focused on maximizing profitability through low-cost production and by entering higher margin categories. The market also continues to highlight the importance of innovation and the SKU lifecycle, with the typical SKU generating 80% of its lifetime value in the six months following launch. 13 SKUs were launched across our rec and medical channels in June alone, and we have a stack pipeline that should serve us well over the coming quarters. More broadly, we believe that our scientific leadership in cannabis breeding and genetics provides Aurora with a unique advantage that drives value in all tiers of the consumer and medical categories.
Our breeding program has delivered nine new proprietary cultivars to our product pipeline since June of 2021, as well as bringing new products to consumers, they deliver meaningful improvements in yield, which will allow us to boost top quality flower and industry leading margins. For example, our new farm gas cultivar delivers nearly double the yield of our traditional staple cultivars and does so at an average of 26.5% THC. And with that, I would now like to turn the call over to Glen for our financial review. But let me quickly say that we've made incredible strategic progress during the year.
We are on track with our transformation plan. And we feel very optimistic about the future of the business.
Glen Ibbott -- Chief Financial Officer
Thanks, Miguel. Good afternoon, everyone. We're proud to have one of the strongest balance sheets among Canadian LPs, and I'm pleased that we strengthened it even further during Q4. But at the same time that we've been executing our cost reduction plan, we also repurchased $155.3 million in principal on convertible notes, with a total cost of $149.2 in cash and that's including accrued interest.
As of yesterday, we had approximately CA$370 million of available cash and we have $209 million principal remaining on the convertible notes. We believe that debt reduction, even though maturity is still more than a year out is a smart and defensive capital allocation decision that reduces balance sheet risk, especially important during turbulent markets. The debt reduction executed so far saving us cash interest cost of $9.5 million annually. We continue to have access to a shelf prospectus with $713.7 million still available including $186.2 million remaining under our ATM program, which we may utilize from time-to-time for strategic purposes.
Our cash flow continues to improve with $22.5 million used in operations in working capital in Q4, compared to $39.3 million in the prior quarter. Q4 includes restructuring and severance payments of $6.8 million. We're moving closer to our positive adjusted EBITDA target, as we have reduced our loss by $8.9 million versus Q4 of last year. If we compare to last quarter, Q3, our adjusted EBITDA loss increased by about $1.5 million and that's driven mostly by a change in the company's sales channel mix.
As Miguel mentioned, we also expect a positive contribution from our controlling stake in Bevo, which delivered EBITDA of $9 million for the year ending June 30, 2022. I should note that the Bevo business has a strong seasonal cadence with the period from January to June expected to deliver roughly two-thirds of the full annual revenue and EBITDA. So overall, Aurora remains on track to achieve a positive adjusted EBITDA run rate as we execute it. Q4 net cannabis revenue was $50.2 million, and that's compared to $50.4 million last quarter. Q4 revenue included the non-routine $1 million provision for returns from prior period.
So, excluding that prior period adjustment, revenue was $51.2 million. Medical cannabis fell modestly, while consumer cannabis rose, due mostly to contributions from our Thrive acquisition. So, let me now address each of our core businesses in a bit more detail. Canadian medical revenue was $24.9 million in Q4, up $118,000 from Q3 and reflecting the stability of this business.
Our focus and traction with the insured patient population is certainly beneficial to us as it provides greater consistency to the segment in any economic environment while the higher margin nature of this business compared to the consumer cannabis business contributes substantially more to our bottom line. Our international medical revenue was $11.6 million, and that reflected 35% growth versus the same quarter a year ago, but a 20% decrease sequentially. The increase compared to Q4 last year was due to our strong presence in key international growth markets, including Australia, Poland, and the UK. The decrease relative to last quarter resulted from the temporary situation of limited supply of high demand cultivars in Europe, coupled with a weakened euro.
We expect these supply issues to continue through Q1, but to improve in the following quarters. Taken together, our leading Canadian and global medical businesses performed well, generating $36.6 million in sales and adjusted gross margins of 62%, down only slightly from 64% in the prior quarter. Medical represents about 73% of our Q4 revenue and about 86% of our adjusted gross profit. This segment best distinguishes us from our competitors and is critical to Aurora's path to deliver a positive adjusted run rate as we exit December 2022. Our Q4 consumer revenue was $12.6 million, a $2.3 million increase compared to last quarter.
Consumer cannabis represented about 27% of our Q4 revenue and about 14% of our adjusted gross profit. The revenue increase was due mainly to $1.4 million from the addition of Thrive's consumer business, starting May 6th and the relative stabilization of our Canadian consumer business. Now, that being said, we do expect some short-term disruptions to Q1 consumer cannabis revenue due to the cyber-attack on the Ontario cannabis store distribution system and a significant labor strike at BC's liquor and cannabis distribution centers with our revenue exposure from these events being as much as $3 million in Q1. We do not expect this to impact our timelines to profitability.
As I just mentioned, our medical business is responsible for about 86% of our adjusted gross profit. SG&A, which includes R&D, came in at $49.3 million in Q4. However, this included $6.7 million in restructuring costs and $2.3 million in prior period employee-related accruals. This restructuring related to significant staffing reductions we took in June 2022 as part of our business and cost transformation plan.
So, excluding these costs, Q4 SG&A was $39.1 million. And this is our lowest level of SG&A in almost four years. Ultimately, we expect to drive SG&A for the existing cannabis business to below $30 million with a meaningful reduction expected in Q1 and the full savings being realized by December 2022. So, pulling all of this together, we generated an adjusted EBITDA loss in Q4 2022 of $12.9 million, compared to $11.4 million in previous quarter.
This is driven mostly by a change in the company's sales mix to more consumer revenue and sales in Q4, which yielded lower average net selling prices. Looking forward into Q1 fiscal 2023, we do expect to see an improvement to adjusted EBITDA, but that will be driven primarily by a reduction in SG&A to under $35 million in Q1. I would like to reiterate our commitment to annualized cost savings of $150 million to $170 million. These savings are evenly split between cost of goods sold and SG&A, and we are seeing them reflected in our P&L, either as they occur for the SG&A savings or as inventory is drawn down for production-related savings.
With the decisions we have taken, we are working toward a leaner, more agile operating model, and that is expected to provide strong EBITDA leverage as future revenues increase. During Q4, we also recognized non-cash impairment charges of $505.1 million. This is relating to goodwill, intangible assets, and other tangible assets. The impairment represents the full remaining goodwill balance associated with Aurora's cannabis operations and the impairment was partially due to changes in cannabis market conditions but most importantly, the changes in the current capital market environment, including higher rates of borrowing and lower foreign exchange rates.
Now, finally, just a minor housekeeping item. Our upcoming fiscal year 2023 will only have three quarters as we are changing our fiscal year end to March 31st. And that's in order to achieve certain internal cost and staffing efficiencies. These include -- there are three key points from my financial review that I'd like to reiterate.
First, our balance sheet is stronger than ever, supported by a healthy cash balance, reduced convertible debt level, and improving working capital and cash flow. Second, our medical businesses in Canada and globally provide us with a competitive advantage and are critical to us generating sustainable profitability. And finally, we've taken the actions to meet our targeted range for cost savings by December 2022. These will have a materially positive impact on our bottom-line and reflect a leaner operating model that positions us well for future growth.
So, thanks for your interest in Aurora. And I'll now turn the call back to Miguel.
Miguel Martin -- Chief Executive Officer
Thanks Glen. Here are four brief takeaways before we take your questions. One, we're better positioned than ever to achieve our goal of a positive adjusted EBITDA run rate as we exit the quarter in December of 2022, and we have listed out several data points that support that here today. Two, our medical cannabis business is a formidable force in the industry, both domestically and internationally. It remains the smartest cannabis segment to invest behind today, given the long-term growth opportunities, the high margins and the defensive nature of the segment described earlier.
Three, the Canadian rec market is in the process of correcting. And as the recovery is complete, we will have added opportunity for market share and pricing. Four, our science and innovation program represent another high-margin opportunity that's just started. To conclude, we are making significant strategic progress with each passing quarter, we're nearing the completion of our business transformation plan, and have done so while strengthening our balance sheet.
In addition, we've made two acquisitions in the past few months, Thrive and then Bevo, which underscores our ability to grow organically and through M&A, and we feel confident that we can create significant long-term shareholder value, particularly from these levels. We appreciate your time and interest in Aurora, and now be happy to take your questions. Operator, please open the lines for questions.
Questions & Answers:
Operator
Thank you. [Operator instructions]. And our first question comes from the line of Vivien Azer with Cowen. Please proceed with your question.
Vivien Azer -- Cowen and Company -- Analyst
Hi. Good evening.
Miguel Martin -- Chief Executive Officer
Good evening, Viv.
Vivien Azer -- Cowen and Company -- Analyst
So, I just wanted to dig on -- dig into some of the revenue versus volume dynamics that you guys experienced in the quarter. Maybe it's as simple as FX headwinds, which we're very familiar with covering large cap staples. But usually your revenues and volumes, at least directionally, move in tandem, and it seems like there was a bit of a divergence there. So, I'm wondering if there is any geographic mix or other price mix considerations to call out, please.
Thank you.
Miguel Martin -- Chief Executive Officer
You got it. Glen?
Glen Ibbott -- Chief Financial Officer
Viv, I think what we saw was a bit of a mix change between consumer and medical. Our European medical did take a step down in the quarter, particularly in Germany as there is a cultivar there producing ran into few production problems. They are correctable. They are in process of being corrected.
But -- so, what we then saw, if you're looking at our average pricing, it's something -- is that consumer particularly with the addition of driving stuff, it's a greater impact from the consumer pricing than we normally see in the mix. So, that might be what you're looking at. But other than that, I think it was just kind of business as usual in terms of volume. So, you get that impact from more volume right through on the consumer business and lower average pricing.
Vivien Azer -- Cowen and Company -- Analyst
OK. Thank you.
Operator
Our next question comes from the line of Michael Lavery with Piper Sandler. Please proceed with your question.
Michael Lavery -- Piper Sandler -- Analyst
Thank you. Good evening.
Miguel Martin -- Chief Executive Officer
Good evening, Michael.
Michael Lavery -- Piper Sandler -- Analyst
I just wanted to understand some of your thinking on the portfolio strategy a little bit more. The greenhouse synergies with Bevo makes sense and take advantage of just your particular situation and obviously add -- help add some EBITDA. But are there any other adjacencies you'd be considering or that are on your radar, I guess just one part of it? And maybe related is just also as you think about the EBITDA target, is any more expected to come from M&A?
Miguel Martin -- Chief Executive Officer
Yes. I mean -- so let me try to unpack that a little bit. I think as it pertains to M&A, our center of the play to where we sort of live is medical cannabis, global medical cannabis. And so, for that reason, certain things that have been of interest to others are probably not as much of interest to us.
Secondly, our position on the U.S. I think is one that's been validated. It's going to take longer. I'm of the strong belief that it's going to be a -- if it's federal, it's going to be a medical construct with the FDA involved.
And clearly, given our dominance internationally on medical cannabis would have a lot of options there. So, if you take the U.S. out of the mix and you take maybe some other things out of the mix, you find certain things that maybe are more attracted to us than others. We liked Thrive and we've talked about that because of the management team and the ability to really support what I think important synergies between rec and medical. Bevo, we think is just an absolute diamond in the rough, incredible propagator of science, has a really clever use of tax benefits as it pertains to Sky and has a big upside of growth for what we thought was a fair value, both for us and for their shareholders. So, I think, Michael, we'll continue to look at things like that.
We've been terribly patient. As Glen was pretty eloquent about the balance sheet, it's important to me that we have a really strong balance sheet, so we're not going to chase there. But if things come up, we've got the fire power to go after them. The only other place that maybe is of more interest to someone like us than maybe others are those things that connect into medical cannabis.
