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36500.0 | 2022-08-22 00:00:00 UTC | Why SNDL Stock Sank Today | ACB | https://www.nasdaq.com/articles/why-sndl-stock-sank-today | nan | nan | What happened
Shares of Canadian cannabis company SNDL (NASDAQ: SNDL) -- formerly known as Sundial Growers -- dropped today after announcing a new acquisition. SNDL investors don't seem too pleased with the idea, however. SNDL shares dropped as much as 10% on the news and were still down 5.3% as of 2:25 p.m. ET.
So what
SNDL will be acquiring Canada-based The Valens Company in a transaction worth the equivalent of about $106 million. Valens shareholders will receive about one third of a common share of SNDL in the all-stock transaction. But that didn't appear to make them happy, as Valens shares were also down by 10%.
Now what
SNDL already owned more than 10% of Valens after its latest investment made in May 2021. But that investment hasn't been a good one for SNDL, as it has bought into Valens at an average cost basis of about $8 per common share prior to today's announcement and a subsequent 1-for-3 reverse stock split in Valens shares. Valens traded for about $0.85 per share after the announcement today.
Considering the initial investment was made "for investment purposes," investors may feel today that SNDL is just pouring in good money after bad. SNDL says the combined companies will create a top-10 supplier in the Canadian market with an overall cannabis market share of 4.5%.
Vertical integration hasn't gone well for other Canadian cannabis firms, however. Aurora Cannabis, for example, moved in the other direction in 2020 by divesting its stake in Alcanna at a loss just over two years ago. Investors today seem to think SNDL may be following a similar path.
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 no position in any of the stocks mentioned. The Motley Fool has positions in and recommends The Valens Company 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. | So what SNDL will be acquiring Canada-based The Valens Company in a transaction worth the equivalent of about $106 million. Aurora Cannabis, for example, moved in the other direction in 2020 by divesting its stake in Alcanna at a loss just over two years ago. 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. | What happened Shares of Canadian cannabis company SNDL (NASDAQ: SNDL) -- formerly known as Sundial Growers -- dropped today after announcing a new acquisition. SNDL shares dropped as much as 10% on the news and were still down 5.3% as of 2:25 p.m. SNDL says the combined companies will create a top-10 supplier in the Canadian market with an overall cannabis market share of 4.5%. | What happened Shares of Canadian cannabis company SNDL (NASDAQ: SNDL) -- formerly known as Sundial Growers -- dropped today after announcing a new acquisition. But that investment hasn't been a good one for SNDL, as it has bought into Valens at an average cost basis of about $8 per common share prior to today's announcement and a subsequent 1-for-3 reverse stock split in Valens shares. SNDL says the combined companies will create a top-10 supplier in the Canadian market with an overall cannabis market share of 4.5%. | What happened Shares of Canadian cannabis company SNDL (NASDAQ: SNDL) -- formerly known as Sundial Growers -- dropped today after announcing a new acquisition. Considering the initial investment was made "for investment purposes," investors may feel today that SNDL is just pouring in good money after bad. The Motley Fool has positions in and recommends The Valens Company Inc. |
36501.0 | 2022-08-18 00:00:00 UTC | Why Canopy Growth's Shares Jumped 22.4% This Week | ACB | https://www.nasdaq.com/articles/why-canopy-growths-shares-jumped-22.4-this-week | nan | nan | What happened
Canadian cannabis company Canopy Growth (NASDAQ: CGC) saw its shares rise 22.4% so far this week, according to data from S&P Global Intelligence. The stock is still down more than 56% this year. Its 52-week low is $2.13 and its 52-week high is $18.
So what
Canopy's shares got a ride when Tilray, another cannabis company, said it had received approval to sell its medical marijuana in Poland. While the news only applies to Tilray, positive news for one Canadian marijuana company often affects the shares of others, as Tilray, Aurora Cannabis, and Canopy all saw big gains on Wednesday.
Some of the bounce was short-lived as investors are still wary after Canopy reported its fiscal first-quarter of 2023 on Aug. 5. In the report, net revenue was down 19% year over year, and the company reported its worst quarter in net income ever with a loss of $2.1 million Canadian dollars ($1.6 million), citing goodwill impairments of CA $1.7 million for the decline.
Now what
It's been a tough year for marijuana stocks, as even the companies that aren't losing money have seen their share prices fall. The AdvisorShares Pure Cannabis ETF is down more than 56% this year, and the ETFMG Alternative Harvest ETF has dropped more than 43% this year.
There are some positive signs for Canopy. It trimmed its debt by $263 million last month, and its shares are trading for only 1.4 times book value, so they aren't as overpriced as they were at one time.
But until Canopy begins turning a profit -- or at least appears to be headed in that direction -- it's hard to see investors taking a gamble on the stock. The company has also been quick to sell additional shares when the stock has risen, so that dilution has turned investors 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
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. | What happened Canadian cannabis company Canopy Growth (NASDAQ: CGC) saw its shares rise 22.4% so far this week, according to data from S&P Global Intelligence. So what Canopy's shares got a ride when Tilray, another cannabis company, said it had received approval to sell its medical marijuana in Poland. 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. | What happened Canadian cannabis company Canopy Growth (NASDAQ: CGC) saw its shares rise 22.4% so far this week, according to data from S&P Global Intelligence. While the news only applies to Tilray, positive news for one Canadian marijuana company often affects the shares of others, as Tilray, Aurora Cannabis, and Canopy all saw big gains on Wednesday. In the report, net revenue was down 19% year over year, and the company reported its worst quarter in net income ever with a loss of $2.1 million Canadian dollars ($1.6 million), citing goodwill impairments of CA $1.7 million for the decline. | While the news only applies to Tilray, positive news for one Canadian marijuana company often affects the shares of others, as Tilray, Aurora Cannabis, and Canopy all saw big gains on Wednesday. In the report, net revenue was down 19% year over year, and the company reported its worst quarter in net income ever with a loss of $2.1 million Canadian dollars ($1.6 million), citing goodwill impairments of CA $1.7 million for the decline. 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 stock is still down more than 56% this year. So what Canopy's shares got a ride when Tilray, another cannabis company, said it had received approval to sell its medical marijuana in Poland. The Motley Fool has no position in any of the stocks mentioned. |
36502.0 | 2022-08-17 00:00:00 UTC | CANADA STOCKS-Tech, material stocks drag TSX lower from over two-month high | ACB | https://www.nasdaq.com/articles/canada-stocks-tech-material-stocks-drag-tsx-lower-from-over-two-month-high | nan | nan | By Aniruddha Ghosh
Aug 17 (Reuters) - Canada's main stock index fell on Wednesday a day after hitting an over two-month high as technology and material stocks fell, although a rebound in oil prices boosted heavyweight energy shares and capped overall losses on the index.
At 10:55 a.m. ET (1455 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 86.42 points, or 0.43 percent, at 20,183.55.
The materials sector .GSPTTMT, which includes precious and base metals miners, lost 1.3% as gold futures GCc1 fell 0.2% amid jitters ahead of minutes of the U.S. Federal Reserve's July policy meet. GOL/
Shares of Lundin Mining Corp LUN.TO dropped 6.8% to the bottom of the TSX as Chile issued a series of measures against a copper mine owned by the company, after a sinkhole opened up near one of the mines.
Meanwhile, the S&P/TSX Information Technology Index fell 2.2%, dragged by a 8.8% slide in Hut 8 Mining HUT.TO after DA Davidson downgraded the bitcoin miner' stock to "neutral".
"There's a lot of short covering that's happening which has caused the market to rally quite substantially off of the lows, and I am sure they will pause as we try to digest more data as it comes to us," said James Telfser, Managing Partner and Portfolio Manager at Aventine Investment Counsel.
The Toronto market has rallied about 11% from its July trough but is still below 9.6% from its April highs.
The market received a lift on Tuesday after official data showed Canada's inflation eased slightly in July on lower gasoline prices, prompting the country's central bank governor to say that the annual rate might have peaked.
The energy sector .SPTTEN climbed 1.7% as U.S. crude CLc1 and Brent crude LCOc1 prices rebounded from six-month lows. O/R
The largest percentage gainers on the TSX were Canopy Growth Co , which jumped 9.9%, followed by a 6% rise in Aurora Cannabis .
Shares of peer Tilray Brands TLRY.TO gained 5.6% after it received an approval to commercialize its branded medical cannabis products in Poland.
(Reporting by Aniruddha Ghosh in Bengaluru; Editing by Maju Samuel and Krishna Chandra Eluri)
((Aniruddha.Ghosh@thomsonreuters.com; 91 83 83 81 2416;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The materials sector .GSPTTMT, which includes precious and base metals miners, lost 1.3% as gold futures GCc1 fell 0.2% amid jitters ahead of minutes of the U.S. Federal Reserve's July policy meet. Meanwhile, the S&P/TSX Information Technology Index fell 2.2%, dragged by a 8.8% slide in Hut 8 Mining HUT.TO after DA Davidson downgraded the bitcoin miner' stock to "neutral". The market received a lift on Tuesday after official data showed Canada's inflation eased slightly in July on lower gasoline prices, prompting the country's central bank governor to say that the annual rate might have peaked. | By Aniruddha Ghosh Aug 17 (Reuters) - Canada's main stock index fell on Wednesday a day after hitting an over two-month high as technology and material stocks fell, although a rebound in oil prices boosted heavyweight energy shares and capped overall losses on the index. Meanwhile, the S&P/TSX Information Technology Index fell 2.2%, dragged by a 8.8% slide in Hut 8 Mining HUT.TO after DA Davidson downgraded the bitcoin miner' stock to "neutral". The energy sector .SPTTEN climbed 1.7% as U.S. crude CLc1 and Brent crude LCOc1 prices rebounded from six-month lows. | By Aniruddha Ghosh Aug 17 (Reuters) - Canada's main stock index fell on Wednesday a day after hitting an over two-month high as technology and material stocks fell, although a rebound in oil prices boosted heavyweight energy shares and capped overall losses on the index. GOL/ Shares of Lundin Mining Corp LUN.TO dropped 6.8% to the bottom of the TSX as Chile issued a series of measures against a copper mine owned by the company, after a sinkhole opened up near one of the mines. The market received a lift on Tuesday after official data showed Canada's inflation eased slightly in July on lower gasoline prices, prompting the country's central bank governor to say that the annual rate might have peaked. | By Aniruddha Ghosh Aug 17 (Reuters) - Canada's main stock index fell on Wednesday a day after hitting an over two-month high as technology and material stocks fell, although a rebound in oil prices boosted heavyweight energy shares and capped overall losses on the index. Meanwhile, the S&P/TSX Information Technology Index fell 2.2%, dragged by a 8.8% slide in Hut 8 Mining HUT.TO after DA Davidson downgraded the bitcoin miner' stock to "neutral". The Toronto market has rallied about 11% from its July trough but is still below 9.6% from its April highs. |
36503.0 | 2022-08-17 00:00:00 UTC | Why Tilray Could End Up Going on an Acquisition Spree | ACB | https://www.nasdaq.com/articles/why-tilray-could-end-up-going-on-an-acquisition-spree | nan | nan | Cannabis producer Tilray (NASDAQ: TLRY) released its year-end numbers last month, and they confirmed one thing: The company has a lot of work to do in reaching its sky-high projections for fiscal 2024. If the company wants to hit its goal of $4 billion in annual sales two years from now, its top line would have to jump to more than six times what it posted this past fiscal year ($628 million). That leads to only one logical conclusion: Tilray will need to be incredibly active on the mergers and acquisition front if it hopes to get anywhere near that goal.
Tilray experienced growth of just 22% last year
For the fiscal year ended May 31, sales rose by just 22%. Without factoring in the effect of foreign exchange, that percentage jumped to 29%. Either way, that growth rate remains insufficient for a company that has been making incredibly bullish forecasts.
And in the Canadian market, things have been going from bad to worse for Tilray. Part of Tilray's goal in reaching $4 billion involves dominating the Canadian pot market. Its goal is to hit a market share of at least 30%. That seemed like a pipe dream when the company first announced those plans, back when its market share was about 16%.
On the company's most recent earnings call, however, Blair MacNeil, the president of the company's Canadian business, said that Tilray's retail market share was down to just 8.3%. MacNeil said he believes that there will be "significant consolidation" among licensed producers in Canada over the course of the next year.
To get to the type of numbers and growth that Tilray is hoping to achieve, there's no question that there will need to be a significant uptick in M&A. But the danger for investors is that that can mean lots of dilution ahead if Tilray pays for acquisitions with stock.
The company has been burning through cash
Tilray prides itself on being a business that is profitable on the basis of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) -- the latest quarter was its 13th consecutive with positive adjusted EBITDA.
However, what investors should be focused on more is the company's cash flow. In the most recent fiscal year, Tilray used up $177 million in the course of its daily operations. That's four times the $45 million it used a year ago. As of the end of May, the company's cash and cash equivalents were just under $416 million.
A lack of positive cash flow means that it's inevitable that Tilray will need to raise money to not just keep its operations going, but to also pursue the acquisitions it needs to meet its aggressive sales targets. For investors, that means that the share count may continue rising.
TLRY Shares Outstanding data by YCharts
Tilray is a risky stock that investors should avoid
The closer that Tilray gets to fiscal 2024, the riskier the pot stock becomes -- especially if there isn't a huge increase in revenue. If and when the day comes that the projection gets cut, the stock could be due for a serious decline.
Shares of Tilray are down 67% in the past year on the Toronto Stock Exchange, which is better than its peers, Aurora Cannabis and Canopy Growth, which are down 75% and 79%, respectively. But with high expectations pinned to its business, Tilray could have more to lose over the next few years if things don't go as glowingly as management expects them to.
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. | Cannabis producer Tilray (NASDAQ: TLRY) released its year-end numbers last month, and they confirmed one thing: The company has a lot of work to do in reaching its sky-high projections for fiscal 2024. A lack of positive cash flow means that it's inevitable that Tilray will need to raise money to not just keep its operations going, but to also pursue the acquisitions it needs to meet its aggressive sales targets. 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. | Cannabis producer Tilray (NASDAQ: TLRY) released its year-end numbers last month, and they confirmed one thing: The company has a lot of work to do in reaching its sky-high projections for fiscal 2024. If the company wants to hit its goal of $4 billion in annual sales two years from now, its top line would have to jump to more than six times what it posted this past fiscal year ($628 million). Part of Tilray's goal in reaching $4 billion involves dominating the Canadian pot market. | If the company wants to hit its goal of $4 billion in annual sales two years from now, its top line would have to jump to more than six times what it posted this past fiscal year ($628 million). On the company's most recent earnings call, however, Blair MacNeil, the president of the company's Canadian business, said that Tilray's retail market share was down to just 8.3%. TLRY Shares Outstanding data by YCharts Tilray is a risky stock that investors should avoid The closer that Tilray gets to fiscal 2024, the riskier the pot stock becomes -- especially if there isn't a huge increase in revenue. | Its goal is to hit a market share of at least 30%. On the company's most recent earnings call, however, Blair MacNeil, the president of the company's Canadian business, said that Tilray's retail market share was down to just 8.3%. As of the end of May, the company's cash and cash equivalents were just under $416 million. |
36504.0 | 2022-08-15 00:00:00 UTC | Why Tilray, Canopy Growth, and Aurora Cannabis All Spiked Today | ACB | https://www.nasdaq.com/articles/why-tilray-canopy-growth-and-aurora-cannabis-all-spiked-today | nan | nan | What happened
Canadian cannabis stocks soared Monday morning, with Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) spiking between 11% and 17% in earlier trading. As of 1:50 p.m. ET, Tilray remained up 6.3%, while Canopy Growth and Aurora were 16.5% and 7.1% higher, respectively.
So what
The jumps come as there continues to be hope for some level of marijuana legalization legislation making it through the U.S. Senate this year. But today's catalyst may have been an interview given by Tilray CEO Irwin Simon over the weekend. Simon told Yahoo! Finance that he believes legalization in the U.S. would open up a $100 billion opportunity for Canadian growers. Simon added that a legal cannabis market would have tangential products including food, beverages, and personal care products.
Now what
Democrats introduced a bill to decriminalize the drug at the federal level, and negotiations are ongoing among senators. There's no indication that an agreement is close, but Simon believes the U.S. will eventually pass some version of legalization. He pointed to the benefits realized in Canada when adult-use cannabis was legalized.
The Tilray CEO said that in less than four years since legalization in Canada, the sector has contributed about $20 billion in taxes, created over 150,000 jobs, and led to $6 billion in related infrastructure projects.
The U.S. House of Representatives passed the SAFE Banking Act last month as an amendment to the 2023 National Defense Authorization Act. But that is just the latest passage in the House with it never making progress in the Senate. Matt Darin, CEO of U.S.-based Curaleaf, echoed Simon's comments: "We're very encouraged by what's coming out of Washington, D.C. currently. There's never been more bipartisan support for sensible reforms."
Currently, 19 states and Washington, D.C., have legalized adult use. While reforms on the federal level may not come from this congressional session, the Canadian companies aren't waiting to prepare. Tilray acquired craft brewer SweetWater Brewing, Breckenridge Distillery, and hemp products company Manitoba Harvest to help establish infrastructure in the U.S., and it says those brands are profitable in their own right.
Canopy Growth has said its BioSteel health and hydration drink brand is accelerating toward profitability. BioSteel revenue surged 169% year over year in Canopy's fiscal 2023 first quarter ended June 30, 2022. It has been expanding partnerships with sports leagues and Walmart. Canopy also has a partnership with Martha Stewart for CBD wellness gummies.
Simon's optimism over the weekend was contagious in today's trading. Even shares of struggling grower Aurora Cannabis are moving higher. Aurora dropped into penny stock territory this year, but progress toward federal legalization in the U.S. could recapture investors' interest.
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 positions in and recommends Walmart 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. | What happened Canadian cannabis stocks soared Monday morning, with Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) spiking between 11% and 17% in earlier trading. Tilray acquired craft brewer SweetWater Brewing, Breckenridge Distillery, and hemp products company Manitoba Harvest to help establish infrastructure in the U.S., and it says those brands are profitable in their own right. Aurora dropped into penny stock territory this year, but progress toward federal legalization in the U.S. could recapture investors' interest. | What happened Canadian cannabis stocks soared Monday morning, with Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) spiking between 11% and 17% in earlier trading. So what The jumps come as there continues to be hope for some level of marijuana legalization legislation making it through the U.S. Senate this year. Aurora dropped into penny stock territory this year, but progress toward federal legalization in the U.S. could recapture investors' interest. | What happened Canadian cannabis stocks soared Monday morning, with Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) spiking between 11% and 17% in earlier trading. The Tilray CEO said that in less than four years since legalization in Canada, the sector has contributed about $20 billion in taxes, created over 150,000 jobs, and led to $6 billion in related infrastructure projects. 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 cannabis stocks soared Monday morning, with Tilray Brands (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) spiking between 11% and 17% in earlier trading. So what The jumps come as there continues to be hope for some level of marijuana legalization legislation making it through the U.S. Senate this year. 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. |
36505.0 | 2022-08-02 00:00:00 UTC | Why Tilray, Canopy, and Aurora Cannabis Just Popped | ACB | https://www.nasdaq.com/articles/why-tilray-canopy-and-aurora-cannabis-just-popped | nan | nan | What happened
There's a budding stock market rally among marijuana stocks Tuesday morning, with shares of Tilray (NASDAQ: TLRY) rising 8.5% in 10:40 a.m. ET trading, Aurora Cannabis (NASDAQ: ACB) up 9.1%, and Canopy Growth (NASDAQ: CGC) doing best of all -- moving 13% higher.
Marijuana investors may have Tilray to thank for all this -- Tilray, and Jefferies & Co., too.
So what
It's a slow news day in general for the marijuana industry, with little new having happened since Tilray reported its earnings last week -- or rather its losses. Tilray reported a $458 million quarterly loss despite growing its sales 8% year over year.
No matter, though. After taking a few days to digest the news, yesterday analysts at investment bank Jefferies & Co. announced they see "signs of Canadian improvement" in Tilray's results. (Thanks to our friends at TipRanks for providing a copy of the note.) The news wasn't quite good enough to net Tilray an upgrade -- indeed, Jefferies trimmed its price target by 23% and now values Tilray stock at $9.30 per share.
Still, even that lower price target implies nearly 150% upside in Tilray shares from today's prices, and Jefferies reaffirmed its buy rating on Tilray stock for this reason.
Now what
Why might investors be thinking that a buy rating for Tilray is good news for Aurora Cannabis and Canopy Growth as well? Well, in addition to saying a lot of nice things about Tilray in particular -- praising its "industry-best" international position in marijuana sales, for example, and its expansion of hemp sales in the U.S. -- Jefferies also noted that after two straight quarters of sequential declines in recreational marijuana sales in Canada, Tilray finally lit up some growth in fiscal Q4 2022.
That simple observation appears to have sparked today's market rally in marijuana stocks, but be warned: It's not as good as it sounds. Jefferies noted that Canadian cannabis sales appear to have grown 4% sequentially last quarter. However, this was after two double-digit sequential declines in Q2 and Q3, when sales fell 27% and 13%, respectively.
Simply put, marijuana sales are still in a funk in Canada, and this is a pretty deep hole that Tilray is only just beginning to climb out of. With $477 million in trailing-12-month net losses, this company remains far away from profitability. With $1.2 billion in losses, Aurora Cannabis is in even direr straits.
Meanwhile, with losses of only $302 million over the past year, Canopy Growth looks better off than its rivals -- but that's not saying much. Taken as a whole, this industry remains far from red hot, and it could still flame out in dramatic fashion.
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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 trading, Aurora Cannabis (NASDAQ: ACB) up 9.1%, and Canopy Growth (NASDAQ: CGC) doing best of all -- moving 13% higher. After taking a few days to digest the news, yesterday analysts at investment bank Jefferies & Co. announced they see "signs of Canadian improvement" in Tilray's results. That simple observation appears to have sparked today's market rally in marijuana stocks, but be warned: It's not as good as it sounds. | ET trading, Aurora Cannabis (NASDAQ: ACB) up 9.1%, and Canopy Growth (NASDAQ: CGC) doing best of all -- moving 13% higher. Tilray reported a $458 million quarterly loss despite growing its sales 8% year over year. Still, even that lower price target implies nearly 150% upside in Tilray shares from today's prices, and Jefferies reaffirmed its buy rating on Tilray stock for this reason. | ET trading, Aurora Cannabis (NASDAQ: ACB) up 9.1%, and Canopy Growth (NASDAQ: CGC) doing best of all -- moving 13% higher. The news wasn't quite good enough to net Tilray an upgrade -- indeed, Jefferies trimmed its price target by 23% and now values Tilray stock at $9.30 per share. Still, even that lower price target implies nearly 150% upside in Tilray shares from today's prices, and Jefferies reaffirmed its buy rating on Tilray stock for this reason. | ET trading, Aurora Cannabis (NASDAQ: ACB) up 9.1%, and Canopy Growth (NASDAQ: CGC) doing best of all -- moving 13% higher. Marijuana investors may have Tilray to thank for all this -- Tilray, and Jefferies & Co., too. Jefferies noted that Canadian cannabis sales appear to have grown 4% sequentially last quarter. |
36506.0 | 2022-08-02 00:00:00 UTC | 3 Early Signs This Crushed Growth Stock Might Be in a Turnaround | ACB | https://www.nasdaq.com/articles/3-early-signs-this-crushed-growth-stock-might-be-in-a-turnaround | nan | nan | Regrettably, Aurora Cannabis (NASDAQ: ACB) hasn't been a good growth stock for most of its investors. Its shares are down by just over 98% in the last three years, it's (still) nowhere near profitable despite being more than a year into a cost-cutting transformation, and its revenue has steadily declined over time.
But sometimes the best investments are the ones that nobody else can see the value of (yet). And while it's far too early to call it a comeback, there are three signs that could portend a brighter future for Aurora, so let's weigh each of them to see if they might be enough to justify a contrarian play.
1. It's paying down debt
Debt is only one component of Aurora's issues, but it's hard to argue that less is better. While the company isn't particularly indebted, with around $388.1 million Canadian dollars ($300.4 million) in debt and capital lease obligations, the cultivator is making steady progress in deleveraging, which eventually will free up more of its cash flow for reinvesting in growth.
On June 3, it repurchased $20 million of its convertible senior notes, which will lead to cash savings of around $7.5 million in interest payments annually. That's on top of the $100 million in convertible debt repurchased from earlier in the year.
If this progress continues, it'll be a positive sign for the company's long-term health, as it'll regain the ability to take out new debt at an attractive rate to finance expansion. Still, cutting production and distribution costs to approach profitability will probably need to happen first, so reducing debt load isn't a reason on its own to buy the company's shares.
2. It's accumulating some cash, and it can raise even more
Unprofitable businesses burn a lot of money, and with trailing-12-month operating expenses in excess of $182.2 million, Aurora is no exception. But thanks to a bought-deal offering that closed on June 1, it's sitting on a fresh cash infusion of $172.5 million. That leaves it with a total war chest of $354.4 million as of June 3. And it has the ability to raise an additional $186 million via its existing at-the-market facility should it need to.
In short, don't expect Aurora to go out of business anytime soon. It'll need to get its cost of goods sold a bit lower in the near term, however; its trailing-12-month cost of revenue was more than $153 million. Improvements in the efficiency of its cultivation operations could be key in paving the way, which might require it to make more cuts to its output capacity.
Investors should keep an eye on whether such cuts are expected to result in lost revenue from an inability to serve demand. Though seeing money left on the table might be painful, it would help the business to stretch the cash it has, and it could be favorable for its long-term survival.
3. Short interest is falling over time
One of the clearest indicators that the market expects a stock to drop is the amount of short interest in a company's shares. The more people who are shorting a stock, the more pessimistic the expectations are. And in Aurora's case, short interest is dropping over time, falling by more than 28% in the last 12 months. That leaves it with around 8.8% of its outstanding shares being held short, a far cry from the more than 25% toward the end of 2020.
For reference, Tilray Brands, a major competitor in the Canadian cannabis market, has nearly 13.6% of its shares held short; massive and stable companies like Apple tend to have less than 1%. So the market's pessimism about Aurora is dropping, and expectations are a bit higher than for some of its peers. But there's still a long way to go before the business is perceived as actually being solid.
In other words, don't buy the stock just because other people are less down on it, as they could easily change their minds if earnings disappoint.
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 positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. 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. | Regrettably, Aurora Cannabis (NASDAQ: ACB) hasn't been a good growth stock for most of its investors. Still, cutting production and distribution costs to approach profitability will probably need to happen first, so reducing debt load isn't a reason on its own to buy the company's shares. It's accumulating some cash, and it can raise even more Unprofitable businesses burn a lot of money, and with trailing-12-month operating expenses in excess of $182.2 million, Aurora is no exception. | Regrettably, Aurora Cannabis (NASDAQ: ACB) hasn't been a good growth stock for most of its investors. And in Aurora's case, short interest is dropping over time, falling by more than 28% in the last 12 months. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Regrettably, Aurora Cannabis (NASDAQ: ACB) hasn't been a good growth stock for most of its investors. While the company isn't particularly indebted, with around $388.1 million Canadian dollars ($300.4 million) in debt and capital lease obligations, the cultivator is making steady progress in deleveraging, which eventually will free up more of its cash flow for reinvesting in growth. Short interest is falling over time One of the clearest indicators that the market expects a stock to drop is the amount of short interest in a company's shares. | Regrettably, Aurora Cannabis (NASDAQ: ACB) hasn't been a good growth stock for most of its investors. In short, don't expect Aurora to go out of business anytime soon. Short interest is falling over time One of the clearest indicators that the market expects a stock to drop is the amount of short interest in a company's shares. |
36507.0 | 2022-07-29 00:00:00 UTC | Better Buy: Sundial Growers vs. Aurora Cannabis | ACB | https://www.nasdaq.com/articles/better-buy%3A-sundial-growers-vs.-aurora-cannabis | nan | nan | Marijuana stocks are down big this year. The Horizons Marijuana Life Sciences ETF has fallen 45%, which is deeper than the S&P 500's decline of 16%. Investing in the cannabis sector can be a risky prospect, especially in Canada, where the industry is smaller than in the U.S. and competition is fierce, with close to 900 licensed producers.