It's my opinion, and I think it's been proven out that you can make investments around medical cannabis, and those investments in some cases are portable around the world, infrastructure, systems, understandings around patients, and science, which is something we've made a lot of investments in, and they now are just starting to pay dividends. So, steady as we go. I think, we're pretty good shape. In terms of the EBITDA part, the reality is if we can hold revenues and margins flat from the current level and we can get SG&A under 30, you get there.
And so, we expect to reach that type of SG&A by Q2, and we've shown a lot of progress. And I think, while some may have other questions, when we've said we're going to do something around efficiencies, we've done it. And that SG&A would clearly be consistent with that.
Michael Lavery -- Piper Sandler -- Analyst
OK. Really helpful. Thank you.
Miguel Martin -- Chief Executive Officer
Thank you, Michael.
Operator
Our next question comes from the line of Pablo Zuanic with Cantor Fitzgerald. Please proceed with your question.
Pablo Zuanic -- Cantor Fitzgerald -- Analyst
Thank you. Good afternoon. Miguel, I'm looking at a press release Tilray issued on September 6th, and it says "Tilray initiates roundtable with German regulators to kick-off draft legislation, to legalize adult-use cannabis in Germany." And I'm wondering when I saw the press release, I said, well, I mean, I suppose that Aurora will soon issue a similar press release. So, I guess, the question -- the very basic question is, can you tell us, or give some color about your lobbying capabilities, your people on the ground, your potential seat at the table in helping draft the German program.
Because again, I was surprised, Tilray issued a press release, and we didn't hear from you. And if it may add, a part b to the question, where do you guys stand today in terms of whether Germany will allow imports or it's going to be initially mostly just domestic production? Thank you.
Miguel Martin -- Chief Executive Officer
You got it. So, the first thing is I'm not here to comment on anybody. I have tremendous respect for my competitors, and what they do is what they do. But -- so I don't really have any comment on that.
In terms of the German market, we've made a significant investment in Germany. We have what we think might be one of the leading government relations, government affairs executives in Germany. He is having good conversations with the regulators. I've spent my whole career working on things like this in both, tobacco and alcohol, and they're never a straight line.
I think, as it pertains to Germany, there's two things going on as you well know and you've written a lot about, is both enhancements to the medical business, which we're very excited about as one of the leaders in medical cannabis in Germany, and secondly, is the legalization of the rec business. So, my understanding and our understanding is that industries -- what industry needs in order for that to be successful is being considered. The German government is -- almost always are being very thoughtful about the stakeholders and the timing in which this can be done in a compliant way. I would expect their learnings from medical will color how they so go about the implementation of rec business, which is why we think those companies that have facilities with the medical business advantages in rec, and as we said earlier, one of only three companies that have a license to produce in Germany.
Now specific to your question about in-country, I think the going in position I think for most folks should be that because of the UN conventions and just because of the way the regs are going to work for rec is that the most obvious path for rec would be in-country manufacturing. Now, clearly whether the number is 200 tons or 300 tons or 400 tons in order to service that rec market, that is significantly more capacity than three of us have. But clearly, that would be an opportunity there. We also would say that while rec most likely would be an in-country production exercise, medical continues to be allowed with an EU GMP certification to have products brought into Germany.
We do that successfully today from both, our Nordic facility as well as our Canadian facilities. And we think it's one of our core competencies. So, more to follow in Germany, I understand the interest in it. I think what I would tell people is it's going to move thoughtfully.
It might not always be a straight line, but we have tremendous respect for the regulators there in what we've seen from the medical business. And I think, my expectation is that it will be a robust rec business. I just can't predict when, but at the time it will be compliant companies, experienced companies and thoughtful companies will have an advantage in Germany. And then clearly Germany implements this, that will be a beacon for other key markets around the world in terms of how you can go from medical cannabis and to recreational cannabis.
Pablo Zuanic -- Cantor Fitzgerald -- Analyst
Understood. Thank you.
Miguel Martin -- Chief Executive Officer
You got it.
Operator
Our next question comes from the line of Andrew Carter from Stifel. Please proceed with your question.
Andrew Carter -- Stifel Financial Corp. -- Analyst
Yes. Thank you. Focusing on the Bevo business, which we certainly have experience with covering site one. Number one, do you see this platform to go deeper in this, given that this is a very fragmented space, and you now have a team to run that? And then, the second you have the decision to repurpose Sky versus selling it, which -- that's an opportunity cost that if you will kind of adds to the cost of acquisition.
What kind of timeline are you giving the Bevo team to get this up to speed, achieve a return, versus if it didn't go well, kind of returning to that original selling the facility and also getting rid of all of the costs associated with it? Thanks.
Miguel Martin -- Chief Executive Officer
You got it, Andrew. So, first on Bevo, Bevo is a tremendous business, and you guys did cover it and so did others. I think it is a fallacy to say that Bevo didn't work in that previous construct when it was connected to another cannabis company. Bevo did work.
It's just that combination did not work. We are not combining Bevo with Aurora from cannabis assets and non-cannabis assets. So, there's that. Secondly, Bevo is a tremendous business.
They have significant big box contracts, both in Canada and the U.S. And there is a lot of opportunity right now in North America for them to expand that business, both in Canada and the U.S. because of shipping costs. And many of the items that they produce are produced offshore in Asia and Southeast Asia.
And so, they have tremendous opportunities there. And we're excited about that, particularly since it can be done in a very capital-light manner. It's not going to draw down cash resources from Aurora that would expand that. And the team that has so successfully run it is going to continue to run it. This is not -- Aurora does not pretend to have excellence in orchids or propagation.
So, it was key for us to have those key folks, Leo and Andrew and those key guys over there to run it, and we are thrilled about that. As it pertains to Sky, listen, I don't want to get too pumped-up about this. But the combination of the tax benefit, the repurposing, the changes in the tax designation and the upside that it presents very quickly for Bevo was a way better deal than being caught up with everybody else trying to sell cannabis assets. And at the end of the day, if they can't get there, we can always sell it in that key Edmonton market.
But the beauty, if there is such a thing, of all the money that's been spent on Sky, is there is not a lot of capex or opex required by Bevo in order to generate revenue. So, as Glen mentioned, the Bevo business is a bit seasonal and it contributes more in our Q2, Q3 than it does in Q1. But to answer your question, I think we'll know, in say next nine to 12 months exactly what Sky means for Bevo. And if it doesn't work out, we still have that optionality.
But the offset of all the things I've mentioned make that play significantly a better advantage for Aurora than just selling it for pennies on the dollar.
Andrew Carter -- Stifel Financial Corp. -- Analyst
Thanks. I will pass it on.
Miguel Martin -- Chief Executive Officer
You are very welcome. Thank you.
Operator
And our next question comes from the line of Andrew Bond with Jefferies. Please proceed with your question.
Andrew Bond -- Jefferies -- Analyst
Hey. Good evening, Andrew Bond on the line for Owen Bennett. Thank you for taking our question. So, from us, on the international segment, can you give us some more detail on performance between markets? Not looking for an exact breakout, but I think lastearnings call you all discussed plans to launch extracts in the UK in 4Q and also some top market share positions in the other key markets like Australia, Germany, Poland.
So, any detail on where sales came from in 4Q and where there might have been some weakness relative to 3Q? And if I could just sneak in maybe more broadly, how you would characterize growth ahead in fiscal '23? Thank you.
Miguel Martin -- Chief Executive Officer
Sure. Let me take a top-line comment about international and some of those key markets, and I'll Glen get into some of the details about it. So, as we said in our prepared remarks, it is really important to be operating in a lot of countries. You got to operate in the right countries.
And so, the reason for that is, these sales are still a bit lumpy. We've all seen that in what's happened with Israel. But whether it's import permits or shipments or the regs sort of evolving, you get these, sort of, months where these sales and you have these months you don't. Secondly, a lot of these investments can play out and really generate incremental margins and revenue, if they are laid over a broader system.
So, the same production system, the same cultivars, the same genetics, the same a lot of things are similar to what we do in Germany, Czech Republic, Poland, on and on and on. Now, you have to have different distribution models to take advantage of those different pieces, and we have done that. And so, in most markets, we are just the manufacturer, but in other markets, we have a sales force and a wholesale piece. The Western European or the international market as a whole is absolutely growing and clearly is the fastest growing segment of global cannabis, which is this medical piece. And I will say that the regs are quite similar, whether that's packaging, stability testing, manufacturing, EU GMP, there has been this sort of consistency and evolution that advantages a company like us. Now, in terms of the actual specifics on the country breakouts, Glen, I'll turn that over to you.
Glen Ibbott -- Chief Financial Officer
Yes, thanks. So, I mean, we keep calling out the same countries as kind of the dominant ones for us in our network and that's Germany, Poland, UK, and Australia. But to Miguel's point, they definitely are lumpy, like Australia for instance in Q4 was up 75% from the previous quarter. But then as I look at Q1, it'll come down again and Q2 looks good again.
So, it's very -- we've called it a lumpy or something, and that's why it's really important to have that portfolio, because for the most part our international business is fairly predictable, but country by country, as they develop and as they find where those barriers are that need to be knocked down, patient access, things like that. And that was definitely the story in Australia a year or two back when they had to improve patient accessibility, and then the market seems to be really kind of taking off. In terms of our extract in Germany, we did launch in Q4 -- late in Q4. So, we don't see much in terms of revenue in Germany, in Q4, but it is an important part of the competitive landscape there. So, we are in that market now, and we'll report more as we go forward on how that piece of our business is going.
So again, Germany, Australia, UK, Poland, being the predominant international medical markets for us right now. But I'd say, there's probably at least four or five others that are contributing revenue in Q4.
Andrew Bond -- Jefferies -- Analyst
Got it. Thanks, Glen. Thanks, Miguel. Appreciate it.
I will pass it on.
Miguel Martin -- Chief Executive Officer
Thank you.
Operator
Our next question comes from the line of Matt Bottomley with Canaccord Genuity. Please proceed with your question.
Matt Bottomley -- Canaccord Genuity -- Analyst
Good evening, everyone. Thanks for taking these questions. Just two questions for me on the revenue side of things. First just on the consumer sales in Canada, there's a bit of a divergence I think was noted with respect to Aurora sales relative to the macro level data on some of these point of sales subscription services we all look like.
So, Glen, you had mentioned some of the headwinds related to maybe the OCS website or some others. So, I'm just wondering if you can give us a little more color on that. And the second question on revenue is just related to your international sales is the current $11 million to $12 million that you did in Q4. If that just stays flat for the sake of argument, is that sufficient to get you to your profitability targets on an adjusted EBITDA considering a lot of your margin does come from those sales.
Thanks, guys.
Miguel Martin -- Chief Executive Officer
Yes. Let me comment on syndicated data, and then Glen can obviously give you the background. One of the gaps in some of this syndicated data that everybody looks at is Quebec. Quebec is our largest province in terms of sales.
And so, it underweights what we're doing. I think, generally the rec business overall for an LP is generally challenging. It was referenced before what happened with the hack, unfortunately in the OCS that caused about two weeks of disruption. They did an unbelievable job to get back up and running.
We also saw the strike out in BC that had a pretty significant effect for a long period of time. That's been cleaned up as well. I think, the combination of that, and retail stores feeling a lot of pressure plus compressed margins overall means you really have to be sort of focused in where we went and the Thrive team's done a tremendous job. And you can still -- there's still places you can find to make money, premium flower obviously, but vapes, concentrates, and some of the other things that they're particularly good at.
So, I think, we're going to be in this wash a little bit longer in terms of what the macro sort of issues are with rec. But when it comes out, there is tremendous amount of efficiencies for someone that does as well as we do in medical and rec to have some of those items, particularly as patients are starting to look for more premium items, and clinicians are starting to be more open to variety. So, Glen, you want to pick up the rest of it?
Glen Ibbott -- Chief Financial Officer
Yes. Thanks very much, Miguel. Yes. So certainly, consumer revenue at the current levels would be more than adequate to get us to our profitability goal.