A couple of larger marijuana companies that might be worth considering are Aurora Cannabis (NASDAQ: ACB) and Sundial Growers (NASDAQ: SNDL). Today, I'll look at how they stack up and which one is the better buy.
The case for Aurora Cannabis
Aurora Cannabis isn't a risk-free investment by any means. It's still diluting shareholders and fighting its way to achieving breakeven. Unfortunately, there also isn't much in the way of sales growth, as the business has struggled with consistency, often seeing its top line decline on a year-over-year basis.
But the positive is that the company is focusing more on costs and becoming more investable. Rather than high growth numbers, Aurora's earnings releases now focus on its cost savings, and management aims to reach adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability. Aurora recently increased its cost-savings goal, now projecting that it can save up to 170 million Canadian dollars in annual costs by the first half of fiscal 2023 (its upcoming quarter will wrap up fiscal 2022). By then, it also anticipates a positive adjusted EBITDA run rate.
Aurora has also been focusing more on the medical marijuana market. In its third-quarter results (period ending March 31), it touted that its international medical marijuana business grew 55% from the prior-year period. Medical marijuana revenue of CA$39.4 million was nearly four times the CA$10.3 million Aurora reported from the consumer cannabis segment. Three years ago, half of Aurora's net cannabis revenue came from the medical market and the other half from the consumer side.
Medical marijuana products benefit from higher margins, and that's a positive sign that Aurora is on the right track toward profitability. Its adjusted EBITDA loss of CA$12.3 million this past quarter was one-third of what it was three years ago (a loss of CA$36.6 million).
Trading at 1.6 times revenue, Aurora's stock is also drastically cheaper than the premium investors have been paying for it in the past:
Data by YCharts.
The case for Sundial Growers
Sundial Growers hasn't been a whole lot better than Aurora when it comes to generating growth. Although it will likely have a record-setting performance in its current quarter, that's only due to acquisitions.
However, it's those acquisitions that could make Sundial a much better buy moving forward. As a cannabis producer, it wasn't growing. Now, with an alcohol business and owning more than 100 pot shops across Canada (thanks mainly to its acquisition of Inner Spirit last year), its operations have become more diverse. That also means there are more opportunities for the business to grow.
Alcanna, the liquor retailer Sundial acquired earlier this year, reported sales of CA$210.4 million for just the quarter ending Dec. 31, 2021. If Sundial reported that much revenue, even for a full year, that would be an impressive, record-breaking feat for the business. Moving forward, Alcanna will now be part of Sundial's operations and can transform its business and make it less reliant on the cannabis market. That alone could make it a less risky buy.
And Sundial isn't done with acquisitions by any means. The company has been looking to expand its operations further. Last month, it entered into a bid agreement to acquire the assets of cannabis producer Zenabis.
Why Aurora is a better buy than Sundial
I wouldn't buy any of these stocks today, given how challenging it is for a company to succeed in the Canadian cannabis market. However, of these two stocks, I see Aurora as having more potential in the long run. While Sundial is diversifying, that may not mean the business is in better shape; last year, Alcanna incurred a CA$28.1 million loss from its continuing operations. And there's simply too much uncertainty ahead in how Sundial's business will perform after the dust settles from all these deals.
In contrast, Aurora has a simpler, more predictable future. Although it still has to prove it can hit adjusted EBITDA profitability, it looks like it's on the right path. The company has learned from its mistakes and is finally making a serious effort to bring its expenses down.
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. | A couple of larger marijuana companies that might be worth considering are Aurora Cannabis (NASDAQ: ACB) and Sundial Growers (NASDAQ: SNDL). Investing in the cannabis sector can be a risky prospect, especially in Canada, where the industry is smaller than in the U.S. and competition is fierce, with close to 900 licensed producers. Alcanna, the liquor retailer Sundial acquired earlier this year, reported sales of CA$210.4 million for just the quarter ending Dec. 31, 2021. | A couple of larger marijuana companies that might be worth considering are Aurora Cannabis (NASDAQ: ACB) and Sundial Growers (NASDAQ: SNDL). Medical marijuana revenue of CA$39.4 million was nearly four times the CA$10.3 million Aurora reported from the consumer cannabis segment. Its adjusted EBITDA loss of CA$12.3 million this past quarter was one-third of what it was three years ago (a loss of CA$36.6 million). | A couple of larger marijuana companies that might be worth considering are Aurora Cannabis (NASDAQ: ACB) and Sundial Growers (NASDAQ: SNDL). The case for Aurora Cannabis Aurora Cannabis isn't a risk-free investment by any means. Medical marijuana revenue of CA$39.4 million was nearly four times the CA$10.3 million Aurora reported from the consumer cannabis segment. | A couple of larger marijuana companies that might be worth considering are Aurora Cannabis (NASDAQ: ACB) and Sundial Growers (NASDAQ: SNDL). Aurora has also been focusing more on the medical marijuana market. Medical marijuana revenue of CA$39.4 million was nearly four times the CA$10.3 million Aurora reported from the consumer cannabis segment. |
36508.0 | 2022-07-26 00:00:00 UTC | 22nd Century Group's Road to Cannabis May Have Some Potholes | ACB | https://www.nasdaq.com/articles/22nd-century-groups-road-to-cannabis-may-have-some-potholes | nan | nan | 22nd Century Group (NASDAQ: XXII) is a biotechnology firm making plants like tobacco and cannabis less dangerous, more potent, and more lucrative. Recognizing the enormous potential that cannabis bioscience offers, the company -- 22CG for short -- undertook several funding rounds to raise money to secure its partners and improve company infrastructure to become, in its own words, the "Monsanto of cannabis." But the company is quickly using up its cash and may need to undergo more funding rounds in the near future, watering down current investors' holdings in the process.
22CG uses advanced technology to improve popular plants
Alongside efforts to improve hops for brewers, 22CG is developing very low nicotine (VLN) tobacco and new cannabis varieties that yield more of the CBD and THC increasingly used in consumer products.
The VLN tobacco products are helping the company grow its revenue -- up 30% year over year from Q1 2021 to Q1 2022 -- and its hemp/cannabis franchise could have similar potential. To reach its goals, the company has purchased or is partnering with other cannabis companies to improve their products, rather than developing its own production lines in-house.
22CG began bringing on hemp/cannabis partners in 2019 with the acquisition of Panacea as a CBD packaged goods company -- a way to turn the cannabinoids 22CG produces into products for sale. It later bought companies like Cannametrix and Keygeene to help with testing and advanced plant breeding. It has increased its growing capacity by buying up Needle Rock Farms, which now has a USDA organic certification. And 22CG's partnership with Aurora Cannabis (NASDAQ: ACB) licensed a process that uses microorganisms to synthesize CBD and other cannabinoids to Kronos Group (NASDAQ: CRON), in an effort to help all three companies improve and refine that technology.
Raising funds -- and then quickly spending them
Two fundraising events stand out in the past five years that helped 22CG find funds for its two major cost-intensive franchises, VLN and hemp/cannabis.
On Oct. 9, 2017, with shares trading around $3, the company offered $54 million in common stock options by selling 20.57 million shares at $2.625 each, diluting its existing shareholders by roughly 20%. Four weeks later, the stock had fallen by 32% to $2.07 -- more than half again as much as the actual amount of dilution! By a year later, though, the price had climbed back up to $3.04.
In similar fashion, in early June 2021 the company put up 10 million of its common stock at $4 per share to raise $40 million, with its shares trading around $5.20 apiece at the time. The new shares it issues diluted shareholders by around 6%. Four weeks later the stock had dipped to $3.92, a 25% drop; it fell even further, to $1.09, a year later, a nearly 80% trim year over year. Shareholders don't seem to have appreciated the company's previous dilutive stock sales, which could be an issue if the company is counting on stock prices to rise again before doing additional stock sell-offs to raise money.
True to its word, the company has been spending heavily over the past year to prepare for additional VLN expansion and to create a smooth path for its cannabis endeavors, as shown in the table below.
METRIC
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Cash
$62.3 million
$55.1 million
$48.7 million
$38.6 million
Free cash flow (burn)
($8.65 million)
($6 million)
($4.9 million)
($8.1 million)
Inventory
$2.3 million
$2.7 million $2.8 million
$3.7 million
Data sources: Yahoo! Finance and 22nd Century Group.
Noting the table, you can see the bump in cash after the June 2021 fundraising event -- from $30.9 million to $62.3 million. But if cash continues to dwindle at the average rate of 14.75% sequentially, by Q1 2023 22nd Century Group's cash may fall to just a little over $20 million, potentially sparking a new round of stock fundraising.
Meanwhile, inventories have steadily risen, partly due to harvests in Q4 2021 and additional VLN stock. But inventory growth could also signal the company may be having trouble raising cash from selling its goods. 22CG does say, however, that its 2022 hemp harvest is already sold, establishing a possible ceiling for the inventory increases.
22CG says it has the pieces in place to become a global leader in cannabis technology by selling its in-house manufactured legal cannabinoid products and its plant intellectual property breakthroughs. However, unless it dampens its cash burn, it may have to sell more shares to raise money. That worked out in 2017, as stock prices returned to pre-sale prices a year later. But history did not repeat itself after the 2021 sale. This year, stock prices remain low, which may require the company to sell even more stock next time around to raise the money it needs, diluting its shareholders' value even more.
The company does have one bright spot: its 30% year-over-year revenue growth, courtesy of its VLN tobacco sales. Sales growth could continue to rise as VLN becomes more popular and 22CG sells its 2022 hemp harvests. But cannabis stock investors should still keep a close eye on its cash in the bank as the new year approaches.
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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. | And 22CG's partnership with Aurora Cannabis (NASDAQ: ACB) licensed a process that uses microorganisms to synthesize CBD and other cannabinoids to Kronos Group (NASDAQ: CRON), in an effort to help all three companies improve and refine that technology. 22CG began bringing on hemp/cannabis partners in 2019 with the acquisition of Panacea as a CBD packaged goods company -- a way to turn the cannabinoids 22CG produces into products for sale. True to its word, the company has been spending heavily over the past year to prepare for additional VLN expansion and to create a smooth path for its cannabis endeavors, as shown in the table below. | And 22CG's partnership with Aurora Cannabis (NASDAQ: ACB) licensed a process that uses microorganisms to synthesize CBD and other cannabinoids to Kronos Group (NASDAQ: CRON), in an effort to help all three companies improve and refine that technology. The VLN tobacco products are helping the company grow its revenue -- up 30% year over year from Q1 2021 to Q1 2022 -- and its hemp/cannabis franchise could have similar potential. On Oct. 9, 2017, with shares trading around $3, the company offered $54 million in common stock options by selling 20.57 million shares at $2.625 each, diluting its existing shareholders by roughly 20%. | And 22CG's partnership with Aurora Cannabis (NASDAQ: ACB) licensed a process that uses microorganisms to synthesize CBD and other cannabinoids to Kronos Group (NASDAQ: CRON), in an effort to help all three companies improve and refine that technology. Shareholders don't seem to have appreciated the company's previous dilutive stock sales, which could be an issue if the company is counting on stock prices to rise again before doing additional stock sell-offs to raise money. Cash $62.3 million $55.1 million $48.7 million $38.6 million Free cash flow (burn) ($8.65 million) ($6 million) ($4.9 million) ($8.1 million) Inventory $2.3 million $2.7 million $2.8 million $3.7 million Data sources: Yahoo! | And 22CG's partnership with Aurora Cannabis (NASDAQ: ACB) licensed a process that uses microorganisms to synthesize CBD and other cannabinoids to Kronos Group (NASDAQ: CRON), in an effort to help all three companies improve and refine that technology. This year, stock prices remain low, which may require the company to sell even more stock next time around to raise the money it needs, diluting its shareholders' value even more. Sales growth could continue to rise as VLN becomes more popular and 22CG sells its 2022 hemp harvests. |
36509.0 | 2022-07-26 00:00:00 UTC | 2 Marijuana Stocks to Buy Hand Over Fist and 1 to Avoid Like the Plague | ACB | https://www.nasdaq.com/articles/2-marijuana-stocks-to-buy-hand-over-fist-and-1-to-avoid-like-the-plague-0 | nan | nan | You might not realize it, considering how poorly the stocks in the cannabis industry have performed over the past 18 months, but legal marijuana remains one of the world's fastest growing trends.
In March, cannabis-focused research firm BDSA released a report ("Essential Cannabis Insights") that projected global sales would grow from an estimated $35 billion in 2022 to $61 billion by 2026. For those of you keeping score at home, that's a compound annual growth rate of more than 16%; and it comes on the heels of 22% annual sales growth over 2021.
Image source: Getty Images.
Although federal legalization efforts have been stymied in the highly lucrative U.S. market, ample opportunity exists for multi-state operators (MSOs) to thrive. At the moment, there are two marijuana stocks that patient investors can confidently buy hand over fist, as well as one superficially inexpensive pot stock that should be avoided at all cost.
Marijuana stock No. 1 to buy hand over fist: Cresco Labs
The first pot stock that can help long-term investors see the green is none other than U.S. MSO Cresco Labs (OTC: CRLBF).
To address the elephant in the room, Congress has failed on multiple occasions to pass cannabis banking reform and/or legalization reform. While this does lead to ongoing operating redundancies for cannabis stocks -- e.g., setting up cultivation and processing facilities in multiple states since the interstate transport of weed is illegal -- the legalization of pot at the state level in roughly three-quarters of all states is providing abundant growth opportunities for MSOs like Cresco.
As of the end of March, Cresco was a modestly sized MSO, with 50 operating retail locations and a presence in 10 states. Although Cresco has a footprint in a number of high-dollar markets, it's really focused its attention on limited-license markets, such as Illinois and Pennsylvania. States where retail license issuance is being purposely limited ensures that smaller players like Cresco have a fair shot to build up their brands and gain a loyal following.
But Cresco Labs is unlikely to be a modestly sized player for much longer. In late March, Cresco announced its intent to buy MSO Columbia Care (OTC: CCHWF) in an all-share deal. All signs point to this deal closing sometime in the fourth quarter. Should this deal close, Cresco's operating retail locations would swell to north of 130, with its footprint growing to 18 states. Columbia Care has primarily grown by acquisition, and the Cresco acquisition of Columbia Care would be a quick way to more than double its reach in the world's most-lucrative weed market.
In addition to growing its retail presence by leaps and bounds, Cresco Labs has the industry's leading wholesale cannabis segment. Though Wall Street largely downplays wholesale marijuana due to its lower margins, relative to the retail side of the equation, Cresco has the volume to more than offset weaker margins. That's because it holds a highly coveted cannabis distribution license in California, the nation's top weed market by annual sales. This license allows Cresco to place its proprietary pot products into more than 575 stores throughout the Golden State.
Cresco is about to get a lot larger and should have no trouble pushing into recurring profitability by 2023. That makes it one of the most-intriguing pot stocks in North America.
Marijuana stock No. 2 to buy hand over fist: Planet 13 Holdings
The second marijuana stock to buy hand over fist with annual weed growth in the double digits is U.S. small-cap MSO Planet 13 Holdings (OTC: PLNH.F).
Without a doubt, you could say Planet 13 has taken the road less traveled. Whereas most MSOs have opted to establish a retail, cultivation, and/or processing presence in as many high-dollar, legalized pot markets as possible, Planet 13 has a presence in just four states, with a mere three operating dispensaries. But it's this unique operating approach that gives Planet 13 a sustainable edge.
To date, the company has opened two SuperStores. The Las Vegas SuperStore, just west of the Strip in Nevada, spans 112,000 square feet and features an events center, consumer-facing processing center, and café. Meanwhile, the Orange County SuperStore in Santa Ana, Calif., sits about 15 minutes from Disneyland and covers 55,000 square feet. Approximately 30% of this space is devoted to selling.
Planet 13's SuperStores are enormous and feature unrivaled selection for both dried cannabis flower and higher-margin derivative products. These stores have also incorporated the ideal combination of technology and personalization. Consumers can use self-pay kiosks to speed up the purchasing process, and also have access to personalized budtenders who can show them around.
Despite only having a handful of operating retail stores, Planet 13's reach is rapidly growing. Its proprietary brands can be found in more than 100 retail locations. What's more, the company plans to bring its SuperStore concept to Chicago, Ill., while opening its neighborhood retail concept in Florida. These neighborhood stores will offer a boutique-styled setup and span roughly 4,750 square feet. Medical marijuana-legal Florida has only assigned 22 retail operator licenses, but license-holders like Planet 13 can open as many stores as they'd like. That's great news for one of the top-dollar cannabis markets in the United States.
Similar to Cresco Labs, Planet 13 is likely on the cusp of recurring profitability and should be there by no later than 2023. With an operating model that simply hasn't been duplicated, Planet 13 looks like a no-brainer buy for long-term investors.
Image source: Getty Images.
The cannabis stock to avoid like the plague: Aurora Cannabis
But there's another side to this story. If there's one consistency about next-big-thing growth trends, it's that not every company is going to be a winner. Although the global cannabis industry offers blazing growth through 2026, Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB) is a pot stock investors should avoid like the plague.
Three years ago, there may not have been a more widely held or popular marijuana stock on the planet than Aurora Cannabis. This acquisition-happy company had amassed a portfolio of 15 production sites and could have, in theory, produced north of 600,000 kilos a year of cannabis if its cultivation sites were fully operational. The expectation had been that Aurora would control a significant chunk of the legalized Canadian market, as well as become an exporting powerhouse.
Unfortunately, none of this came to fruition for Aurora, and the company has been trying to dig its way out of a very deep hole for years. Even after shuttering some of its smaller production facilities, halting construction on a number of major projects, and reducing expenses (including stock-based compensation), it hasn't come close to profitability and has continued to burn cash.
To be fair, some of this blame lies with Canadian regulators, which set pot stocks up to fail. The Canadian federal government was slow to approve cultivation licenses, while Ontario, the nation's largest province, failed to approve retail licenses in a timely manner.
But most of the blame lies with Aurora. The company vastly overestimated production demand and grossly overpaid for around a dozen acquisitions. Aurora Cannabis ultimately wrote down billions of dollars in goodwill tied to these buyouts.
The company's persistent share-based dilution is equally damaging to its shareholders. Because no amount of cost-cutting has been able to move Aurora into the black, the company has had to issue stock on more occasions than I count to raise capital. Since the midpoint of 2014, Aurora's split-adjusted share count has ballooned from a little over 1.3 million shares to more than 224 million shares, as of March 31, 2022. Its share count will likely continue growing with net losses expected for the foreseeable future.
Aurora Cannabis might look like a superficial bargain at just $1.41 a share, as of last weekend, but it continues to be one of the worst possible investments in the cannabis space.
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 Planet 13 Holdings. The Motley Fool has positions in and recommends Cresco Labs and Planet 13 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. | Although the global cannabis industry offers blazing growth through 2026, Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB) is a pot stock investors should avoid like the plague. You might not realize it, considering how poorly the stocks in the cannabis industry have performed over the past 18 months, but legal marijuana remains one of the world's fastest growing trends. States where retail license issuance is being purposely limited ensures that smaller players like Cresco have a fair shot to build up their brands and gain a loyal following. | Although the global cannabis industry offers blazing growth through 2026, Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB) is a pot stock investors should avoid like the plague. 2 to buy hand over fist: Planet 13 Holdings The second marijuana stock to buy hand over fist with annual weed growth in the double digits is U.S. small-cap MSO Planet 13 Holdings (OTC: PLNH.F). The Canadian federal government was slow to approve cultivation licenses, while Ontario, the nation's largest province, failed to approve retail licenses in a timely manner. | Although the global cannabis industry offers blazing growth through 2026, Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB) is a pot stock investors should avoid like the plague. While this does lead to ongoing operating redundancies for cannabis stocks -- e.g., setting up cultivation and processing facilities in multiple states since the interstate transport of weed is illegal -- the legalization of pot at the state level in roughly three-quarters of all states is providing abundant growth opportunities for MSOs like Cresco. 2 to buy hand over fist: Planet 13 Holdings The second marijuana stock to buy hand over fist with annual weed growth in the double digits is U.S. small-cap MSO Planet 13 Holdings (OTC: PLNH.F). | Although the global cannabis industry offers blazing growth through 2026, Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB) is a pot stock investors should avoid like the plague. Should this deal close, Cresco's operating retail locations would swell to north of 130, with its footprint growing to 18 states. The cannabis stock to avoid like the plague: Aurora Cannabis But there's another side to this story. |
36510.0 | 2022-07-22 00:00:00 UTC | CANADA STOCKS - TSX falls 0.56% to 18,955.85 | ACB | https://www.nasdaq.com/articles/canada-stocks-tsx-falls-0.56-to-18955.85 | nan | nan | * The Toronto Stock Exchange's TSX falls 0.56 percent to 18,955.85
* Leading the index were Mullen Group Ltd , up 6.0%, Boardwalk Real Estate Investment Trust BEI_u.TO, up 4.3%, and Canadian Apartment Properties Real Estate Investment Trust CAR_u.TO, higher by 3.4%.
* Lagging shares were Aurora Cannabis Inc ACB.TO, down 8.1%, Canopy Growth Corp WEED.TO, down 7.3%, and Shopify Inc SHOP.TO, lower by 7.2%.
* On the TSX 82 issues rose and 150 fell as a 0.5-to-1 ratio favored decliners. There were 3 new highs and 3 new lows, with total volume of 123.1 million shares.
* The most heavily traded shares by volume were Suncor Energy Inc SU.TO, Crescent Point Energy Corp CPG.TO and Athabasca Oil Corp ATH.TO.
* The TSX's energy group .SPTTEN fell 3.16 points, or 1.5%, while the financials sector .SPTTFS slipped 1.36 points, or 0.4%.
* West Texas Intermediate crude futures CLc1 fell 1.77%, or $1.71, to $94.64 a barrel. Brent crude LCOc1 fell 0.64%, or $0.66, to $103.2 O/R
* The TSX is off 10.7% for the year.
This summary was machine generated July 22 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. | * Lagging shares were Aurora Cannabis Inc ACB.TO, down 8.1%, Canopy Growth Corp WEED.TO, down 7.3%, and Shopify Inc SHOP.TO, lower by 7.2%. * The Toronto Stock Exchange's TSX falls 0.56 percent to 18,955.85 * Leading the index were Mullen Group Ltd , up 6.0%, Boardwalk Real Estate Investment Trust BEI_u.TO, up 4.3%, and Canadian Apartment Properties Real Estate Investment Trust CAR_u.TO, higher by 3.4%. * On the TSX 82 issues rose and 150 fell as a 0.5-to-1 ratio favored decliners. | * Lagging shares were Aurora Cannabis Inc ACB.TO, down 8.1%, Canopy Growth Corp WEED.TO, down 7.3%, and Shopify Inc SHOP.TO, lower by 7.2%. * The Toronto Stock Exchange's TSX falls 0.56 percent to 18,955.85 * Leading the index were Mullen Group Ltd , up 6.0%, Boardwalk Real Estate Investment Trust BEI_u.TO, up 4.3%, and Canadian Apartment Properties Real Estate Investment Trust CAR_u.TO, higher by 3.4%. * The most heavily traded shares by volume were Suncor Energy Inc SU.TO, Crescent Point Energy Corp CPG.TO and Athabasca Oil Corp ATH.TO. | * Lagging shares were Aurora Cannabis Inc ACB.TO, down 8.1%, Canopy Growth Corp WEED.TO, down 7.3%, and Shopify Inc SHOP.TO, lower by 7.2%. * The Toronto Stock Exchange's TSX falls 0.56 percent to 18,955.85 * Leading the index were Mullen Group Ltd , up 6.0%, Boardwalk Real Estate Investment Trust BEI_u.TO, up 4.3%, and Canadian Apartment Properties Real Estate Investment Trust CAR_u.TO, higher by 3.4%. * The most heavily traded shares by volume were Suncor Energy Inc SU.TO, Crescent Point Energy Corp CPG.TO and Athabasca Oil Corp ATH.TO. | * Lagging shares were Aurora Cannabis Inc ACB.TO, down 8.1%, Canopy Growth Corp WEED.TO, down 7.3%, and Shopify Inc SHOP.TO, lower by 7.2%. * The Toronto Stock Exchange's TSX falls 0.56 percent to 18,955.85 * Leading the index were Mullen Group Ltd , up 6.0%, Boardwalk Real Estate Investment Trust BEI_u.TO, up 4.3%, and Canadian Apartment Properties Real Estate Investment Trust CAR_u.TO, higher by 3.4%. * On the TSX 82 issues rose and 150 fell as a 0.5-to-1 ratio favored decliners. |
36511.0 | 2022-07-22 00:00:00 UTC | CANADA STOCKS-TSX rises, set for best weekly performance since Feb 2021 | ACB | https://www.nasdaq.com/articles/canada-stocks-tsx-rises-set-for-best-weekly-performance-since-feb-2021 | nan | nan | Updates to open
July 22 (Reuters) - Canada's main stock index edged higher on Friday and was on pace for its best weekly performance since early February 2021, lifted by gains in miners and upbeat retail sales data for May.
At 10:22 a.m. ET (14:22 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 41.07 points, or 0.22%, at 19,103.92.
Data showed Canadian retail sales rose 2.2% in May from April to C$62.25 billion ($48.26 billion), on higher sales at gasoline stations, as well as motor vehicle and parts dealers.
Equities have made a comeback this week as traders pare bets of a 100-basis-point interest rate hike by the U.S. Federal Reserve next week, easing fears around aggressive monetary policy tightening.
The TSX was set to end the week with a rise of 3.8%, which would be its biggest in more than a year.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.3% as gold futures GCc1 rose 1.3% to $1,735 an ounce, while copper prices CMCU3 tracked their first weekly rise in seven weeks. GOL/MET/L
The energy sector .SPTTEN climbed 0.4% and the financials sector .SPTTFS gained 0.1%, while the industrials sector .GSPTTIN rose 0.3%. O/R
HIGHLIGHTS
On the TSX, 161 issues were higher, while 73 issues declined for a 2.21-to-1 ratio favoring gainers, with 34.76 million shares traded.
The top percentage gainers on the TSX were First Majestic Silver FR.TO, and Wesdome Gold Mines WDO.TO, which rose 4.6% each.
Shopify Inc SHOP.TO fell 4.6%, the most on the TSX, followed by pot producer Aurora Cannabis ACB.TO, down 4.1%.
The TSX posted 3 new 52-week highs and no new lows.
Across all Canadian issues there were 4 new 52-week highs and 7 new lows, with total volume of 63.63 million shares.