If you -- certainly picking up the message that most of our gross profit is being generated out of our medical businesses. So, 86% in Q4, and that was a quarter where our international medical had a little bit of a pause. So, normal, the quarter before say Q3 was 90% of our gross profits were coming out of our medical system. So, absolutely as we see growth picking up again in Europe and Australia over the next number of quarters, Canadian business, the objective is to stabilize it, getting on good footing and give it a launch pad for growth in the future.
But the short-term plan is to really get to our profitability goal on the back of our medical businesses.
Matt Bottomley -- Canaccord Genuity -- Analyst
OK. Appreciate all that. Thanks, guys.
Operator
Our next question comes from the line of Frederico Gomes with ATB Capital Markets. Please proceed with your question.
Frederico Gomes -- ATB Capital Markets -- Analyst
Hi. Good evening. Thanks for taking my questions. So, just on the international side, we are seeing some increased competition in some markets, namely Israel, several other LPs and international companies exporting to different markets.
So, can you talk about how you see that competition coming? Are you seeing any margin pressure in international? And what sort of advantages do you have to compete in your main markets, like Germany and Poland? Thank you.
Miguel Martin -- Chief Executive Officer
Sure. So, listen, I've spent a lot of time in Israel and Israel is obviously a key market for a lot of folks. The challenges we've talked about in Israel is they have a significant amount of local production. And clearly that has advantages.
So, the import permits and the process, and the certification of Israel is sort of an evolving one. What we've said about that is that we're not going to give any forward-looking guidance on Israel. But when we have a shipment, we always let people know because of the size of it. I'm not -- we haven't had a shipment in a bit on Israel.
I don't think that's a forever situation. But right now, it's not as big a focus because -- and to your point, there has been a little bit of margin compression and a lot of people are fighting for that, including the local growers that have a lot of advantages. And I've got tremendous respect for that. Overall, internationally, because of the medical setup, we haven't seen the type of margin compression that you've seen in the Canadian rec business or in the U.S.
overall. And these are really hard markets to get into. Germany, which everybody talks about is about a six to 12-month process in order to even qualify a cultivar. The variance on the potency can only be 10% in their lab, which is a very difficult standard to get to.
And there's a significant amount of other work that you have to do around stability testing and whatnot. The other piece of this is the fact that patients are quite sticky. Once they find something they like, whether it's ours or a competitive product, unlike rec where you see massive share movements between top SKUs, you don't see that in the medical business. And there's clearly first mover advantage, there's clearly a consistency advantage to those companies that can keep stuff in stock and are rolled out of the medical market. So international cannabis, in most markets you're seeing maybe four companies, possibly five companies making up the lion share of sales. As we've all talked about, Canadian rec as an example of top five companies do less than a third of the overall business.
And so, I think the international business has proven to be sticky. And as you go forward with the advent of things such as clinical research, partnership with clinicians, these systems getting bigger, I think you're going to still see in most markets, big markets like Germany that three or four companies will do the lion's share of the business for a long time, and we expect Aurora to be one of them.
Frederico Gomes -- ATB Capital Markets -- Analyst
Got it. Thank you, Miguel.
Miguel Martin -- Chief Executive Officer
You are very welcome.
Operator
Our next question comes from the line of John Zamparo with CIBC. Please proceed with your question.
John Zamparo -- CIBC World Markets -- Analyst
Thanks. Good evening. I wanted to get back to Bevo. And if we think about the evolution of Aurora over time, it used to be a pretty broad, expansive business as multiple segments, then narrowed down to be purely cannabis.
And Bevo is certainly outside the core strategy of what the company was. But what I'm wondering is, should we view this as Bevo was trying to optimize the decision with Sky, or do you want to further diversify the business away from pure cannabis at this point?
Miguel Martin -- Chief Executive Officer
I think, John, and sorry, I know we talked about -- I missed you and your folks this week. Here's how I would think about Bevo. Everything that we do is about being a global leader in medical cannabis. In order to do that, there are two things that we have been innately focused on.
One is profitability and secondly is strengthening some core underpinnings that we think will be an advantage to that pursuit of global leadership in medical cannabis. Bevo was really interesting to us for a couple of reasons. One is about Sky. And so, the tax option there, the use of Sky, the ability for it to very quickly, without capex, produce a significant amount of predictable, profitable revenue was important to us. Secondly, there are synergies and efficiencies.
We haven't gotten into them yet and we are not going to do it in a disruptive way. But propagation has always been this sort of interesting play in cannabis. And while it's done in the U.S., it's not really done in Canada. And so, the excellence of 80 plus years around propagation, science, there will be things that will come out of the Bevo system or the Aurora system that will be additive.
And as we look at agriculture, as a general sort of play and things around it, we do see it's additive. Now, I don't -- the concept of adjacency, I do believe in staying close to the core. But, if there are things that are profitable, there is a good value for our shareholders and is additive both financially and thematically, particularly from a science standpoint to our overall mission, I think we're going to be interested in that. And I'm pretty proud of this deal for a lot of different reasons, but proof's in the pudding and I don't want to get over my skis too much on it.
But this is a really great team, a really good use of assets, capex light, and produces a lot of strength for us. So, we'll see.
John Zamparo -- CIBC World Markets -- Analyst
That is helpful. Thank you.
Miguel Martin -- Chief Executive Officer
You are welcome.
Operator
And our last question comes from the line of Tamy Chen with BMO Capital Markets. Please proceed with your question.
Tamy Chen -- BMO Capital Markets -- Analyst
Hi. Thanks for squeezing me in. My question is on the science side, particularly the licensing of genetics. Miguel, I was just curious, this particular aspect of the science business, how do you see that fit within the overall Aurora business? Like, is this an area that you're very focused on you do want to expand? Like, what's the opportunity size that you see? And I guess, the last part of the question I have is, whatever genetics that do come out of your R&D and innovation that are good, I'm just wondering like why don't you just keep that for yourselves and grow it for your own business, whether it's your own medical or consumer segment? Thank you.
Miguel Martin -- Chief Executive Officer
You're very welcome. So, it is something we're focused on. Aurora has spent an inordinate amount of time and effort on this. And it may be, I don't want to say it is, but it may be one of the largest genetic facilities connected to cannabis in the world.
And so, as it pertains to that, there are significant advantages, not just around variety and uniqueness of the cultivars, say chasing potency, and terp levels. Plant health, I referenced yield, farm gas is twice, 2x, the yield per square meter than some of our historical cultivars that totally changes footprint and all types of different things that are going on. There's incredible work being done on things like powdery mildew. And so, what I've seen is that when you look at other agricultural categories, there are companies that are not branded that are not participating from a manufacturing standpoint of selling their items, but they're genetics, their science, and they are participating in those markets.
And we're all familiar with them. No, one's really doing that today on a global scale, and we think there's a space there. I also don't view it as a conflict. We have about a three share in the rec business.
We have a 24 share in the Canadian medical business. And we have enough assets in order to serve our pipeline, both domestically and internationally as well as sell that. And some of these licensing deals are very innovative and to be honest are not overly creative. And you see them in other categories such as soybean and vegetables and tomatoes and other things that were around because of some of our partnerships.
And so, like I said, we're excited about this. The last part of this, while there are some LPs doing this, there is a huge gap from particularly Canadian LPs and accessing world class genetics. They just haven't done the work, and it's not something you can snap your fingers and start up. This is a five or 10-year process in breeding and genetics and in training in order to be there.
And so, we're excited about what it means for us. And you see some of those -- some of that stuff in the market. We're also excited about what it means, from -- for being able to sell it and generating revenue streams. Because the reality is we're not going to have a 50 share of the rec business.
And unlike some of my past businesses where we've been having these massive market shares, so there's plenty of place to do it. And as this stuff evolves, it's our hope we'll be able to sell genetics internationally as well. So, I think it's a great play. Almost the entirety of that spend is already accounted for.
And we think there's huge upside in not only for us, but for others in accessing those genetics and those incredible sort of science innovations.
Tamy Chen -- BMO Capital Markets -- Analyst
OK. Thank you.
Miguel Martin -- Chief Executive Officer
You are very welcome. Appreciate the question.
Operator
We have reached the end of the question-and-answer session. I'll turn the call back over to Miguel Martin for closing remarks.
Miguel Martin -- Chief Executive Officer
Listen, I appreciate everybody's interest. Our plan is absolutely on track. And I understand, as I mentioned with the regulations that the progression of a successful cannabis company is not a straight line. But in terms of the cost efficiencies, we've done and will do what we've said.
We've focused on those areas of the business that is profitable. And we do see an upside. And as these markets continue to come online, it's been medical first and then rec, and we think Aurora is in a great position. So, we appreciate your support.
We appreciate your interest. And we look forward to sharing our progress as we move forward. Best to all and your families, wish you all the best. And we'll go from there.
Thanks, everybody.
Operator
[Operator signoff]
Duration: 0 minutes
Call participants:
Ananth Krishnan -- Vice President, Corporate Development and Investor Relations
Miguel Martin -- Chief Executive Officer
Glen Ibbott -- Chief Financial Officer
Vivien Azer -- Cowen and Company -- Analyst
Michael Lavery -- Piper Sandler -- Analyst
Pablo Zuanic -- Cantor Fitzgerald -- Analyst
Andrew Carter -- Stifel Financial Corp. -- Analyst
Andrew Bond -- Jefferies -- Analyst
Matt Bottomley -- Canaccord Genuity -- Analyst
Frederico Gomes -- ATB Capital Markets -- Analyst
John Zamparo -- CIBC World Markets -- Analyst
Tamy Chen -- BMO Capital Markets -- Analyst
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis Inc. (NASDAQ: ACB) Q4 2022 Earnings Call Sep 20, 2022, 5:00 p.m. Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Andrew Bond -- Jefferies -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC World Markets -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. While the environment of Canadian rec has seen prolonged macro challenges, we are beginning to see signs of stabilization, and we remain focused on maximizing profitability through low-cost production and by entering higher margin categories. | Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Andrew Bond -- Jefferies -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC World Markets -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Aurora Cannabis Inc. (NASDAQ: ACB) Q4 2022 Earnings Call Sep 20, 2022, 5:00 p.m. Specifically, our breeding program has delivered nine new proprietary cultivars through our product pipelines since June of 2021, delivered meaningful improvement to yields and is expected to generate incremental high margin revenue through license agreements for these genetic innovations to other licensed producers. | Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Andrew Bond -- Jefferies -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC World Markets -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Aurora Cannabis Inc. (NASDAQ: ACB) Q4 2022 Earnings Call Sep 20, 2022, 5:00 p.m. And while our Canadian medical cannabis business is steady, our international business saw revenues increased by over 70% this fiscal year with notable progress in Germany, Poland, the UK, and Australia. | Operator [Operator signoff] Duration: 0 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Michael Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Andrew Bond -- Jefferies -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC World Markets -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Aurora Cannabis Inc. (NASDAQ: ACB) Q4 2022 Earnings Call Sep 20, 2022, 5:00 p.m. And while our Canadian medical cannabis business is steady, our international business saw revenues increased by over 70% this fiscal year with notable progress in Germany, Poland, the UK, and Australia. |
36487.0 | 2022-09-20 00:00:00 UTC | Aurora Cannabis Inc. (ACB) Reports Q4 Loss, Tops Revenue Estimates | ACB | https://www.nasdaq.com/articles/aurora-cannabis-inc.-acb-reports-q4-loss-tops-revenue-estimates | nan | nan | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.12. This compares to loss of $0.21 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 33.33%. A quarter ago, it was expected that this company would post a loss of $0.16 per share when it actually produced a loss of $1.04, delivering a surprise of -550%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $39.35 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 0.30%. This compares to year-ago revenues of $44.63 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Aurora Cannabis Inc. Shares have lost about 72.8% since the beginning of the year versus the S&P 500's decline of -18.2%.
What's Next for Aurora Cannabis Inc.