(Reporting by Anisha Sircar and Devik Jain in Bengaluru; Editing by Aditya Soni)
((Anisha.Sircar@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. | Shopify Inc SHOP.TO fell 4.6%, the most on the TSX, followed by pot producer Aurora Cannabis ACB.TO, down 4.1%. Updates to open July 22 (Reuters) - Canada's main stock index edged higher on Friday and was on pace for its best weekly performance since early February 2021, lifted by gains in miners and upbeat retail sales data for May. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.3% as gold futures GCc1 rose 1.3% to $1,735 an ounce, while copper prices CMCU3 tracked their first weekly rise in seven weeks. | Shopify Inc SHOP.TO fell 4.6%, the most on the TSX, followed by pot producer Aurora Cannabis ACB.TO, down 4.1%. Updates to open July 22 (Reuters) - Canada's main stock index edged higher on Friday and was on pace for its best weekly performance since early February 2021, lifted by gains in miners and upbeat retail sales data for May. Data showed Canadian retail sales rose 2.2% in May from April to C$62.25 billion ($48.26 billion), on higher sales at gasoline stations, as well as motor vehicle and parts dealers. | Shopify Inc SHOP.TO fell 4.6%, the most on the TSX, followed by pot producer Aurora Cannabis ACB.TO, down 4.1%. Updates to open July 22 (Reuters) - Canada's main stock index edged higher on Friday and was on pace for its best weekly performance since early February 2021, lifted by gains in miners and upbeat retail sales data for May. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.3% as gold futures GCc1 rose 1.3% to $1,735 an ounce, while copper prices CMCU3 tracked their first weekly rise in seven weeks. | Shopify Inc SHOP.TO fell 4.6%, the most on the TSX, followed by pot producer Aurora Cannabis ACB.TO, down 4.1%. Updates to open July 22 (Reuters) - Canada's main stock index edged higher on Friday and was on pace for its best weekly performance since early February 2021, lifted by gains in miners and upbeat retail sales data for May. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.3% as gold futures GCc1 rose 1.3% to $1,735 an ounce, while copper prices CMCU3 tracked their first weekly rise in seven weeks. |
36512.0 | 2022-07-21 00:00:00 UTC | Why Shares of Aurora Cannabis, Canopy Growth, and Sundial Growers Are Sinking Today | ACB | https://www.nasdaq.com/articles/why-shares-of-aurora-cannabis-canopy-growth-and-sundial-growers-are-sinking-today | nan | nan | What happened
Cannabis stocks are reversing course this morning after a multiday rally. As of 10:32 a.m. ET, shares of Canada's Aurora Cannabis (NASDAQ: ACB) were lower by 6%, Canopy Growth (NASDAQ: CGC) was down 8.32%, and Sundial Growers' (NASDAQ: SNDL) stock was in the red by 2.89%.
What's rocking the boat this morning? Canada's top cannabis stocks were rallying over the past few days ahead of the rumored introduction of the long-awaited Cannabis Administration and Opportunity Act (CAOA) in the Senate. According to an article by Marijuana Moment, Democratic Sens. Chuck Schumer, Ron Wyden, and Cory Booker officially filed the bill earlier today.
Image source: Getty Images.
So what
Why are investors selling on this potentially game-changing news? The long and short of it is that CAOA doesn't have much of a chance at actually passing in the Senate during the current session. Republicans haven't voiced much support for the bill, and even some key Democratic senators have openly expressed their opposition toward legalizing weed at the federal level.
What's important to understand is that CAOA essentially requires 60 votes to pass in the Senate. That's a steep political hurdle that seems far too high to climb right now.
Moreover, leading up to the bill's formal introduction today, it's highly likely that short-sellers were backing off from their rather large positions in Aurora, Canopy Growth, and Sundial Growers. After all, these names were undoubtedly prime targets for speculators and day traders looking for a quick momentum play.
Now that the news has officially dropped, however, the momentum crowd appears to be moving on, while short-sellers are probably moving back into these cannabis stocks. Aurora, Canopy Growth, and Sundial Growers, after all, have all been suffering from a domestic market saturated with well over 800 licensed cannabis producers, sellers, and processors.
Now what
On the bright side, it is undoubtedly a positive development that the Senate has officially taken up this landmark piece of cannabis legislation. The U.S. marijuana market is expected to grow into a $100 billion space one day, which would be a boon for struggling cultivators like Aurora, Canopy Growth, and Sundial Growers.
Unfortunately, cannabis investors are probably going to have to wait a while longer before prohibition officially ends in the United States. In other words, you may not want to buy shares of these Canadian pot stocks unless you are willing to hold for the long term.
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. | ET, shares of Canada's Aurora Cannabis (NASDAQ: ACB) were lower by 6%, Canopy Growth (NASDAQ: CGC) was down 8.32%, and Sundial Growers' (NASDAQ: SNDL) stock was in the red by 2.89%. Republicans haven't voiced much support for the bill, and even some key Democratic senators have openly expressed their opposition toward legalizing weed at the federal level. Moreover, leading up to the bill's formal introduction today, it's highly likely that short-sellers were backing off from their rather large positions in Aurora, Canopy Growth, and Sundial Growers. | ET, shares of Canada's Aurora Cannabis (NASDAQ: ACB) were lower by 6%, Canopy Growth (NASDAQ: CGC) was down 8.32%, and Sundial Growers' (NASDAQ: SNDL) stock was in the red by 2.89%. Moreover, leading up to the bill's formal introduction today, it's highly likely that short-sellers were backing off from their rather large positions in Aurora, Canopy Growth, and Sundial Growers. Aurora, Canopy Growth, and Sundial Growers, after all, have all been suffering from a domestic market saturated with well over 800 licensed cannabis producers, sellers, and processors. | ET, shares of Canada's Aurora Cannabis (NASDAQ: ACB) were lower by 6%, Canopy Growth (NASDAQ: CGC) was down 8.32%, and Sundial Growers' (NASDAQ: SNDL) stock was in the red by 2.89%. Canada's top cannabis stocks were rallying over the past few days ahead of the rumored introduction of the long-awaited Cannabis Administration and Opportunity Act (CAOA) in the Senate. 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 Canada's Aurora Cannabis (NASDAQ: ACB) were lower by 6%, Canopy Growth (NASDAQ: CGC) was down 8.32%, and Sundial Growers' (NASDAQ: SNDL) stock was in the red by 2.89%. So what Why are investors selling on this potentially game-changing news? Moreover, leading up to the bill's formal introduction today, it's highly likely that short-sellers were backing off from their rather large positions in Aurora, Canopy Growth, and Sundial Growers. |
36513.0 | 2022-07-21 00:00:00 UTC | This Cannabis Company Just Reported 90% Revenue Growth: Is It a Buy? | ACB | https://www.nasdaq.com/articles/this-cannabis-company-just-reported-90-revenue-growth%3A-is-it-a-buy | nan | nan | Cannabis stocks have been falling heavily over the past year. The Horizons Marijuana Life Sciences ETF is down more than 62% as it's clear that the hype and excitement that once propped up the sector has since faded. Investors are no longer impressed with stories of potential and empty promises. They want results -- and many cannabis companies simply haven't delivered.
One exception to that may be OrganiGram (NASDAQ: OGI). The Canadian cannabis producer recently reported its latest earnings numbers, and they were impressive -- sales grew at a rate of 90% year over year. Has this banged-up pot stock, which is also down around 60%, a buy on this news?
OrganiGram reports record sales
For the third quarter ended May 31, OrganiGram's gross sales topped 55.2 million Canadian dollars versus the CA$29.1 million it posted in the prior-year period. Even compared to the previous quarter, this was a significant improvement as the top line was 26% better than the CA$43.9 million it reported in the second quarter.
The company has added new SKUs that have helped give consumers a greater variety of products to choose from, which, in turn, has helped bolster its revenue. OrganiGram's results are impressive, especially when you look at how other marijuana producers have been performing over the past year, struggling to generate much positive sales growth:
CGC Revenue (Quarterly YOY Growth) data by YCharts.
Why sales growth may not be enough to attract investors
A big reason I'm not overly bullish on OrganiGram is that I'm not a fan of simply adding SKUs and products -- that can lead to inefficiencies and increased costs elsewhere on the income statement. During the period, OrganiGram said it introduced 16 new SKUs. And while the company did post impressive sales numbers, it still has a long way to go in being profitable.
In Q3, the company's gross margin was just CA$8.7 million (before adjustments to fair value), which is 16% of gross sales and 23% of net revenue after excise taxes. That's simply not enough to cover its operating expenses; general and administrative expenses of CA$12.8 million alone easily wiped out the gross profit. OrganiGram's operating loss during the period was CA$11.9 million. The positive is that's an improvement from the CA$9 million operating loss OrganiGram reported in Q2.
But until the company can demonstrate to investors that its business is profitable, attracting investors could be a tough task. That's evident in the little bullishness that followed the stock following the release of its results, as its share price today is about where it was before OrganiGram posted its latest numbers.
Should you invest in OrganiGram?
Despite the strong sales growth, there isn't an overwhelming reason to invest in OrganiGram today. Adding more products can be a way to improve sales numbers, but it may not necessarily translate into profitability. And until it does that, it will be difficult to suggest that OrganiGram is better than other cannabis stocks in the market. Its sales are still a fraction of some of the larger players in the industry (Tilray Brands and Canopy Growth generate more than CA$100 million every quarter). While 90% growth sounds impressive, it's effectively a CA$6.3-million improvement in net revenue from the previous period -- hardly anything to get excited about.
OrganiGram is a stock worth watching to see if it can continue building on these results and inch closer to profitability. But until it can post an operating profit, it's not an investment I'd 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. | Why sales growth may not be enough to attract investors A big reason I'm not overly bullish on OrganiGram is that I'm not a fan of simply adding SKUs and products -- that can lead to inefficiencies and increased costs elsewhere on the income statement. Its sales are still a fraction of some of the larger players in the industry (Tilray Brands and Canopy Growth generate more than CA$100 million every quarter). 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. | OrganiGram reports record sales For the third quarter ended May 31, OrganiGram's gross sales topped 55.2 million Canadian dollars versus the CA$29.1 million it posted in the prior-year period. OrganiGram's results are impressive, especially when you look at how other marijuana producers have been performing over the past year, struggling to generate much positive sales growth: CGC Revenue (Quarterly YOY Growth) data by YCharts. The positive is that's an improvement from the CA$9 million operating loss OrganiGram reported in Q2. | OrganiGram reports record sales For the third quarter ended May 31, OrganiGram's gross sales topped 55.2 million Canadian dollars versus the CA$29.1 million it posted in the prior-year period. OrganiGram's results are impressive, especially when you look at how other marijuana producers have been performing over the past year, struggling to generate much positive sales growth: CGC Revenue (Quarterly YOY Growth) data by YCharts. Why sales growth may not be enough to attract investors A big reason I'm not overly bullish on OrganiGram is that I'm not a fan of simply adding SKUs and products -- that can lead to inefficiencies and increased costs elsewhere on the income statement. | OrganiGram reports record sales For the third quarter ended May 31, OrganiGram's gross sales topped 55.2 million Canadian dollars versus the CA$29.1 million it posted in the prior-year period. The positive is that's an improvement from the CA$9 million operating loss OrganiGram reported in Q2. But until it can post an operating profit, it's not an investment I'd consider. |
36514.0 | 2022-07-18 00:00:00 UTC | Why Aurora Cannabis, Canopy Growth, and Sundial Growers Are Rolling Higher Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-growth-and-sundial-growers-are-rolling-higher-today | nan | nan | What happened
Most of Canada's top cannabis stocks are off to a strong start this week. For example, as of 11:29 a.m. ET Monday morning, Aurora Cannabis (NASDAQ: ACB) shares were up by a heady 8%; Canopy Growth's (NASDAQ: CGC) stock price was higher by 10.9%; and Sundial Growers' (NASDAQ: SNDL) equity was popping by a respectable 3%.
What's lighting a fire underneath these beaten-down cannabis equities today? Investors appear to be bidding up Aurora, Canopy, and Sundial Growers' stock prices this morning on a possible Senate vote on the Cannabis Administration and Opportunity Act (CAOA) that would essentially legalize marijuana at the federal level inside the United States.
Image source: Getty Images.
So what
As reported by Bloomberg mews last week, Senate Democrats are considering introducing this bill aimed at decriminalizing marijuana on the federal level sometime this week. As the U.S. cannabis market is thought to be worth more than $100 billion in annual sales, it's no surprise to see Aurora, Canopy, and Sundial Growers reacting positively to this remote possibility. Each of these companies, after all, has placed a heavy emphasis on entering the U.S. market once federal prohibition on cannabis comes to an end.
The bad news is that there has already been some pushback on Capitol Hill regarding the exact timing of the bill's introduction. In fact, Democrats have only promised to get CAOA in front of the Senate for a formal vote before the body's next recess in August.What's important to understand is that lawmakers have made similar promises regarding a possible CAOA vote in the past. So far, though, this landmark piece of marijuana legislation has never seen the light of day.
Now what
On the bright side for marijuana investors, Senate Democrats may have no choice other than to sally forth with this imperfect bill's introduction sometime soon. Pro-marijuana Democrats, after all, are deeply concerned that the rapidly approaching midterm elections will ultimately result in a Republican-controlled congress. A sea change in the political landscape would likely be bad news for marijuana reform. Speaking to this point, the majority of Republicans have shown little interest in even discussing cannabis-related legislation.
All that being said, the odds of CAOA actually passing during the current session are slim to none, according to various political pundits. Cannabis investors, in turn, may want to be careful about buying these high-flying names on this political speculation.
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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 Monday morning, Aurora Cannabis (NASDAQ: ACB) shares were up by a heady 8%; Canopy Growth's (NASDAQ: CGC) stock price was higher by 10.9%; and Sundial Growers' (NASDAQ: SNDL) equity was popping by a respectable 3%. Investors appear to be bidding up Aurora, Canopy, and Sundial Growers' stock prices this morning on a possible Senate vote on the Cannabis Administration and Opportunity Act (CAOA) that would essentially legalize marijuana at the federal level inside the United States. As the U.S. cannabis market is thought to be worth more than $100 billion in annual sales, it's no surprise to see Aurora, Canopy, and Sundial Growers reacting positively to this remote possibility. | ET Monday morning, Aurora Cannabis (NASDAQ: ACB) shares were up by a heady 8%; Canopy Growth's (NASDAQ: CGC) stock price was higher by 10.9%; and Sundial Growers' (NASDAQ: SNDL) equity was popping by a respectable 3%. Investors appear to be bidding up Aurora, Canopy, and Sundial Growers' stock prices this morning on a possible Senate vote on the Cannabis Administration and Opportunity Act (CAOA) that would essentially legalize marijuana at the federal level inside the United States. Now what On the bright side for marijuana investors, Senate Democrats may have no choice other than to sally forth with this imperfect bill's introduction sometime soon. | ET Monday morning, Aurora Cannabis (NASDAQ: ACB) shares were up by a heady 8%; Canopy Growth's (NASDAQ: CGC) stock price was higher by 10.9%; and Sundial Growers' (NASDAQ: SNDL) equity was popping by a respectable 3%. Investors appear to be bidding up Aurora, Canopy, and Sundial Growers' stock prices this morning on a possible Senate vote on the Cannabis Administration and Opportunity Act (CAOA) that would essentially legalize marijuana at the federal level inside the United States. See the 10 stocks *Stock Advisor returns as of June 2, 2022 George Budwell has no position in any of the stocks mentioned. | ET Monday morning, Aurora Cannabis (NASDAQ: ACB) shares were up by a heady 8%; Canopy Growth's (NASDAQ: CGC) stock price was higher by 10.9%; and Sundial Growers' (NASDAQ: SNDL) equity was popping by a respectable 3%. Investors appear to be bidding up Aurora, Canopy, and Sundial Growers' stock prices this morning on a possible Senate vote on the Cannabis Administration and Opportunity Act (CAOA) that would essentially legalize marijuana at the federal level inside the United States. So far, though, this landmark piece of marijuana legislation has never seen the light of day. |
36515.0 | 2022-07-18 00:00:00 UTC | Is Now the Right Time to Dump Your Cannabis Stocks? | ACB | https://www.nasdaq.com/articles/is-now-the-right-time-to-dump-your-cannabis-stocks | nan | nan | If you're looking at a wall of red in the investing account where you hold your cannabis stocks and wondering whether you've made a series of terrible mistakes, you aren't alone. As a group, marijuana stocks have eaten dirt this year, with the return of the AdvisorShares Pure US Cannabis ETF (NYSEMKT: MSOS) collapsing by more than 50%. Worse yet, with inflation rising and consumers' wallets looking a bit too thin to justify spending money on cannabis, there isn't necessarily any great recovery to look forward to in the near term.
Does that mean it's time to cut your losses and sell your shares? In large part, it depends on how long you're willing to wait.
There's not much relief in sight
At the moment, there are a couple of problems for cannabis companies that make the prospect of selling especially appealing. First, as mentioned before, is inflation leading to crimped demand. Take a look at this chart showing the growth of quarterly revenue for a handful of the industry's leaders:
TCNNF Revenue (Quarterly) data by YCharts.
Only Trulieve Cannabis (OTC: TCNNF) is continuing to post significantly more sales than it did a year ago. Other major players like Canopy Growth and Aurora Cannabis are actually facing falling revenue. There's no guarantee that this issue is being caused by inflation in isolation, but it's hard to argue that marijuana products are essential goods that people are going to keep buying even when times are getting harder. So, there's likely to be continued top-line pressure for as long as it takes to get inflation under control from its present level.
At the same time, the Federal Reserve is likely to continue raising interest rates to control inflation. For fledgling industries like cannabis, that's bad news, as it means businesses will need to be taking on larger future interest expenses if they want to borrow cash for expansion. And that's not even getting into the adjacent problem of traditional financial institutions in the U.S. being loath to lend to them due to concerns about legal liability. The other fly in the ointment is that it's not exactly a favorable market environment for cannabis cultivators seeking funding to issue new shares, as their stock prices are considerably lower than before.
Finally, the industry's progress toward higher profitability remains quite fragile, and many businesses are actually experiencing falling margins when looking back at the medium term -- which is to say, starting from well before the bear market and the attendant economic issues.
Here's what I mean:
TCNNF Gross Profit Margin data by YCharts.
Once again, while the individual businesses might have plans for how to mitigate their struggles with profitability, they'll be facing some strong headwinds while they implement those plans, and it's hard to imagine stocks rallying significantly until those headwinds abate.
The long-term picture is still rosy
In sum, if you're looking for arguments in favor of selling marijuana stocks, there are a plethora. But, by selling, you'll 100% miss out on your chance to keep building on your positions in the companies you believe can eventually succeed. And right now, marijuana stock valuations are at rock bottom, which means that selling will preclude you from loading up on a bunch of good deals.
Take Trulieve, for example. Despite being the fastest-growing company discussed today, its price to sales (P/S) multiple is near a scant 1.8. That's significantly lower than the P/S ratio of the growth-stock-packed Nasdaq, which is around 4.5. And in the first quarter of 2021, Trulieve's multiple was well above 10. Nothing has fundamentally changed about its core strategy in that time, nor has its business model become significantly less lucrative in the long term.
Even if you're sitting on some gnarly losses, buying shares when valuations are so low will help to dilute the red numbers in your brokerage account, and it's a good decision if you're a believer in the industry as a whole -- and you probably should be. Per a research report by Fortune Business Insights, the market for cannabis will grow with a compound annual growth rate of around 32% between 2021 and 2028, eventually reaching a size of around $197.7 billion annually. With that much growth projected, the troubles of the last couple of years will look like a bump in the road if you're willing to hold your shares for just a few more years. And that's by far the strongest argument in favor of not selling.
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 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. | Worse yet, with inflation rising and consumers' wallets looking a bit too thin to justify spending money on cannabis, there isn't necessarily any great recovery to look forward to in the near term. Finally, the industry's progress toward higher profitability remains quite fragile, and many businesses are actually experiencing falling margins when looking back at the medium term -- which is to say, starting from well before the bear market and the attendant economic issues. Even if you're sitting on some gnarly losses, buying shares when valuations are so low will help to dilute the red numbers in your brokerage account, and it's a good decision if you're a believer in the industry as a whole -- and you probably should be. | Take a look at this chart showing the growth of quarterly revenue for a handful of the industry's leaders: TCNNF Revenue (Quarterly) data by YCharts. At the same time, the Federal Reserve is likely to continue raising interest rates to control inflation. Here's what I mean: TCNNF Gross Profit Margin data by YCharts. | The other fly in the ointment is that it's not exactly a favorable market environment for cannabis cultivators seeking funding to issue new shares, as their stock prices are considerably lower than before. 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. | Only Trulieve Cannabis (OTC: TCNNF) is continuing to post significantly more sales than it did a year ago. And make no mistake – it is coming. The Motley Fool has positions in and recommends Trulieve Cannabis Corp. |
36516.0 | 2022-07-15 00:00:00 UTC | Here's Why Aurora Cannabis, Canopy Growth, Tilray Brands, and Sundial Growers Are All Tanking Today | ACB | https://www.nasdaq.com/articles/heres-why-aurora-cannabis-canopy-growth-tilray-brands-and-sundial-growers-are-all-tanking | nan | nan | What happened
What a difference a day makes. Yesterday, the cannabis space was glowing green thanks to two potential catalysts coming down the pike. Specifically, Germany is reportedly moving to legalize adult-use marijuana by 2024 following a sea change in its political leadership. Second, there were rumblings out of Washington, D.C., that a long-awaited Senate bill to legalize marijuana was close to a vote.
As this German push to legalize cannabis for adult use is still two years away, and the aforementioned Senate bill doesn't appear to have the votes needed to pass, speculators are apparently rethinking their positions. Underscoring this point, shares of some of Canada's top marijuana companies are all deep in the red today.
As of 12:23 p.m. ET Friday afternoon, Aurora Cannabis' (NASDAQ: ACB) stock was down by a hefty 7.8%, shares of Canopy Growth (NASDAQ: CGC) were underwater by 8.8%, Tilray Brands' (NASDAQ: TLRY) share price was lower by 11%, and Sundial Growers (NASDAQ: SNDL) had fallen nearly 3%.
Image source: Getty Images.
So what
The stocks of Aurora, Canopy Growth, Tilray, and Sundial Growers have all been under immense pressure this year. The industry's deteriorating fundamentals and anemic growth prospects have caused a large number of shareholders to move onto greener pastures -- especially with the U.S. stock markets in full retreat over recessionary fears.
Stated simply, cannabis stocks desperately need a needle-moving catalyst to entice investors back. Germany legalizing weed for adults would certainly go a long way toward meeting that goal. The country, after all, is one of the most valuable in terms of potential annual sales for cannabis companies. Tilray, in particular, already has a sizable footprint there.
The problem is that the legislative process to legalize weed in Germany won't happen overnight. While the country does seem to be on the path toward legalization, several important pieces have to fall in place first. As such, it's not shocking to see speculators rethinking their positions today.
On the U.S. front, there is little hope in political circles that this Senate bill -- or similar bills in the U.S. House of Representatives -- will become law anytime soon. There is substantial opposition to these bills from Republican lawmakers, and President Biden has never shown much support for full legalization. Therefore, this potential catalyst arguably doesn't have much weight behind it.
Now what
Are any of these top Canadian cannabis stocks a strong buy right now? All things considered, I think Tilray Brands is probably the best of the bunch. Aurora and Canopy Growth are both staring down some problematic issues with their core fundamentals right now. And Sundial Growers has to address its sub-$1 share price in order to remain listed on the Nasdaq stock exchange. Tilray Brands, on the other hand, has a potential competitive advantage in the intriguing European market. That said, this cannabis stock is still a long-term proposition.
10 stocks we like better than Aurora Cannabis Inc.
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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 Friday afternoon, Aurora Cannabis' (NASDAQ: ACB) stock was down by a hefty 7.8%, shares of Canopy Growth (NASDAQ: CGC) were underwater by 8.8%, Tilray Brands' (NASDAQ: TLRY) share price was lower by 11%, and Sundial Growers (NASDAQ: SNDL) had fallen nearly 3%. As this German push to legalize cannabis for adult use is still two years away, and the aforementioned Senate bill doesn't appear to have the votes needed to pass, speculators are apparently rethinking their positions. The industry's deteriorating fundamentals and anemic growth prospects have caused a large number of shareholders to move onto greener pastures -- especially with the U.S. stock markets in full retreat over recessionary fears. | ET Friday afternoon, Aurora Cannabis' (NASDAQ: ACB) stock was down by a hefty 7.8%, shares of Canopy Growth (NASDAQ: CGC) were underwater by 8.8%, Tilray Brands' (NASDAQ: TLRY) share price was lower by 11%, and Sundial Growers (NASDAQ: SNDL) had fallen nearly 3%. So what The stocks of Aurora, Canopy Growth, Tilray, and Sundial Growers have all been under immense pressure this year. The problem is that the legislative process to legalize weed in Germany won't happen overnight. | ET Friday afternoon, Aurora Cannabis' (NASDAQ: ACB) stock was down by a hefty 7.8%, shares of Canopy Growth (NASDAQ: CGC) were underwater by 8.8%, Tilray Brands' (NASDAQ: TLRY) share price was lower by 11%, and Sundial Growers (NASDAQ: SNDL) had fallen nearly 3%. As this German push to legalize cannabis for adult use is still two years away, and the aforementioned Senate bill doesn't appear to have the votes needed to pass, speculators are apparently rethinking their positions. See the 10 stocks *Stock Advisor returns as of June 2, 2022 George Budwell has no position in any of the stocks mentioned. | ET Friday afternoon, Aurora Cannabis' (NASDAQ: ACB) stock was down by a hefty 7.8%, shares of Canopy Growth (NASDAQ: CGC) were underwater by 8.8%, Tilray Brands' (NASDAQ: TLRY) share price was lower by 11%, and Sundial Growers (NASDAQ: SNDL) had fallen nearly 3%. So what The stocks of Aurora, Canopy Growth, Tilray, and Sundial Growers have all been under immense pressure this year. 10 stocks we like better than Aurora Cannabis Inc. |
36517.0 | 2022-07-14 00:00:00 UTC | Could This Be the Catalyst Cannabis Stocks Desperately Need? | ACB | https://www.nasdaq.com/articles/could-this-be-the-catalyst-cannabis-stocks-desperately-need | nan | nan | It's a tough time to be holding stocks, and it's even tougher if you have cannabis stocks in your portfolio. The entire sector has been in shambles as valuations are falling hard. Major cannabis producer Canopy Growth was worth more than $10 billion last year; right now, its valuation is struggling to stay above just $1 billion. The Horizons Marijuana Life Sciences ETF has crashed 64% in 12 months.
But the good news is that stocks in the cannabis industry can sometimes pop on news of legalization in a major market. Even though it may not necessarily mean every business will benefit from the development, it can help shine a light on the industry's promising growth potential and remind investors of the opportunities there.
That's what the industry desperately needs right now -- some sort of positive news to get investors bullish on the sector again. And it may not be long before it has that.
Is Germany on the cusp of marijuana legalization?
Last year, Germany elected an entirely new government under Olaf Scholz, the country's new chancellor, succeeding Angela Merkel, who was in power for 16 years. And one industry that has been receiving lots of attention since the change in leadership is cannabis. Medical marijuana is legal in the country, but the government is now looking at allowing adult-use pot as well. And there's plenty of incentive to go ahead with it -- some estimates project it will mean more than $5 billion in tax revenue and cost savings for the country. Plus, it could create 27,000 jobs.
This would be incredibly significant: Germany would instantly become the largest country in the world to legalize the substance, plus it could lead to other European countries following suit. In 2021, Malta became just the first country in the European Union to legalize marijuana, allowing people to grow it at home and permitting personal use.
The German government is working on a draft bill to legalize marijuana, and it could potentially be approved next year.
Multiple cannabis producers could benefit from this
One company that is certainly excited about these prospects is Canadian-based cannabis producer Tilray Brands (NASDAQ: TLRY). Part of its ambitious plan to get to $4 billion in annual revenue by the end of fiscal 2024 (its year ends in May) includes generating $1 billion from the European market. Tilray currently has a medical distribution business in Germany, CC Pharma, which could help accelerate its growth in Europe. CC Pharma has a network of suppliers it works with in Europe and has "preferred access" to 13,000 pharmacies in Germany. Last fiscal year, the company's distribution revenue (which mainly comes from CC Pharma) totaled $277.3 million for the period ending May 31.
Tilray in total has generated just $617 million in revenue over the trailing 12 months, so hitting its aggressive targets in such a short period may be a stretch. It will definitely benefit from the opportunities in the German market, but management may be too optimistic about how well the business will do.
Another company that is targeting the area is Aurora Cannabis (NASDAQ: ACB), which calls itself "the distinct market leader in the German flower segment." Going global has been a key focus for Aurora, which states on its website that it has a footprint that spans 25 countries.