While Aurora Cannabis Inc. Has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Aurora Cannabis Inc. Mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.10 on $39.38 million in revenues for the coming quarter and -$0.37 on $178.8 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Products is currently in the bottom 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Abbott (ABT), is yet to report results for the quarter ended September 2022.
This maker of infant formula, medical devices and drugs is expected to post quarterly earnings of $0.89 per share in its upcoming report, which represents a year-over-year change of -36.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Abbott's revenues are expected to be $9.57 billion, down 12.5% from the year-ago quarter.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.12. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. | Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.12. Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $39.35 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 0.30%. | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.12. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $39.35 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 0.30%. | Aurora Cannabis Inc. (ACB) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.12. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Aurora Cannabis Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $39.35 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 0.30%. |
36488.0 | 2022-09-20 00:00:00 UTC | After-Hours Earnings Report for September 20, 2022 : ACB, SFIX | ACB | https://www.nasdaq.com/articles/after-hours-earnings-report-for-september-20-2022-%3A-acb-sfix | nan | nan | The following companies are expected to report earnings after hours on 09/20/2022. Visit our Earnings Calendar for a full list of expected earnings releases.
Aurora Cannabis Inc. (ACB)is reporting for the quarter ending June 30, 2022. The medical products company's consensus earnings per share forecast from the 4 analysts that follow the stock is $-0.12. This value represents a 42.86% increase compared to the same quarter last year. The last two quarters ACB had negative earnings surprises; the latest report they missed by -550%. Zacks Investment Research reports that the 2022 Price to Earnings ratio for ACB is -0.89 vs. an industry ratio of 2.50.
Stitch Fix, Inc. (SFIX)is reporting for the quarter ending July 31, 2022. The retail (shoe) company's consensus earnings per share forecast from the 10 analysts that follow the stock is $-0.60. This value represents a 415.79% decrease compared to the same quarter last year. SFIX missed the consensus earnings per share in the 2nd calendar quarter of 2022 by -26.32%. Zacks Investment Research reports that the 2022 Price to Earnings ratio for SFIX is -3.09 vs. an industry ratio of 14.60.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The last two quarters ACB had negative earnings surprises; the latest report they missed by -550%. Aurora Cannabis Inc. (ACB)is reporting for the quarter ending June 30, 2022. Zacks Investment Research reports that the 2022 Price to Earnings ratio for ACB is -0.89 vs. an industry ratio of 2.50. | Zacks Investment Research reports that the 2022 Price to Earnings ratio for ACB is -0.89 vs. an industry ratio of 2.50. Aurora Cannabis Inc. (ACB)is reporting for the quarter ending June 30, 2022. The last two quarters ACB had negative earnings surprises; the latest report they missed by -550%. | The last two quarters ACB had negative earnings surprises; the latest report they missed by -550%. Zacks Investment Research reports that the 2022 Price to Earnings ratio for ACB is -0.89 vs. an industry ratio of 2.50. Aurora Cannabis Inc. (ACB)is reporting for the quarter ending June 30, 2022. | The last two quarters ACB had negative earnings surprises; the latest report they missed by -550%. Aurora Cannabis Inc. (ACB)is reporting for the quarter ending June 30, 2022. Zacks Investment Research reports that the 2022 Price to Earnings ratio for ACB is -0.89 vs. an industry ratio of 2.50. |
36489.0 | 2022-09-18 00:00:00 UTC | 7 Stocks Reporting Earnings the Week of Sept. 19 | ACB | https://www.nasdaq.com/articles/7-stocks-reporting-earnings-the-week-of-sept.-19 | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Earnings for the April through June period of this year conclude this week with prints from several notable companies, including a major big-box retailer, shipping company and automotive firm.
Corporate earnings for the second quarter held up fairly well, with 75% of companies listed in the benchmark S&P 500 index reporting better-than-expected earnings per share, and 70% announcing better revenues. This is despite continued economic headwinds in the form of inflation, rising interest rates, war in Europe, and ongoing logistic and supply chain problems.
Going forward, it will be interesting to see if Corporate America can continue to remain resilient in the face of darkening economic skies. Of course, if we enter a recession as many economists forecast, all bets will be off. Here are seven companies reporting earnings the week of Sept. 19.
AZO AutoZone $2,167.01
ACB Aurora Cannabis $1.46
GIS General Mills $75.48
LEN Lennar $75.68
COST Costco $505.50
FDX FedEx $162.33
ACN Accenture $274.75
Stocks Reporting Earnings: AutoZone (AZO)
Source: Robert Gregory Griffeth / Shutterstock.com
The week begins with a print from the largest retailer of aftermarket automotive parts and accessories in the U.S.
Memphis, Tennessee-based AutoZone (NYSE:AZO) has fared better than most this year, having gained 3% in the year to date. The company continues to benefit from a strong car market, particularly for used or second-hand vehicles that consumers are turning toward as prices for new cars, trucks and SUVs continue to climb higher.
Analysts who cover AutoZone expect the company to report earnings per share of $38.38 and revenues of $5.15 billion when it reports on Sept. 19. Industry observers will also be watching the results closely for any signs that the auto industry is beginning to slow down and succumb to inflationary pressures.
There also continues to be speculation that management might announce a stock split given that AZO shares are currently trading above $2,000.
Aurora Cannabis (ACB)
Source: Shutterstock
Earnings reports have been cause for dread at Canada’s Aurora Cannabis (NASDAQ:ACB) over the past year. The struggling cannabis retailer has seen its stock decimated this year, down 73% since January. At the end of June, the company announced that it is cutting 12% of its workforce as it seeks to achieve $90 million in annual cost savings.
Prior to the job cuts, Aurora Cannabis announced plans to close three manufacturing plants, as well as an outdoor grow site. Like all legal cannabis companies in neighboring Canada, Aurora continues to struggle with a robust black market for the recreational drug, as well as slumping demand and high government taxes on its products. Analysts forecast that Aurora Cannabis will report an earnings per share loss of 16 cents on revenues of $38.74 million when it announces its latest numbers. Some analysts also expect further downsizing.
Stocks Reporting Earnings: General Mills (GIS)
Source: JHVEPhoto / Shutterstock.com
Food giant General Mills (NYSE:GIS) has been one of the better investments anyone could have made this year. Its stock has gained a robust 11% since January. Most investors would kill for that kind of return in this downbeat market.
The Minneapolis-based company’s wide variety of brands, which include Betty Crocker baking, Annie’s macaroni and cheese, and Cheerios cereal, have proven resilient to inflation.
Many analysts are touting General Mills as a strong and reliable value stock that is ideal for these troubled times. In addition to its share price appreciation this year, the company pays a safe and hearty dividend that currently yields 2.9%, and the company is buying back nearly $1 billion of its own shares.
Analysts anticipate that General Mills will report quarterly earnings per share of $1 on revenues of $4.7 billion when it reports on September 21.
Lennar (LEN)
Source: madamF via Shutterstock
The U.S. housing market is slumping amid higher mortgage rates. The latest numbers showed that weekly mortgage demand fell 1.2% as the average mortgage rate in the U.S. topped 6%. On a year-over-year basis, mortgage demand is down 29%. This is not good news for Lennar (NYSE:LEN), the second-largest home construction company in the U.S.
The housing downturn may explain why Lennar stock has declined 36% this year. The company will be seeking to reassure nervous shareholders and analysts that it can continue to build new homes as demand softens across the country. This is no easy task considering that interest rates are widely expected to continue rising through the remainder of this year and into 2023. Wall Street is looking for Lennar to report earnings per share of $4.91 on revenues of $9.03 billion.
Stocks Reporting Earnings: Costco (COST)
Source: ARTYOORAN / Shutterstock.com
Big-box retailer Costco’s (NASDAQ:COST) earnings are always carefully parsed by investors and analysts. Not only do the financial results demonstrate how the Seattle-based company is performing, they also serve as a bellwether for how consumer spending is holding up. Costco has managed to offset some of the impacts of inflation by selling gasoline that is cheaper than at most competing locations, as well as more affordable items ranging from milk to meat. However, the company has not been completely immune to the effects of higher consumer prices.
So far this year, COST stock has declined 11% to trade just under $510 a share. Even with the decline, the stock continues to look somewhat expensive with a price-earnings (P/E) ratio of 40x. Still, the company and its stock should come through the current market turmoil in fine shape. Costco’s earnings have held up reasonably well this year, with the company previously reporting that its revenue increased 16% year over year to $52.6 billion and its earnings per share grew 10.5% to $3.04.
Analysts expect Costco to report earnings per share of $4.16 on revenues of $72.06 billion when it announces its financial results Sept. 22.
FedEx (FDX)
Source: Antonio Gravante / Shutterstock.com
It’s a new era at shipping and logistics company FedEx (NYSE:FDX) with newly installed chief executive officer Raj Subramaniam. In fact, Subramaniam is the first new CEO that FedEx has ever had following the retirement of Fred Smith, who started the company back in 1973. However, Subramaniam has quickly put his stamp on FedEx, announcing shortly after assuming the CEO role that he is hiking the company’s dividend by 53%.
As the new head of the company, Subramaniam must convince Wall Street that FedEx can continue to thrive coming out of the pandemic. So far this year, FDX stock has fallen 37% on growing concerns about waning demand, as well as the impacts of higher fuel costs and war in Europe on the company’s bottom line. Look for Subramaniam to reassure investors when FedEx announces its results on Sept. 22.
Analysts have forecast that FedEx will announce earnings per share of $5.14 and revenues of $23.58 billion.
Stocks Reporting Earnings: Accenture (ACN)
Source: Tada Images/ShutterStock.com
Irish company Accenture (NYSE:ACN), which is focused on information technology services and consulting, has seen its stock knocked down 32% this year. However, with 710,000 employees worldwide and annual revenues in excess of $50 billion, nobody should count Accenture down and out. The company’s earnings and revenues are forecast to grow 21.4% and 21.9% respectively this year.
Plus, Accenture continues to grow through a series of international acquisitions. The company’s previous earnings disappointed, but the poor performance was mostly due to its operations in Russia, which took a hit following that country’s invasion of Ukraine. Accenture has since announced that it is discontinuing all of its operations in Russia. Analysts have penciled in that Accenture will report earnings per share of $2.58 on revenues of $15.4 billion.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
The post 7 Stocks Reporting Earnings the Week of Sept. 19 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AZO AutoZone $2,167.01 ACB Aurora Cannabis $1.46 GIS General Mills $75.48 LEN Lennar $75.68 COST Costco $505.50 FDX FedEx $162.33 ACN Accenture $274.75 Stocks Reporting Earnings: AutoZone (AZO) Source: Robert Gregory Griffeth / Shutterstock.com The week begins with a print from the largest retailer of aftermarket automotive parts and accessories in the U.S. Memphis, Tennessee-based AutoZone (NYSE:AZO) has fared better than most this year, having gained 3% in the year to date. Aurora Cannabis (ACB) Source: Shutterstock Earnings reports have been cause for dread at Canada’s Aurora Cannabis (NASDAQ:ACB) over the past year. Like all legal cannabis companies in neighboring Canada, Aurora continues to struggle with a robust black market for the recreational drug, as well as slumping demand and high government taxes on its products. | AZO AutoZone $2,167.01 ACB Aurora Cannabis $1.46 GIS General Mills $75.48 LEN Lennar $75.68 COST Costco $505.50 FDX FedEx $162.33 ACN Accenture $274.75 Stocks Reporting Earnings: AutoZone (AZO) Source: Robert Gregory Griffeth / Shutterstock.com The week begins with a print from the largest retailer of aftermarket automotive parts and accessories in the U.S. Memphis, Tennessee-based AutoZone (NYSE:AZO) has fared better than most this year, having gained 3% in the year to date. Aurora Cannabis (ACB) Source: Shutterstock Earnings reports have been cause for dread at Canada’s Aurora Cannabis (NASDAQ:ACB) over the past year. Stocks Reporting Earnings: General Mills (GIS) Source: JHVEPhoto / Shutterstock.com Food giant General Mills (NYSE:GIS) has been one of the better investments anyone could have made this year. | AZO AutoZone $2,167.01 ACB Aurora Cannabis $1.46 GIS General Mills $75.48 LEN Lennar $75.68 COST Costco $505.50 FDX FedEx $162.33 ACN Accenture $274.75 Stocks Reporting Earnings: AutoZone (AZO) Source: Robert Gregory Griffeth / Shutterstock.com The week begins with a print from the largest retailer of aftermarket automotive parts and accessories in the U.S. Memphis, Tennessee-based AutoZone (NYSE:AZO) has fared better than most this year, having gained 3% in the year to date. Aurora Cannabis (ACB) Source: Shutterstock Earnings reports have been cause for dread at Canada’s Aurora Cannabis (NASDAQ:ACB) over the past year. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Earnings for the April through June period of this year conclude this week with prints from several notable companies, including a major big-box retailer, shipping company and automotive firm. | AZO AutoZone $2,167.01 ACB Aurora Cannabis $1.46 GIS General Mills $75.48 LEN Lennar $75.68 COST Costco $505.50 FDX FedEx $162.33 ACN Accenture $274.75 Stocks Reporting Earnings: AutoZone (AZO) Source: Robert Gregory Griffeth / Shutterstock.com The week begins with a print from the largest retailer of aftermarket automotive parts and accessories in the U.S. Memphis, Tennessee-based AutoZone (NYSE:AZO) has fared better than most this year, having gained 3% in the year to date. Aurora Cannabis (ACB) Source: Shutterstock Earnings reports have been cause for dread at Canada’s Aurora Cannabis (NASDAQ:ACB) over the past year. Analysts expect Costco to report earnings per share of $4.16 on revenues of $72.06 billion when it announces its financial results Sept. 22. |
36490.0 | 2022-09-15 00:00:00 UTC | 2 Growth Stocks That Are Down 80% From Their Highs | ACB | https://www.nasdaq.com/articles/2-growth-stocks-that-are-down-80-from-their-highs | nan | nan | Buying shares on a dip in price is sometimes seen as a good strategy, especially when it comes to a blue-chip stock that's likely to recover. After all, if it's a sound business and it's cheaper to buy, it should make for a solid investment to hang on to in your portfolio. But in the world of meme stocks and high-risk investments, many stocks today are down by much more than just 10%, 20%, or even 50%.
A couple of once-promising growth stocks that are down 80% or more from their highs are Aurora Cannabis (NASDAQ: ACB) and Upstart Holdings (NASDAQ: UPST). Are these stocks destined to fall lower, or should you buy them at their significantly reduced valuations?
1. Aurora Cannabis
Canadian-based pot producer Aurora Cannabis was once one of the top cannabis stocks to invest in, going head-to-head with rival Canopy Growth for the top spot in the industry. Today, however, it's struggling to generate any consistent growth, and it remains unprofitable. Trading at around $1.50, the stock is down a whopping 82% from its 52-week high of $8.69 that it hit last November.
The reason for the stock's abysmal performance can be summarized through just two charts:
ACB Revenue (Quarterly YoY Growth) data by YCharts
Investors are likely unconvinced at this point with bullish arguments that Aurora is working on cost-savings initiatives aimed to bring down expenses -- as well as working toward adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability.
Those aren't new strategies for the company, but that's what the carrot remains today for long-term investors. Whether Aurora posts an adjusted profit may be moot anyway, since this is, after all, primarily a growth stock, and the one thing it needs to deliver on is growth.
For those reasons, I would remain skeptical about Aurora. The only scenario where I would expect to see Aurora's share price increase over the next year would be due to a reverse stock split (which doesn't unfortunately result in any profits for investors). And that may not be that far away, given how closely the stock is to the $1 mark -- it needs to stay above that to remain on the Nasdaq.
Despite its significant decline in value, Aurora isn't a stock worth taking a chance on today.
2. Upstart Holdings
An even more beaten-down stock than Aurora is Upstart Holdings. The lending company, which uses artificial intelligence to help it make more intelligent decisions on potential borrowers, has been in a steep decline for multiple reasons.
For one, its top and bottom lines have been struggling. And a weakening economy could further dampen these numbers.
UPST Revenue (Quarterly YoY Growth) data by YCharts
But there's also another reason a crash looked to be inevitable for the fintech stock; its valuation was out of control. Last year, there were times the stock was trading at more than 400 times its earnings. Today, it's down to a more modest price-to-earnings multiple of 31. That's much more of a tenable valuation for investors -- and why the stock could make for an attractive buy.
Upstart stock is currently trading at less than $28, which is 93% lower than its 52-week high of $401.49. But while it may seem like a cheap buy on the dip, investors should be careful not to ignore the red flags that the stock possesses. Unless you're willing to take on the risk of a slowing economy and rising interest rates, and the effect that may have on the lending business, you're better off steering clear of Upstart.
For long-term investors who can remain patient, however, the current valuation could make it a worthwhile buy.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Upstart Holdings, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The reason for the stock's abysmal performance can be summarized through just two charts: ACB Revenue (Quarterly YoY Growth) data by YCharts Investors are likely unconvinced at this point with bullish arguments that Aurora is working on cost-savings initiatives aimed to bring down expenses -- as well as working toward adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. A couple of once-promising growth stocks that are down 80% or more from their highs are Aurora Cannabis (NASDAQ: ACB) and Upstart Holdings (NASDAQ: UPST). The only scenario where I would expect to see Aurora's share price increase over the next year would be due to a reverse stock split (which doesn't unfortunately result in any profits for investors). | A couple of once-promising growth stocks that are down 80% or more from their highs are Aurora Cannabis (NASDAQ: ACB) and Upstart Holdings (NASDAQ: UPST). The reason for the stock's abysmal performance can be summarized through just two charts: ACB Revenue (Quarterly YoY Growth) data by YCharts Investors are likely unconvinced at this point with bullish arguments that Aurora is working on cost-savings initiatives aimed to bring down expenses -- as well as working toward adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. UPST Revenue (Quarterly YoY Growth) data by YCharts But there's also another reason a crash looked to be inevitable for the fintech stock; its valuation was out of control. | A couple of once-promising growth stocks that are down 80% or more from their highs are Aurora Cannabis (NASDAQ: ACB) and Upstart Holdings (NASDAQ: UPST). The reason for the stock's abysmal performance can be summarized through just two charts: ACB Revenue (Quarterly YoY Growth) data by YCharts Investors are likely unconvinced at this point with bullish arguments that Aurora is working on cost-savings initiatives aimed to bring down expenses -- as well as working toward adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. Aurora Cannabis Canadian-based pot producer Aurora Cannabis was once one of the top cannabis stocks to invest in, going head-to-head with rival Canopy Growth for the top spot in the industry. | A couple of once-promising growth stocks that are down 80% or more from their highs are Aurora Cannabis (NASDAQ: ACB) and Upstart Holdings (NASDAQ: UPST). The reason for the stock's abysmal performance can be summarized through just two charts: ACB Revenue (Quarterly YoY Growth) data by YCharts Investors are likely unconvinced at this point with bullish arguments that Aurora is working on cost-savings initiatives aimed to bring down expenses -- as well as working toward adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. Those aren't new strategies for the company, but that's what the carrot remains today for long-term investors. |
36491.0 | 2022-09-09 00:00:00 UTC | Was Aurora's Bevo Farms Deal Worth it for CAD$45 Million? What to Expect at The Upcoming Q4 Results | ACB | https://www.nasdaq.com/articles/was-auroras-bevo-farms-deal-worth-it-for-cad%2445-million-what-to-expect-at-the-upcoming-q4 | nan | nan | T
hese last few weeks have been a busy period for the Edmonton headquartered weed producer and retailer, Aurora Cannabis (CA:ACB, US:ACB).
On the 25th of August, Aurora announced that they had acquired the controlling interest in firm Bevo Agtech Inc, which is the sole parent of vegetable plant and floral wholesaler Bevo Farms.
The initial consideration paid for the controlling interest was CAD$45 million and up to CAD$12 million payable over the next three years subject to the company hitting certain financial milestones.
Bevo is considered to be one of the largest suppliers of propagated vegetables and ornamental plants in North America and was founded in 1986. The company currently operates 63 acres of greenhouses in British Columbia
Bevo is a profitable, cash flow positive business that has shown annual growth over the past decade through process improvements and facility expansions. Aurora’s management has also seen the potential to drive long term value to the firm's existing cannabis business through the use of Bevo’s industry leading propagation expertise.
For the 12 month period to the 30th of June 2022, Bevo generated CAD$39 million in revenue and Adjusted EBITDA of CAD$9 million.
Aurora through the transaction purchased 50.1% of Bevo’s outstanding shares and will take a controlling position on the company's Board while financially consolidating the company.
Bevo’s existing management team will continue to be significant shareholders in the company and will continue to work for the organisation while embarking on a robust growth plan.
Aurora’s CEO Miguel Martin commented on the transaction stating, “We expect this investment and collaboration between industry leaders will drive significant shareholder value and synergies for both parties”
In addition to the transaction, Bevo entered into an agreement to acquire Aurora’s Sky facility in Edmonton, Alberta. Management has noted that up to CAD$25 million could be payable over time by Bevo to Aurora, based on certain milestones.
Aurora and other Cannabis stocks in general have seen weakening valuations since the beginning of 2022 due to an oversupply and falling market price sale price for the commodity.
These stocks received a boost to their prices over July when news was released, stating that the US Senate would introduce a decriminalization bill, with a report from Fintel journalists, that can be found here.
The pain could be over soon enough for Aurora’s stock price which continues to stagnate as management recently highlighted that the company remains on track to become Adjusted EBITDA positive by the end of the first half in FY23.
In a world where rising risk free rates have materially changed the way analysts value stocks, profitable growth is rewarded over companies that continue to run at losses.
Analysts John Zamparo & Monica Lutz from CIBC Capital Markets exerted caution around the ability for ACB to meet their guidance of becoming Adj EBITDA positive in the second half of FY23, given the positive earnings from Bevo are skewed towards the second half of the year, given growing seasonality trends. CIBC remains ‘neutral’ rated on the stock with a CAD$3.75 target price.
The upcoming fourth quarter earnings are scheduled for the 20th of September after market and could provide additional colour around the outlook for Financial Year 2023.
The street is looking for Aurora to generate CAD$50.6 million for the final quarter, taking the full year to around ~CAD$222 million.
Analysts are expecting ACB to generate Adjusted EBITDA of around negative -CAD$7.6 million, which would be an improvement from the negative -CAD$12.3 million in Q3.
For FY23, analysts are now forecasting Aurora to generate positive adjusted EBITDA of ~CAD$4.7 million, following management's commentary about becoming break-even over the year.
Despite the weaking ACB share price, options sentiment remains bullish with a Fintel put/call ratio of 0.18. This ratio is defined by the number of open call and put interest in the options market for a stock. This ratio while being bullish over the past 3 months, has strengthened with the value trending lower towards zero, suggesting call interest growth continues to outweigh put interest.