In the period ending March 31, the company's international medical marijuana revenue grew by 55% year over year, totaling 14.6 million Canadian dollars. The company's key international markets include Germany, Poland, Israel, the U.K., and Australia. Unlike Tilray, Aurora hasn't outlined an aggressive target for its European business. But without a large company like CC Pharma helping it expand, plus Aurora's constant cash burn and need to raise money, it maintaining or growing any leadership position in the German market doesn't appear likely in the long run.
Is now the time to invest in cannabis?
The cannabis sector looks like a sleeping giant right now. Investors look to have given up on it, but there are some mammoth opportunities there. Once optimism returns to the sector (and Germany legalizing marijuana may do the trick), stocks could soar, as many of them look overdue for some bullishness. Buying before that happens may set investors up for big gains later on.
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. | Another company that is targeting the area is Aurora Cannabis (NASDAQ: ACB), which calls itself "the distinct market leader in the German flower segment." Even though it may not necessarily mean every business will benefit from the development, it can help shine a light on the industry's promising growth potential and remind investors of the opportunities there. But without a large company like CC Pharma helping it expand, plus Aurora's constant cash burn and need to raise money, it maintaining or growing any leadership position in the German market doesn't appear likely in the long run. | Another company that is targeting the area is Aurora Cannabis (NASDAQ: ACB), which calls itself "the distinct market leader in the German flower segment." Last fiscal year, the company's distribution revenue (which mainly comes from CC Pharma) totaled $277.3 million for the period ending May 31. In the period ending March 31, the company's international medical marijuana revenue grew by 55% year over year, totaling 14.6 million Canadian dollars. | Another company that is targeting the area is Aurora Cannabis (NASDAQ: ACB), which calls itself "the distinct market leader in the German flower segment." In the period ending March 31, the company's international medical marijuana revenue grew by 55% year over year, totaling 14.6 million Canadian dollars. 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. | Another company that is targeting the area is Aurora Cannabis (NASDAQ: ACB), which calls itself "the distinct market leader in the German flower segment." That's what the industry desperately needs right now -- some sort of positive news to get investors bullish on the sector again. Medical marijuana is legal in the country, but the government is now looking at allowing adult-use pot as well. |
36518.0 | 2022-07-11 00:00:00 UTC | Why Shares of Aurora Cannabis, Canopy Growth, and Sundial Growers Are Slumping Today | ACB | https://www.nasdaq.com/articles/why-shares-of-aurora-cannabis-canopy-growth-and-sundial-growers-are-slumping-today | nan | nan | What happened
Marijuana stocks are in retreat yet again today. Specifically, shares of Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) were both down by approximately 6.8%, while Sundial Growers (NASDAQ: SNDL) stock had fallen 5.5% as of 10:36 a.m. ET Monday morning.
Cannabis equities have been steadily moving lower in 2022. The industry has struggled in the face of supply gluts, shifting consumer trends, a fragmented legal landscape in key geographies like the U.S., banking limitations, and margin erosion stemming from legal and illegal competition, among many other headwinds.
Image Source: Getty Images.
So what
Shares of Aurora Cannabis, Canopy Growth, and Sundial growers are likely dipping again today due to concerns about this week's spate of upcoming corporate earnings. Investors appear to be worried that inflation may have cut into corporate profits over the prior three-month period. Underscoring this point, every major U.S. stock index is down by almost 1% at the time of this writing.
Why are these top marijuana stocks getting punished over investors' concerns about corporate profits? The fact of the matter is that Aurora, Canopy, and Sundial have all been struggling to achieve profitability since their inception.
Speaking to this point, the high-value U.S. cannabis market is still largely off-limits for these Canada-based companies, and their domestic market is simply too small to support multiple billion-dollar enterprises.
As a result, this unfavorable situation in the budding cannabis space has become an increasingly hard sell to investors. As such, it's not altogether surprising to see these top cannabis stocks come under pressure as investors steadily lose their appetite for risk.
Now what
Are any of these beaten-down cannabis stocks a buy right now? At first glance, shares of Aurora and Canopy might be tempting at these bargain-basement levels. After all, both of these companies could grow into titans of the massive global cannabis market in the years to come.
Unfortunately, these two early pioneers of the legal marijuana game are both staring down some serious financial headwinds at the moment. So until their top and bottom lines stabilize, investors are probably best served by staying on the sidelines.
As far as Sundial Growers is concerned, the company is in the process of dealing with its share price not being in compliance with the Nasdaq's $1 bid requirement. Now, the company may come out in a far stronger position once this key overhang with its stock has finally been addressed. But its shares don't exactly come across as a screaming buy ahead of this material event.
10 stocks we like better than Aurora Cannabis Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
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! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2022
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. | Specifically, shares of Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) were both down by approximately 6.8%, while Sundial Growers (NASDAQ: SNDL) stock had fallen 5.5% as of 10:36 a.m. So what Shares of Aurora Cannabis, Canopy Growth, and Sundial growers are likely dipping again today due to concerns about this week's spate of upcoming corporate earnings. As such, it's not altogether surprising to see these top cannabis stocks come under pressure as investors steadily lose their appetite for risk. | Specifically, shares of Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) were both down by approximately 6.8%, while Sundial Growers (NASDAQ: SNDL) stock had fallen 5.5% as of 10:36 a.m. So what Shares of Aurora Cannabis, Canopy Growth, and Sundial growers are likely dipping again today due to concerns about this week's spate of upcoming corporate earnings. Why are these top marijuana stocks getting punished over investors' concerns about corporate profits? | Specifically, shares of Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) were both down by approximately 6.8%, while Sundial Growers (NASDAQ: SNDL) stock had fallen 5.5% as of 10:36 a.m. * 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 June 2, 2022 George Budwell has no position in any of the stocks mentioned. | Specifically, shares of Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) were both down by approximately 6.8%, while Sundial Growers (NASDAQ: SNDL) stock had fallen 5.5% as of 10:36 a.m. Why are these top marijuana stocks getting punished over investors' concerns about corporate profits? 10 stocks we like better than Aurora Cannabis Inc. |
36519.0 | 2022-07-05 00:00:00 UTC | CANADA STOCKS-TSX futures down as commodities fall on recession worries | ACB | https://www.nasdaq.com/articles/canada-stocks-tsx-futures-down-as-commodities-fall-on-recession-worries | nan | nan | July 5 (Reuters) - Futures for Canada's resource-heavy main stock index edged lower on Tuesday as oil and metal prices slipped on mounting worries over a global economic downturn.
September futures on the S&P/TSX index SXFc1 were down 0.4% at 7:17 a.m. ET.
Brent crude LCOc1 fell more than 1%, reversing earlier gains, as concerns of a possible global recession curtailing fuel demand outweighed supply disruption fears, highlighted by an expected production cut in Norway. O/R
Copper prices crumbled to their lowest in 17 months as the dollar surged, making commodities priced in the U.S. currency more expensive for overseas buyers. MET/L
Adding to fears of a global slowdown, data showed business growth across the euro zone slowed further last month.
Separately, a key part of the U.S. Treasury yield curve briefly inverted for the first time since mid-June, reflecting investor concerns that hefty interest-rate hikes could tip the U.S. economy into a recession. US/
Dow e-minis 1YMcv1 were down 160 points, or 0.52% at 7:17 a.m. ET, while S&P 500 e-minis EScv1 were down 21.75 points, or 0.57% and Nasdaq 100 e-minis NQcv1 were down 85.25 points, or 0.73%. .N
Statistics Canada's building permits data for May is due at 08:30 a.m. ET.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended 0.9% higher at 19,028.86 on Monday in thin trading. .TO
TOP STORIES TOP/CAN
Chinese authorities have blocked Canadian government representatives from attending the trial of Chinese-Canadian billionaire Xiao Jianhua, the Canadian embassy said on Tuesday.
Canadian National Railway CNR.TO said a strike by unionized signals and communications workers would end on Tuesday after the company and the International Brotherhood of Electrical Workers (IBEW) agreed to binding arbitration.
ANALYST RESEARCH HIGHLIGHTS RCH/CA
Bolarex Inc BLX.TO : TD Securities cuts to "buy" from "action list buy"
Sernova Corp SVA.TO : H.C. Wainwright initiates coverage with "buy" rating; target price C$6
Aurora Cannabis Inc ACB.TO : Cowen and Company cuts target price to C$1.85 from C$4
COMMODITIES AT 7:17 a.m. ET
Gold futures GCc2: +0.1% to $1,802.4
GOL/
US crude CLc1: -0.5% to $107.94
O/R
Brent crude LCOc1: -1.6% to $111.67
O/R
MAJOR U.S. ECONOMIC DATA DUE ON TUESDAY
1000 Factory orders mm for May: Expected 0.5%; Prior 0.3%
FOR CANADIAN MARKETS NEWS, CLICK ON CODES:
TSX market report .TO
Canadian dollar and bonds report CAD/CA/
Reuters global stocks poll for Canada EQUITYPOLL1, EPOLL/CA
Canadian markets directory CANADA
($1= C$1.29)
(Reporting by Devik Jain in Bengaluru; Editing by Vinay Dwivedi)
((Devik.Jain@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. | Bolarex Inc BLX.TO : TD Securities cuts to "buy" from "action list buy" Sernova Corp SVA.TO : H.C. Wainwright initiates coverage with "buy" rating; target price C$6 Aurora Cannabis Inc ACB.TO : Cowen and Company cuts target price to C$1.85 from C$4 COMMODITIES AT 7:17 a.m. July 5 (Reuters) - Futures for Canada's resource-heavy main stock index edged lower on Tuesday as oil and metal prices slipped on mounting worries over a global economic downturn. Brent crude LCOc1 fell more than 1%, reversing earlier gains, as concerns of a possible global recession curtailing fuel demand outweighed supply disruption fears, highlighted by an expected production cut in Norway. | Bolarex Inc BLX.TO : TD Securities cuts to "buy" from "action list buy" Sernova Corp SVA.TO : H.C. Wainwright initiates coverage with "buy" rating; target price C$6 Aurora Cannabis Inc ACB.TO : Cowen and Company cuts target price to C$1.85 from C$4 COMMODITIES AT 7:17 a.m. July 5 (Reuters) - Futures for Canada's resource-heavy main stock index edged lower on Tuesday as oil and metal prices slipped on mounting worries over a global economic downturn. TSX market report .TO Canadian dollar and bonds report CAD/CA/ Reuters global stocks poll for Canada EQUITYPOLL1, EPOLL/CA Canadian markets directory CANADA | Bolarex Inc BLX.TO : TD Securities cuts to "buy" from "action list buy" Sernova Corp SVA.TO : H.C. Wainwright initiates coverage with "buy" rating; target price C$6 Aurora Cannabis Inc ACB.TO : Cowen and Company cuts target price to C$1.85 from C$4 COMMODITIES AT 7:17 a.m. July 5 (Reuters) - Futures for Canada's resource-heavy main stock index edged lower on Tuesday as oil and metal prices slipped on mounting worries over a global economic downturn. Brent crude LCOc1 fell more than 1%, reversing earlier gains, as concerns of a possible global recession curtailing fuel demand outweighed supply disruption fears, highlighted by an expected production cut in Norway. | Bolarex Inc BLX.TO : TD Securities cuts to "buy" from "action list buy" Sernova Corp SVA.TO : H.C. Wainwright initiates coverage with "buy" rating; target price C$6 Aurora Cannabis Inc ACB.TO : Cowen and Company cuts target price to C$1.85 from C$4 COMMODITIES AT 7:17 a.m. July 5 (Reuters) - Futures for Canada's resource-heavy main stock index edged lower on Tuesday as oil and metal prices slipped on mounting worries over a global economic downturn. September futures on the S&P/TSX index SXFc1 were down 0.4% at 7:17 a.m. |
36520.0 | 2022-07-03 00:00:00 UTC | Avoid These 2 Tantalizingly Cheap Growth Stocks | ACB | https://www.nasdaq.com/articles/avoid-these-2-tantalizingly-cheap-growth-stocks | nan | nan | When you're browsing for growth stocks to invest in, sometimes it's best to leave the stuff you see in the bargain bin for someone else to buy. As the legendary Warren Buffett once said, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
And that's just as true when you're considering a beaten-down business at a dirt-cheap price; there's no substitute for quality. Let's take a peek at a pair of popular growth stocks in the cannabis industry to see exactly how true Buffett's advice can ring.
1. Tilray Brands
Considering Tilray Brands' (NASDAQ: TLRY) rock-bottom valuation, it's easy to see why bargain-hunting investors might be tempted to buy a few shares. Its price-to-sales (P/S) ratio is around 2.3, which is quite a bit lower than other multi-state operators like Curaleaf, Sundial Growers, and Canopy Growth, to name just a few. But the company's continual struggle to grow and position itself for potential cannabis legalization in the U.S. doesn't paint a pretty picture about its future returns.
First, over the last three years, Tilray only grew its quarterly revenue by around 60.9%, reaching above $151.8 million in the most recent three-month period. That's not the trajectory of a rapidly growing company that is exploiting the cannabis gold rush, to say the least. In the same period, its stock has fallen by around 92.6%, and its total expenses have sharply increased as a share of quarterly revenue. Likewise, rising expenses indicate that its long-standing plans to dominate the medical cannabis market in the E.U. by spinning off tariff-exempt and low-cost manufacturing facilities in Portugal are floundering.
Furthermore, it's unclear how Tilray will be able to trim costs without simultaneously destroying revenue, given that it's engaged in several different lines of business without much overlap. Its beer brewing subsidiary and its non-intoxicating hemp-based food brands don't have much in common with its medicinal and recreational marijuana products segments, as by their nature, their inputs, processing methods, packaging, and distribution channels are all entirely different. So unless management is content to allow revenue growth to plod along while expenses rise, something needs to change -- and that's what makes Tilray a very risky stock to invest in, even if it's dirt cheap.