By Ben Ward for Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | hese last few weeks have been a busy period for the Edmonton headquartered weed producer and retailer, Aurora Cannabis (CA:ACB, US:ACB). Analysts John Zamparo & Monica Lutz from CIBC Capital Markets exerted caution around the ability for ACB to meet their guidance of becoming Adj EBITDA positive in the second half of FY23, given the positive earnings from Bevo are skewed towards the second half of the year, given growing seasonality trends. Analysts are expecting ACB to generate Adjusted EBITDA of around negative -CAD$7.6 million, which would be an improvement from the negative -CAD$12.3 million in Q3. | Analysts are expecting ACB to generate Adjusted EBITDA of around negative -CAD$7.6 million, which would be an improvement from the negative -CAD$12.3 million in Q3. Despite the weaking ACB share price, options sentiment remains bullish with a Fintel put/call ratio of 0.18. hese last few weeks have been a busy period for the Edmonton headquartered weed producer and retailer, Aurora Cannabis (CA:ACB, US:ACB). | hese last few weeks have been a busy period for the Edmonton headquartered weed producer and retailer, Aurora Cannabis (CA:ACB, US:ACB). Analysts John Zamparo & Monica Lutz from CIBC Capital Markets exerted caution around the ability for ACB to meet their guidance of becoming Adj EBITDA positive in the second half of FY23, given the positive earnings from Bevo are skewed towards the second half of the year, given growing seasonality trends. Analysts are expecting ACB to generate Adjusted EBITDA of around negative -CAD$7.6 million, which would be an improvement from the negative -CAD$12.3 million in Q3. | Despite the weaking ACB share price, options sentiment remains bullish with a Fintel put/call ratio of 0.18. hese last few weeks have been a busy period for the Edmonton headquartered weed producer and retailer, Aurora Cannabis (CA:ACB, US:ACB). Analysts John Zamparo & Monica Lutz from CIBC Capital Markets exerted caution around the ability for ACB to meet their guidance of becoming Adj EBITDA positive in the second half of FY23, given the positive earnings from Bevo are skewed towards the second half of the year, given growing seasonality trends. |
36492.0 | 2022-09-06 00:00:00 UTC | Why Tilray, Canopy Growth, and Aurora Cannabis Dropped Today | ACB | https://www.nasdaq.com/articles/why-tilray-canopy-growth-and-aurora-cannabis-dropped-today | nan | nan | What happened
Stocks in the cannabis sector often move in tandem, which is the case again today as the trading week kicked off after a holiday weekend in the U.S. Shares of Canadian names such as Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped between 5% and 7% in early trading. As of noon ET, Tilray was still down 4%, while Canopy Growth and Aurora remained 3.2% and 5.4% lower, respectively.
Image source: Getty Images.
So what
The Nasdaq Composite Index on which these three stocks trade is the laggard of the major U.S. indexes this morning, helping to explain the stock's moves lower. There hasn't been any company-specific news leading the sector lower today. Tilray, in fact, released what should be considered some positive news regarding its European business.
But the lack of progress toward federal legalization in the U.S. has been an overhang on virtually all companies in the industry recently. With a midterm election on the horizon, cannabis investors are hoping to see more support offered for legislation on the topic.
Now what
Tilray announced today that it is leading a policy roundtable with German regulators as that country moves closer to adult-use marijuana legalization. The company said Germany's drug commissioner presented a plan at the meeting for an initial draft of legislation geared toward adult-use cannabis legalization would be presented in the coming months.
Tilray is perhaps the company best positioned if that comes to fruition. The company is already a leader in Europe's medical cannabis industry, with a 20% market share in Germany. With that infrastructure in place, Tilray would be able to add the recreational-use market in Europe to help springboard its goal of realizing $4 billion in annual revenue by the middle of 2024.
Canopy Growth is also pursuing growth in international markets and reported revenue nearly doubled year over year from its international medical sales in the most recently reported quarterly period. That was primarily from sales in Israel and Australia, but the company also said its German sales force is working to expand its pharmacy network.
Investors really want to see the U.S. market open up for these Canadian firms, however. There is still not a consensus among politicians to garner needed votes on federal legislation, but President Biden himself discussed the issue with U.S. Senate candidate John Fetterman over the weekend, reports industry publication Marijuana Moment.
Fetterman is currently Pennsylvania's lieutenant governor and a long-standing advocate for cannabis legalization. Few details of his conversation with the president were reported, but having the topic on the table is a first step for backers of decriminalization.
It will likely take action, however, to drive these stocks higher. Whether discussions will lead to anything concrete is unknown, which helps explain both today's move in these stocks and the greater than 50% decline of all three year to date.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Stocks in the cannabis sector often move in tandem, which is the case again today as the trading week kicked off after a holiday weekend in the U.S. Shares of Canadian names such as Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped between 5% and 7% in early trading. Now what Tilray announced today that it is leading a policy roundtable with German regulators as that country moves closer to adult-use marijuana legalization. With that infrastructure in place, Tilray would be able to add the recreational-use market in Europe to help springboard its goal of realizing $4 billion in annual revenue by the middle of 2024. | What happened Stocks in the cannabis sector often move in tandem, which is the case again today as the trading week kicked off after a holiday weekend in the U.S. Shares of Canadian names such as Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped between 5% and 7% in early trading. The company is already a leader in Europe's medical cannabis industry, with a 20% market share in Germany. Canopy Growth is also pursuing growth in international markets and reported revenue nearly doubled year over year from its international medical sales in the most recently reported quarterly period. | What happened Stocks in the cannabis sector often move in tandem, which is the case again today as the trading week kicked off after a holiday weekend in the U.S. Shares of Canadian names such as Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped between 5% and 7% in early trading. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | What happened Stocks in the cannabis sector often move in tandem, which is the case again today as the trading week kicked off after a holiday weekend in the U.S. Shares of Canadian names such as Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped between 5% and 7% in early trading. The company is already a leader in Europe's medical cannabis industry, with a 20% market share in Germany. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. |
36493.0 | 2022-09-01 00:00:00 UTC | Why Pot Stocks Are Going Up In Smoke Today | ACB | https://www.nasdaq.com/articles/why-pot-stocks-are-going-up-in-smoke-today | nan | nan | What happened
Pot stocks are taking it on the chin yet again today. As of 2:01 p.m. ET Thursday afternoon, shares of Aurora Cannabis (NASDAQ: ACB) were down by 6.8%, Canopy Growth's (NASDAQ: CGC) equity was underwater by 6.8%, OrganiGram Holdings' (NASDAQ: OGI) share price was lower by 4.25%, and Tilray Brands (NASDAQ: TLRY) had shed another 6.32% of its value.
Over the past five trading sessions, Aurora Cannabis, Canopy Growth, OrganiGram Holdings, and Tilray Brands have dipped by more than 10%. For the year, these four pot stocks are all down by well over 40%.
Image source: Getty Images.
So what
Two issues seem to be weighing on these four Canadian pot stocks of late:
Last Monday, the White House said it "has nothing more to add" in regards to the topic of marijuana legalization during a press briefing. The subject came up when a reporter asked White House Press Secretary Karine Jean-Pierre if President Biden was prepared to fulfill his campaign promise on cannabis decriminalization. To date, the administration has largely sidestepped this hot button issue in order to make headway on more pressing agenda items such as climate change, college loan forgiveness, and inflation. The Biden administration, in short, doesn't seem willing to push marijuana legalization to the top of its priority list.
Last Friday, Federal Reserve Chairman Jerome Powell said that more interest rate hikes are coming down the pike in order to tamp down inflation. Stocks, as a result, have largely edged lower over the past week in response to this news. Pot stocks have been particularly hard hit by this announcement because investors appear unwilling to own these cash-flow-negative companies ahead of a possible economic downturn. Aurora Cannabis, Canopy Growth, OrganiGram, and Tilray Brands all posted net losses in their most recent fiscal quarters.
Now what
Should investors start to bottom fish on this beaten-down space? That's a hard call to make. Aurora Cannabis, Canopy Growth, and Tilray Brands all ought to benefit from the eventual legalization of adult-use marijuana for recreational purposes in Germany. What's more, OrganiGram has proven itself to be a shrewd operator. The company's craft cannabis brands, in fact, have been rapidly gaining market share in recent quarters.
All that being said, this bear market only seems to care about profitability -- a feature that has largely eluded these four companies so far. Put simply, the market may continue to punish these four pot stocks until their businesses begin to turn a profit on a consistent basis. That doesn't necessarily mean that investors shouldn't start to nibble on these names, but stakeholders should definitely be willing to hold for the long term.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ET Thursday afternoon, shares of Aurora Cannabis (NASDAQ: ACB) were down by 6.8%, Canopy Growth's (NASDAQ: CGC) equity was underwater by 6.8%, OrganiGram Holdings' (NASDAQ: OGI) share price was lower by 4.25%, and Tilray Brands (NASDAQ: TLRY) had shed another 6.32% of its value. So what Two issues seem to be weighing on these four Canadian pot stocks of late: Last Monday, the White House said it "has nothing more to add" in regards to the topic of marijuana legalization during a press briefing. The subject came up when a reporter asked White House Press Secretary Karine Jean-Pierre if President Biden was prepared to fulfill his campaign promise on cannabis decriminalization. | ET Thursday afternoon, shares of Aurora Cannabis (NASDAQ: ACB) were down by 6.8%, Canopy Growth's (NASDAQ: CGC) equity was underwater by 6.8%, OrganiGram Holdings' (NASDAQ: OGI) share price was lower by 4.25%, and Tilray Brands (NASDAQ: TLRY) had shed another 6.32% of its value. Over the past five trading sessions, Aurora Cannabis, Canopy Growth, OrganiGram Holdings, and Tilray Brands have dipped by more than 10%. Aurora Cannabis, Canopy Growth, OrganiGram, and Tilray Brands all posted net losses in their most recent fiscal quarters. | ET Thursday afternoon, shares of Aurora Cannabis (NASDAQ: ACB) were down by 6.8%, Canopy Growth's (NASDAQ: CGC) equity was underwater by 6.8%, OrganiGram Holdings' (NASDAQ: OGI) share price was lower by 4.25%, and Tilray Brands (NASDAQ: TLRY) had shed another 6.32% of its value. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Aurora Cannabis Inc. wasn't one of them! See the 10 stocks *Stock Advisor returns as of August 17, 2022 George Budwell has no position in any of the stocks mentioned. | ET Thursday afternoon, shares of Aurora Cannabis (NASDAQ: ACB) were down by 6.8%, Canopy Growth's (NASDAQ: CGC) equity was underwater by 6.8%, OrganiGram Holdings' (NASDAQ: OGI) share price was lower by 4.25%, and Tilray Brands (NASDAQ: TLRY) had shed another 6.32% of its value. For the year, these four pot stocks are all down by well over 40%. 10 stocks we like better than Aurora Cannabis Inc. |
36494.0 | 2022-08-31 00:00:00 UTC | CANADA STOCKS-TSX falls 0.69% to 19,378.44 | ACB | https://www.nasdaq.com/articles/canada-stocks-tsx-falls-0.69-to-19378.44 | nan | nan | * The Toronto Stock Exchange's TSX falls 0.69 percent to 19,378.44
* Leading the index were Bausch Health Companies Inc , up 17.3%, Aurora Cannabis Inc ACB.TO, up 6%, and Dye & Durham Ltd DND.TO, higher by 5.5%.
* Lagging shares were Laurentian Bank of Canada LB.TO, down 10.4%, ECN Capital Corp ECN.TO, down 3.8%, and Advantage Energy Ltd AAV.TO, lower by 3.7%.
* On the TSX 69 issues rose and 166 fell as a 0.4-to-1 ratio favored decliners. There were no new highs and 17 new lows, with total volume of 146.0 million shares.
* The most heavily traded shares by volume were Crescent Point Energy Corp CPG.TO, Suncor Energy Inc SU.TO and Baytex Energy Corp BTE.TO.
* The TSX's energy group .SPTTEN fell 1.98 points, or 0.8%, while the financials sector .SPTTFS slipped 2.77 points, or 0.8%.
* West Texas Intermediate crude futures CLc1 fell 2.92%, or $2.68, to $88.96 a barrel. Brent crude LCOc1 fell 2.83%, or $2.81, to $96.5 O/R
* The TSX is off 8.7% for the year.
This summary was machine generated August 31 at 20:03.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | * The Toronto Stock Exchange's TSX falls 0.69 percent to 19,378.44 * Leading the index were Bausch Health Companies Inc , up 17.3%, Aurora Cannabis Inc ACB.TO, up 6%, and Dye & Durham Ltd DND.TO, higher by 5.5%. * Lagging shares were Laurentian Bank of Canada LB.TO, down 10.4%, ECN Capital Corp ECN.TO, down 3.8%, and Advantage Energy Ltd AAV.TO, lower by 3.7%. * On the TSX 69 issues rose and 166 fell as a 0.4-to-1 ratio favored decliners. | * The Toronto Stock Exchange's TSX falls 0.69 percent to 19,378.44 * Leading the index were Bausch Health Companies Inc , up 17.3%, Aurora Cannabis Inc ACB.TO, up 6%, and Dye & Durham Ltd DND.TO, higher by 5.5%. * The most heavily traded shares by volume were Crescent Point Energy Corp CPG.TO, Suncor Energy Inc SU.TO and Baytex Energy Corp BTE.TO. * The TSX's energy group .SPTTEN fell 1.98 points, or 0.8%, while the financials sector .SPTTFS slipped 2.77 points, or 0.8%. | * The Toronto Stock Exchange's TSX falls 0.69 percent to 19,378.44 * Leading the index were Bausch Health Companies Inc , up 17.3%, Aurora Cannabis Inc ACB.TO, up 6%, and Dye & Durham Ltd DND.TO, higher by 5.5%. * The most heavily traded shares by volume were Crescent Point Energy Corp CPG.TO, Suncor Energy Inc SU.TO and Baytex Energy Corp BTE.TO. * The TSX's energy group .SPTTEN fell 1.98 points, or 0.8%, while the financials sector .SPTTFS slipped 2.77 points, or 0.8%. | * The Toronto Stock Exchange's TSX falls 0.69 percent to 19,378.44 * Leading the index were Bausch Health Companies Inc , up 17.3%, Aurora Cannabis Inc ACB.TO, up 6%, and Dye & Durham Ltd DND.TO, higher by 5.5%. * On the TSX 69 issues rose and 166 fell as a 0.4-to-1 ratio favored decliners. * The most heavily traded shares by volume were Crescent Point Energy Corp CPG.TO, Suncor Energy Inc SU.TO and Baytex Energy Corp BTE.TO. |
36495.0 | 2022-08-31 00:00:00 UTC | Aurora Cannabis Just Made an Unusual Move -- but Is It a Buy? | ACB | https://www.nasdaq.com/articles/aurora-cannabis-just-made-an-unusual-move-but-is-it-a-buy | nan | nan | Aurora Cannabis (NASDAQ: ACB) rocked the boat on Aug. 25 when it announced that it had acquired a 50.1% stake in Bevo Agtech, a provider of vegetables, flowers, and houseplants. The unusual deal cost the Canadian cannabis cultivator 45 million Canadian dollars up front, and it's also on the hook for up to CA$12 million in milestone payments over the next three years, assuming Bevo continues to grow as planned.
Now investors are debating whether the transaction changes much of anything for Aurora's stock over the next few years. Can Bevo help to transform Aurora into the more profitable version of itself that it envisions, or is this a case of "diworsification" rather than fruitful diversification?
Why getting into floristry might be a good idea
To set the stage for the deal, let's take a moment to recap Aurora's recent history. The last three years have been brutal for the cannabis grower, with its shares falling by more than 97%, quarterly revenue crashing by 28.6%, and its gross margin sharply deteriorating. The biggest cause of this abysmal performance was building too much manufacturing and cultivation capacity, relative to demand, in the Canadian recreational cannabis market.
While going big on producing cannabis allowed it to capture the leading position by revenue in the Canadian medicinal market as well as dominant positions in specific segments of international markets (as in Poland), its overhead costs forced it to close numerous facilities to stop burning so much cash. Management's transformation plan for the business is ongoing, and calls for it to reach positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first two quarters of 2023. Management also claims that the Bevo purchase will help achieve that goal.
From the second quarter of 2021 to Q2 this year, Bevo reported sales of CA$39 million and adjusted EBITDA of CA$9 million. That CA$9 million will indeed inch Aurora closer to positive adjusted EBITDA, and by quite a bit. In its fiscal Q3, which is its most recent quarter, the cultivator reported an adjusted EBITDA loss of CA$12.3 million.
So, if it can maintain that performance with the addition of Bevo, it'll be within striking distance of breaking even -- and potentially reach positivity within a quarter or two, just as planned. Because Bevo agreed to purchase one of Aurora's cultivation facilities (in Edmonton, Alberta) as part of the deal, it's even plausible that the company's expenditures on overhead will be put to more efficient use. But that doesn't necessarily make the stock worth buying for most investors.
It's best to watch this one play out from afar
One trouble with the Bevo acquisition is that it doesn't necessarily add much to Aurora's core capabilities. Management claims that the purchase "may have the potential to drive long-term value to Aurora's existing cannabis business via the application of Bevo's industry-leading plant propagation expertise," which isn't exactly the most committed stance on whether there are genuine synergies to take advantage of.
And while it's true that Bevo's earnings mean that the transaction is accretive, there's still the possibility of the company losing its ground and becoming a liability. It's hard to imagine much of a boom in the market for vegetables or decorative flowers, but it's easy to see how a recession could force consumers to cut spending on pretty plants or beds of grass for the yard.
Then there's the elephant in the room: The Canadian cannabis market is struggling with an overabundance of products. Nothing Aurora does (aside from continuing to scale down) can change that. Last year, cultivators were forced to destroy 26% of the country's annual production, accounting for 425 million grams of unpackaged and unsold product. That's not a market environment that most investors find thrilling.
Therefore, it's best to avoid buying shares of Aurora for now. If its net profit margin -- a metric that the business hasn't set a target for -- starts to improve, it'll be a sign that conditions have improved significantly and could continue to improve more. Until then, steer clear.
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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Aurora Cannabis (NASDAQ: ACB) rocked the boat on Aug. 25 when it announced that it had acquired a 50.1% stake in Bevo Agtech, a provider of vegetables, flowers, and houseplants. Because Bevo agreed to purchase one of Aurora's cultivation facilities (in Edmonton, Alberta) as part of the deal, it's even plausible that the company's expenditures on overhead will be put to more efficient use. Management claims that the purchase "may have the potential to drive long-term value to Aurora's existing cannabis business via the application of Bevo's industry-leading plant propagation expertise," which isn't exactly the most committed stance on whether there are genuine synergies to take advantage of. | Aurora Cannabis (NASDAQ: ACB) rocked the boat on Aug. 25 when it announced that it had acquired a 50.1% stake in Bevo Agtech, a provider of vegetables, flowers, and houseplants. The unusual deal cost the Canadian cannabis cultivator 45 million Canadian dollars up front, and it's also on the hook for up to CA$12 million in milestone payments over the next three years, assuming Bevo continues to grow as planned. From the second quarter of 2021 to Q2 this year, Bevo reported sales of CA$39 million and adjusted EBITDA of CA$9 million. | Aurora Cannabis (NASDAQ: ACB) rocked the boat on Aug. 25 when it announced that it had acquired a 50.1% stake in Bevo Agtech, a provider of vegetables, flowers, and houseplants. The unusual deal cost the Canadian cannabis cultivator 45 million Canadian dollars up front, and it's also on the hook for up to CA$12 million in milestone payments over the next three years, assuming Bevo continues to grow as planned. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Aurora Cannabis Inc. wasn't one of them! | Aurora Cannabis (NASDAQ: ACB) rocked the boat on Aug. 25 when it announced that it had acquired a 50.1% stake in Bevo Agtech, a provider of vegetables, flowers, and houseplants. But that doesn't necessarily make the stock worth buying for most investors. Then there's the elephant in the room: The Canadian cannabis market is struggling with an overabundance of products. |
36496.0 | 2022-08-30 00:00:00 UTC | These 2 Penny Stocks Have Tantalizing Growth Prospects | ACB | https://www.nasdaq.com/articles/these-2-penny-stocks-have-tantalizing-growth-prospects | nan | nan | Penny stocks, or equities trading at under $5 a share, are typically a no-go area for most investors. These low-priced stocks are generally too risky to consider owning because they frequently have low liquidity, are prone to wild price swings, sport outsize short-seller positions, and, more often than not, have poor underlying fundamentals. Still, the fact remains that penny stocks have comprised a disproportionate number of the best-performing stocks over the last decade.
Capital-intensive commercial operations in the areas of biotechnology, healthcare, and technology can force fledgling companies to rely heavily on public offerings to get off the ground. These repeated bouts of shareholder dilution, in turn, often push a company's share price into penny stock territory.
Image source: Getty Images.
The silver lining to this story is that the small group of companies that actually use these early public offerings to build successful businesses often yield enormous returns for shareholders. Armed with this insight, risk-tolerant investors might want to take a deeper look at Bionano Genomics (NASDAQ: BNGO) and OrganiGram Holdings (NASDAQ: OGI) right now.
Although these two penny healthcare stocks have been going through a brutal period in the market of late, both companies have been busy building out a solid foundation for long-term success. Here's why these two low-priced equities could turn out to be big winners over the new few years.
Bionano Genomics: A potential titan of genome mapping
Over the past 12 months, Bionano Genomics stock has lost a staggering 58% of its value. Worse still, the genome mapping specialist's shares are down by over 86% from their three-year high right now.
What went wrong? The answer is nothing went wrong from a business perspective. Bionano's flagship optical genome mapping system, known as Saphyr, has been steadily gobbling up market share, and the company's clinical services segment has been performing well of late. In fact, the biotech posted a record level of quarterly revenue in its most recent financial results. The long and short of it is that Bionano's novel genome mapping platform is gaining traction in the market.
Why did the market punish Bionano's stock so severely in 2022? The key reason is Bionano's prior valuation was a tad too rich based on the state of play in optical genome mapping. This fairly new bio-market was only worth a little over $100 million in total sales last year, reflecting the early-stage nature of this groundbreaking tech. As a result, Bionano's shares were trading at over 140 times forward-looking sales at their peak back in January 2021. Investors, in short, clearly got ahead of themselves on this one.
However, Bionano's stunning pullback in 2022 could turn out to be an incredible buying opportunity for long-term investors. There's no doubt that optical genome mapping will be an enormous market (several billion in annual sales) by the end of the decade and Bionano already sports a top-tier platform in this high-growth space. The bottom line is that this bio-penny stock could deliver life-changing returns for investors willing to buy and hold for the remainder of the decade.
OrganiGram Holdings: A craft cannabis play
While most Canadian cannabis companies have been struggling of late, OrganiGram has been a clear outlier. The Moncton, New Brunswick-based craft cannabis cultivator has been ripping market share away from industry titans such as Aurora Cannabis, Canopy Growth, and Tilray Brands in both the dried flower and edible product categories. At last count, OrganiGram now sports the largest share of the dried flower space in Canada, and it owns the third-largest chunk of the all-important gummy segment in its domestic market, according to a recent market analysis by Hifyre.
Even so, OrganiGram's shares have still lost an eye-catching 57.6% of their value over the past 12 months. OrganiGram's stock has arguably been unfairly punished by the market in response to the dour outlook for the industry's most visible names. The lowdown is that OrganiGram stock is now trading at a paltry 2.2 times fiscal 2023 projected sales. What's more, the company sports one of the strongest balance sheets within its peer group, with negligible levels of debt and $97 million (in USD) in cash and cash equivalents as of May 31.
The big picture is that OrganiGram has already proven itself to be an elite cannabis cultivator and a shrewd operator to boot. As a result, this craft cannabis company ought to eventually grow into one of the field's dominant players by the middle of the decade. OrganiGram thus has a shot at parabolic levels of sales growth in the years to come. Aggressive investors, in turn, may want to take a flier on this penny cannabis stock soon.
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George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends OrganiGram Holdings. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | These low-priced stocks are generally too risky to consider owning because they frequently have low liquidity, are prone to wild price swings, sport outsize short-seller positions, and, more often than not, have poor underlying fundamentals. Bionano's flagship optical genome mapping system, known as Saphyr, has been steadily gobbling up market share, and the company's clinical services segment has been performing well of late. There's no doubt that optical genome mapping will be an enormous market (several billion in annual sales) by the end of the decade and Bionano already sports a top-tier platform in this high-growth space. | The silver lining to this story is that the small group of companies that actually use these early public offerings to build successful businesses often yield enormous returns for shareholders. Armed with this insight, risk-tolerant investors might want to take a deeper look at Bionano Genomics (NASDAQ: BNGO) and OrganiGram Holdings (NASDAQ: OGI) right now. Bionano Genomics: A potential titan of genome mapping Over the past 12 months, Bionano Genomics stock has lost a staggering 58% of its value. | Bionano Genomics: A potential titan of genome mapping Over the past 12 months, Bionano Genomics stock has lost a staggering 58% of its value. 10 stocks we like better than Bionano Genomics, Inc When our award-winning analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of August 17, 2022 George Budwell has no position in any of the stocks mentioned. | Penny stocks, or equities trading at under $5 a share, are typically a no-go area for most investors. Bionano Genomics: A potential titan of genome mapping Over the past 12 months, Bionano Genomics stock has lost a staggering 58% of its value. Aggressive investors, in turn, may want to take a flier on this penny cannabis stock soon. |
36497.0 | 2022-08-29 00:00:00 UTC | Why Curaleaf, Canopy, and Aurora Cannabis Stocks Just Popped | ACB | https://www.nasdaq.com/articles/why-curaleaf-canopy-and-aurora-cannabis-stocks-just-popped | nan | nan | What happened
The stock market is finally recovering from a rather steep sell-off this morning, as we move into midday trading. Helping to lead the recovery, believe it or not, are cannabis stocks: As of 2:10 p.m. ET on Monday, both Curaleaf Holdings (OTC: CURLF) and Canopy Growth (NASDAQ: CGC) shares were up 5.6%, and tiny Aurora Cannabis (NASDAQ: ACB) had a 7.5% gain.
So what
As pot-news website MarijuanaMoment.net reports today, President Joe Biden will attend the Labor Day Parade in Pittsburgh on Monday. While he's there, Pennsylvania Lt. Gov. John Fetterman (who's running to become the next senator from the state) plans to try to convince President Biden of the need to decriminalize marijuana on the federal level.
But despite campaigning on a policy of decriminalizing marijuana, President Biden has been reluctant to throw his support behind full-scale legalization since winning office. A bill to legalize marijuana was introduced in the Senate in July, and there's been little progress in passing it. Six pro-marijuana senators sent the president a letter in July urging him to change his position.
I doubt the advice from a Senate candidate is going to move President Biden on this issue.
Now what
But even full-scale marijuana legalization wouldn't necessarily mean marijuana profits for investors, or at least not soon. In Canada, where pot has been legal for years, Canopy Growth and Aurora Cannabis are still losing money. In the U.S., Curaleaf is losing money, too. According to analysts polled by S&P Global Market Intelligence, it will be 2026 before Canopy or Aurora see their first profits from legal weed.
The situation seems a bit better for Curaleaf, though. As the pathway toward legalization gets clearer, analysts forecast that Curaleaf could earn its first-ever adjusted profit as early as this year, and by 2025 might turn profitable on the basis of generally accepted accounting principles (GAAP) as well. That makes the prospects for Curaleaf a bit brighter than those for its Canadian peers.
I don't place a lot of confidence in adjusted profit numbers, but beggars can't be choosers. If you're going to bet on a stock to profit from legalization, Curaleaf might be your best bet.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ET on Monday, both Curaleaf Holdings (OTC: CURLF) and Canopy Growth (NASDAQ: CGC) shares were up 5.6%, and tiny Aurora Cannabis (NASDAQ: ACB) had a 7.5% gain. So what As pot-news website MarijuanaMoment.net reports today, President Joe Biden will attend the Labor Day Parade in Pittsburgh on Monday. John Fetterman (who's running to become the next senator from the state) plans to try to convince President Biden of the need to decriminalize marijuana on the federal level. | ET on Monday, both Curaleaf Holdings (OTC: CURLF) and Canopy Growth (NASDAQ: CGC) shares were up 5.6%, and tiny Aurora Cannabis (NASDAQ: ACB) had a 7.5% gain. But despite campaigning on a policy of decriminalizing marijuana, President Biden has been reluctant to throw his support behind full-scale legalization since winning office. Now what But even full-scale marijuana legalization wouldn't necessarily mean marijuana profits for investors, or at least not soon. | ET on Monday, both Curaleaf Holdings (OTC: CURLF) and Canopy Growth (NASDAQ: CGC) shares were up 5.6%, and tiny Aurora Cannabis (NASDAQ: ACB) had a 7.5% gain. As the pathway toward legalization gets clearer, analysts forecast that Curaleaf could earn its first-ever adjusted profit as early as this year, and by 2025 might turn profitable on the basis of generally accepted accounting principles (GAAP) as well. If you're going to bet on a stock to profit from legalization, Curaleaf might be your best bet. | ET on Monday, both Curaleaf Holdings (OTC: CURLF) and Canopy Growth (NASDAQ: CGC) shares were up 5.6%, and tiny Aurora Cannabis (NASDAQ: ACB) had a 7.5% gain. Now what But even full-scale marijuana legalization wouldn't necessarily mean marijuana profits for investors, or at least not soon. In Canada, where pot has been legal for years, Canopy Growth and Aurora Cannabis are still losing money. |
36498.0 | 2022-08-25 00:00:00 UTC | Aurora Acquires Controlling Interest In Bevo | ACB | https://www.nasdaq.com/articles/aurora-acquires-controlling-interest-in-bevo | nan | nan | (RTTNews) - Aurora Cannabis Inc. (ACB, ACB.TO) said a subsidiary of the company has acquired a controlling interest in Bevo Agtech Inc., the sole parent of Bevo Farms Ltd. Bevo is North America's leading supplier of propagated agricultural plants. Total cash consideration paid by a unit of Aurora on closing was approximately $45 million. Up to an additional $12 million shall be payable by a subsidiary of Aurora to the Bevo selling shareholders over three years.
Also, Bevo entered into an agreement to acquire the company's Aurora Sky facility in Edmonton, Alberta through the acquisition of one of Aurora's wholly-owned subsidiaries. Up to $25 million could be payable over time by Bevo to Aurora in connection with this transaction.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (RTTNews) - Aurora Cannabis Inc. (ACB, ACB.TO) said a subsidiary of the company has acquired a controlling interest in Bevo Agtech Inc., the sole parent of Bevo Farms Ltd. Bevo is North America's leading supplier of propagated agricultural plants. Total cash consideration paid by a unit of Aurora on closing was approximately $45 million. Up to an additional $12 million shall be payable by a subsidiary of Aurora to the Bevo selling shareholders over three years. | (RTTNews) - Aurora Cannabis Inc. (ACB, ACB.TO) said a subsidiary of the company has acquired a controlling interest in Bevo Agtech Inc., the sole parent of Bevo Farms Ltd. Bevo is North America's leading supplier of propagated agricultural plants. Up to an additional $12 million shall be payable by a subsidiary of Aurora to the Bevo selling shareholders over three years. Also, Bevo entered into an agreement to acquire the company's Aurora Sky facility in Edmonton, Alberta through the acquisition of one of Aurora's wholly-owned subsidiaries. | (RTTNews) - Aurora Cannabis Inc. (ACB, ACB.TO) said a subsidiary of the company has acquired a controlling interest in Bevo Agtech Inc., the sole parent of Bevo Farms Ltd. Bevo is North America's leading supplier of propagated agricultural plants. Also, Bevo entered into an agreement to acquire the company's Aurora Sky facility in Edmonton, Alberta through the acquisition of one of Aurora's wholly-owned subsidiaries. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (RTTNews) - Aurora Cannabis Inc. (ACB, ACB.TO) said a subsidiary of the company has acquired a controlling interest in Bevo Agtech Inc., the sole parent of Bevo Farms Ltd. Bevo is North America's leading supplier of propagated agricultural plants. Total cash consideration paid by a unit of Aurora on closing was approximately $45 million. Up to an additional $12 million shall be payable by a subsidiary of Aurora to the Bevo selling shareholders over three years. |
36499.0 | 2022-08-24 00:00:00 UTC | Why Aurora Cannabis, Canopy Growth, and Tilray Are Glowing Green Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-growth-and-tilray-are-glowing-green-today | nan | nan | What happened
Canada's top-tier marijuana stocks are having a strong session Wednesday. As of 1:29 p.m. ET, Aurora Cannabis (NASDAQ: ACB) was in the green by 7.4%, Canopy Growth (NASDAQ: CGC) was up by 11.4%, and Tilray Brands (NASDAQ: TLRY) was higher by a respectable 3.5%.
What's causing investors to pile into these stocks today? Oddly enough, there haven't been any needle-moving developments in the world of cannabis lately. As a result, the industry seems to be simply going through yet another bear market rally today.
So what
Speaking to this point, Aurora, Canopy, and Tilray have all lost a staggering amount of their value in 2022. Bargain hunters, in turn, might be trying to time the bottom with these beaten-down names today.
The good news is that there is one clear-cut fundamental reason to think that a bottom may, in fact, be close at hand. Germany, which is the largest cannabis market in Europe in terms of sales, is steadily marching toward adult-use legalization for recreational purposes. The political process is still unfolding, but experts believe commercial sales could kick off as soon as 2024.
Aurora and Tilray both have ongoing grow operations in the country, and Canopy Growth has a strong commercial footprint there through its medical cannabis brand Spectrum Therapeutics. German adult-use legalization would thus be a boon for these three companies. The country, after all, has been pegged as a potential annual $16.6 billion market for legalized cannabis. The Canadian legal cannabis market, by contrast, is only expected to hit $12.2 billion in annual sales by 2030.
Now what
Are any of these Canadian pot stocks worth buying right now? My view is that Tilray is the best of the bunch. It arguably has the strongest foothold in Germany following the company's merger with Aphria, and it sports the highest predicted growth profile within its immediate peer group.
Having said that, Tilray is still a speculative growth stock. Global cannabis legalization is unfolding at a snail's pace, which has forced nearly every one of these companies to rely heavily on public offerings (shareholder dilution) to fund their operations.
Tilray, for its part, has been no exception to this industrywide trend. And until more large international markets such as Germany officially open up, the pot company's shareholders will probably have to continue to contend with regular capital raises.
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Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
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George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ET, Aurora Cannabis (NASDAQ: ACB) was in the green by 7.4%, Canopy Growth (NASDAQ: CGC) was up by 11.4%, and Tilray Brands (NASDAQ: TLRY) was higher by a respectable 3.5%. Aurora and Tilray both have ongoing grow operations in the country, and Canopy Growth has a strong commercial footprint there through its medical cannabis brand Spectrum Therapeutics. It arguably has the strongest foothold in Germany following the company's merger with Aphria, and it sports the highest predicted growth profile within its immediate peer group. | ET, Aurora Cannabis (NASDAQ: ACB) was in the green by 7.4%, Canopy Growth (NASDAQ: CGC) was up by 11.4%, and Tilray Brands (NASDAQ: TLRY) was higher by a respectable 3.5%. Aurora and Tilray both have ongoing grow operations in the country, and Canopy Growth has a strong commercial footprint there through its medical cannabis brand Spectrum Therapeutics. The country, after all, has been pegged as a potential annual $16.6 billion market for legalized cannabis. | ET, Aurora Cannabis (NASDAQ: ACB) was in the green by 7.4%, Canopy Growth (NASDAQ: CGC) was up by 11.4%, and Tilray Brands (NASDAQ: TLRY) was higher by a respectable 3.5%. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | ET, Aurora Cannabis (NASDAQ: ACB) was in the green by 7.4%, Canopy Growth (NASDAQ: CGC) was up by 11.4%, and Tilray Brands (NASDAQ: TLRY) was higher by a respectable 3.5%. Here's The Marijuana Stock You've Been Waiting For A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. Cannabis legalization is sweeping over North America – 19 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. |
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