2. Aurora Cannabis
Like Tilray, Aurora Cannabis (NASDAQ: ACB) has a P/S multiple of near 1.5, making it even cheaper in comparison to other major cannabis operators. It's unprofitable, but it claims to be the top-grossing Canadian medicinal cannabis company, and it also has a significant footprint in the EU, which may not be doing it any favors. And, to make its similarities to Tilray even more pronounced, its expenses are getting larger and larger compared to its quarterly revenue, all while its quarterly sales have shrunk by more than 44.8% over the last three years, arriving at a scant $39.8 million in quarterly revenue most recently.
Aurora also has a habit of issuing a lot of new stock to raise funds and finance acquisitions, which leaves shareholders at a persistent risk of getting diluted. On June 1, it closed its latest round of bought deal financing for $172.5 million in units comprised of one share and one warrant. Until the company becomes profitable, the risk of dilution will remain high.
Management holds that Aurora will reach an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) run rate before the close of the first half of its 2023 fiscal year. The issue is, to accomplish that objective, it might need to continue making cuts to its production facilities, not to mention finding other cost savings that could dramatically reduce its competitive capabilities. Though there's no guarantee that the cuts will fail to move the company toward profitability, the fact is that its revenue has already been declining for years, even amid growing demand for cannabis.
Despite how cheap each share of Aurora Cannabis might be, it's best to stay far away until it can demonstrate a combination of profitability and growth -- a hard standard for any cannabis company to meet.
10 stocks we like better than Tilray, Inc.
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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 Like Tilray, Aurora Cannabis (NASDAQ: ACB) has a P/S multiple of near 1.5, making it even cheaper in comparison to other major cannabis operators. Its beer brewing subsidiary and its non-intoxicating hemp-based food brands don't have much in common with its medicinal and recreational marijuana products segments, as by their nature, their inputs, processing methods, packaging, and distribution channels are all entirely different. Management holds that Aurora will reach an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) run rate before the close of the first half of its 2023 fiscal year. | Aurora Cannabis Like Tilray, Aurora Cannabis (NASDAQ: ACB) has a P/S multiple of near 1.5, making it even cheaper in comparison to other major cannabis operators. As the legendary Warren Buffett once said, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." Tilray Brands Considering Tilray Brands' (NASDAQ: TLRY) rock-bottom valuation, it's easy to see why bargain-hunting investors might be tempted to buy a few shares. | Aurora Cannabis Like Tilray, Aurora Cannabis (NASDAQ: ACB) has a P/S multiple of near 1.5, making it even cheaper in comparison to other major cannabis operators. And, to make its similarities to Tilray even more pronounced, its expenses are getting larger and larger compared to its quarterly revenue, all while its quarterly sales have shrunk by more than 44.8% over the last three years, arriving at a scant $39.8 million in quarterly revenue most recently. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Alex Carchidi has no position in any of the stocks mentioned. | Aurora Cannabis Like Tilray, Aurora Cannabis (NASDAQ: ACB) has a P/S multiple of near 1.5, making it even cheaper in comparison to other major cannabis operators. 10 stocks we like better than Tilray, Inc. That's right -- they think these 10 stocks are even better buys. |
36521.0 | 2022-06-30 00:00:00 UTC | Is Aurora Cannabis Too Cheap to Pass Up Right Now? | ACB | https://www.nasdaq.com/articles/is-aurora-cannabis-too-cheap-to-pass-up-right-now | nan | nan | Aurora Cannabis (NASDAQ: ACB) is one of the most beaten-down cannabis stocks in the entire industry. Investors will recall that back in 2018, Aurora announced it was acquiring medical marijuana company MedReleaf for more than $2.5 billion in what at the time was the sector's largest deal. Today, Aurora is worth about one-fifth of that value, with a market cap of over $400 million.
The days of the company being among the industry leaders are long gone. Now, it's more of an underdog trying to get back to respectability. Having lost more than 98% of its value since the start of 2018, it's hard not to be bearish on Aurora. But has the stock finally reached a point where it could be considered a good buy?
Aurora recently received multiple upgrades
Analysts from Cantor Fitzgerald and Stifel Nicolaus upgraded their ratings on Aurora in June. One of the reasons was due to the company's opportunities in the legal market in Europe. One analyst, Pablo Zuanic, believes that since Aurora is one of the few companies in North America that have licenses to grow marijuana in Germany, it can benefit from the prospects in that market.
The government in Germany is looking at potentially legalizing marijuana and legislation could be ready this year. Germany is among the largest international cannabis markets in the world, with research company BDSA saying it and Mexico will lead the growth for that region. By 2026, the entire international market will be worth $9.5 billion. By comparison, the Canadian and U.S. cannabis markets will be worth $6.3 billion and $46 billion, respectively.
Being one of the few companies to potentially take advantage of the industry's early growth in Germany, Aurora could find itself in a more desirable position than in Canada, where competition is fierce and margins are slim. The market in Germany is not legal yet, but it's easy to see why analysts and investors could soon be more bullish on Aurora.
Domestically, the company is still in cost-cutting mode
Regardless of what happens in Germany, Aurora still needs to clean up its operations in Canada. It has been reducing its expenses along with sales over the past few years, shutting down plants and laying off employees along the way.
ACB Revenue (Quarterly) data by YCharts.
In the third quarter of fiscal 2022 (the period ending March 31), Aurora reported an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of 12.3 million Canadian dollars. Getting to breakeven remains a goal for the business and it says that by the first half of fiscal 2023, it will be at a positive adjusted EBITDA run rate.
Aurora has promised adjusted EBITDA profitability in the past, so regardless of when it says it will get there, investors need to take it with a grain of salt. The point is, the company still has work to do in bringing down its costs.
Plus, I'd argue that it's not adjusted EBITDA that investors care about, it's positive cash flow. Dilution is a huge problem for Aurora, and over the nine-month period ending March 31, it used more than CA$83 million to fund its day-to-day operations. As long as that cash burn continues, investors will need to worry about more dilution. Most recently, in June, the company raised $172.5 million through yet another offering.
Aurora remains a big gamble
Aurora trades at just 1.7 times sales, which is cheap compared to Canopy Growth, where investors are paying 3.6 times revenue. But that's irrelevant because as long as Aurora has problems with growth and cash burn, there's really no reason to consider buying the pot stock. Buying shares of the business is an extremely risky bet for investors to make. There is potential that if Germany legalizes marijuana, Aurora could get a big financial boost from that. However, that can be difficult to estimate, and it doesn't fix the company's problems in its home country.
Although I can see a path for the stock to rally and the business to become more investable (the cash burn has to stop first), that's not something that I expect to happen 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) is one of the most beaten-down cannabis stocks in the entire industry. ACB Revenue (Quarterly) data by YCharts. Investors will recall that back in 2018, Aurora announced it was acquiring medical marijuana company MedReleaf for more than $2.5 billion in what at the time was the sector's largest deal. | Aurora Cannabis (NASDAQ: ACB) is one of the most beaten-down cannabis stocks in the entire industry. ACB Revenue (Quarterly) data by YCharts. In the third quarter of fiscal 2022 (the period ending March 31), Aurora reported an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of 12.3 million Canadian dollars. | Aurora Cannabis (NASDAQ: ACB) is one of the most beaten-down cannabis stocks in the entire industry. ACB Revenue (Quarterly) data by YCharts. Investors will recall that back in 2018, Aurora announced it was acquiring medical marijuana company MedReleaf for more than $2.5 billion in what at the time was the sector's largest deal. | Aurora Cannabis (NASDAQ: ACB) is one of the most beaten-down cannabis stocks in the entire industry. ACB Revenue (Quarterly) data by YCharts. Aurora has promised adjusted EBITDA profitability in the past, so regardless of when it says it will get there, investors need to take it with a grain of salt. |
36522.0 | 2022-06-29 00:00:00 UTC | Can These Beaten-Down Growth Stocks Be Revived? | ACB | https://www.nasdaq.com/articles/can-these-beaten-down-growth-stocks-be-revived | nan | nan | The S&P 500 has dipped 18% so far this year, but this distressed market creates opportunities to buy excellent stocks in industries with massive potential. Marijuana is one such sector. The global legal marijuana market could grow at a compound rate of 25% by 2030, according to Grand View Research.
However, Canadian cannabis stocks are struggling to grow revenue and earn profits, which is pulling down their stock prices. One-time investor favorites Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) have seen their stocks dip more than 90% in the last three years.
Aurora and Canopy have been in pursuit of positive earnings before interest, taxes, depreciation, and amortization (EBITDA) for quite a while now, but have failed to reach their goal. Investors who already hold the stocks might be wondering whether it is time to sell. Let's dig in to determine if these beaten-down growth stocks can come back to life anytime sooner.
Image source: Getty Images.
Canopy Growth
Canopy's fourth-quarter and fiscal-year 2022 results did not please investors. Fiscal 2022 net revenue declined 9% to 520 million Canadian dollars ($403 million) from fiscal 2021. Canadian recreational business fell 10%, while its medical cannabis business dipped 5% year over year.
Management stated in theearnings callthat transitioning its product mix to focus on premium products caused this dip in revenue. The company said industrywide pricing pressure brought down its gross margin for the year, which came in at a negative 37%. Besides regulatory delays, rising competition has also led to many smaller players reducing their prices to attract consumers, thereby affecting overall sales.
As a result, its adjusted EBITDA loss came in at CA$415 million, versus CA$340 million in the prior year.
It secured a strong partner to do its financial heavy lifting when U.S. beverage giant Constellation Brands invested CA$245 million in Canopy in 2017. It owns a 38.6% stake in Canopy.
It ended the quarter with cash and cash equivalents of CA$776 million and short-term investments of CA$595.7 million. This partnership has kept Canopy safe for now, but it has to work on its top line to be a profitable pot stock.
Canopy recently launched an array of recreational offerings under its 7Acres, Ace Valley, Deep Space, and Doja brands. These products include cannabis flowers, beverages infused with tetrahydrocannabinol (THC), pre-rolled joints, and some new offerings for craft cannabis connoisseurs. Investors have to wait and see if these new products will help Canopy boost its revenue. It continues to reduce its selling, general and administrative expenses, which fell 18% to CA$472 million compared to fiscal 2021.
Aurora Cannabis
Not much has changed for Aurora this year. In its recent third quarter (ended March 31), revenue fell 9% year over year to CA$50 million. Its consumer cannabis revenue took a drastic hit of 43% to CA$10 million, driven by industrywide pricing pressure, according to management.
Its medical cannabis revenue jumped 8% to CA$39 million from the year-ago period, but it was not enough to bring in profits. This overall dip in revenue led to another quarter of EBITDA losses, which stood at CA$12 million -- no surprise there.
Aurora has repeatedly failed to meet its EBITDA target in the last two years. But yet again, the company did not shy away from reassuring investors it would be EBITDA-positive by the end of fiscal 2023.
To make it happen, it has to grow revenue drastically while keeping costs lower, which I doubt is possible anytime sooner.
Management discussed its plan to launch 40 new products (medical and recreational) between April and July to boost revenue.
Aurora is smart to launch new products to keep up with its peers and the expanding cannabis market. But launching products involves spending money, and the company has proved it is not very good at that. It claims to have the strongest balance sheet in the industry with CA$455 million in cash. But most of it has been raised by issuing new shares. From total outstanding shares of about 100 million at the end of March 2020, it has now gone up to 215 million shares as of the quarter ended March 2022.
A wait-and-see approach
Besides Constellation, Canopy has pending partnership deals with Acreage Holdings, Wana Brands, and Jetty Extracts, which will be finalized whenever U.S. federal legalization comes to fruition. Aurora doesn't have any strong partners in the U.S. yet, but it acquired hemp-derived CBD company Reliva in 2020.
Canopy and Aurora both have high expectations from the U.S. cannabis market. But it is a long shot as domestic pot companies (some of which are profitable) will be the first to benefit from federal legalization (if and when that happens). I believe that to grow revenue now, both should focus on the Canadian and the European markets, where they have an established presence. Estimates show the European market could grow at a compound annual rate of 29.6% to $37 billion by 2027, according to Research and Markets.
All hope is not lost for Canopy and Aurora, but it could take a long time before either could see green on their bottom line. The average Wall Street analysis has an underperform rating for Canopy with a hold rating for Aurora. I would advise you to steer clear of these two until they show a couple of quarters' worth of positive adjusted EBITDA and strong sales growth. For those interested in cannabis stocks, the U.S. domestic players are a much better option with outstanding financials and long-term prospects.
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 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. | One-time investor favorites Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) have seen their stocks dip more than 90% in the last three years. It secured a strong partner to do its financial heavy lifting when U.S. beverage giant Constellation Brands invested CA$245 million in Canopy in 2017. A wait-and-see approach Besides Constellation, Canopy has pending partnership deals with Acreage Holdings, Wana Brands, and Jetty Extracts, which will be finalized whenever U.S. federal legalization comes to fruition. | One-time investor favorites Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) have seen their stocks dip more than 90% in the last three years. Canadian recreational business fell 10%, while its medical cannabis business dipped 5% year over year. It secured a strong partner to do its financial heavy lifting when U.S. beverage giant Constellation Brands invested CA$245 million in Canopy in 2017. | One-time investor favorites Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) have seen their stocks dip more than 90% in the last three years. However, Canadian cannabis stocks are struggling to grow revenue and earn profits, which is pulling down their stock prices. In its recent third quarter (ended March 31), revenue fell 9% year over year to CA$50 million. | One-time investor favorites Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) have seen their stocks dip more than 90% in the last three years. As a result, its adjusted EBITDA loss came in at CA$415 million, versus CA$340 million in the prior year. In its recent third quarter (ended March 31), revenue fell 9% year over year to CA$50 million. |
36523.0 | 2022-06-28 00:00:00 UTC | 2 Reasons Aurora Could Recover From Significant Pruning | ACB | https://www.nasdaq.com/articles/2-reasons-aurora-could-recover-from-significant-pruning | nan | nan | Aurora Cannabis (NASDAQ: ACB) announced in early June an additional round of cost-saving measures as part of its business transformation plan that has already brought on major adjustments to the company in the past two years. Aurora's shares dropped throughout June after it bought back millions of dollars in convertible debt, announced it would close a major facility, and laid off a huge chunk of its workforce. All this is bad news for the international cannabis operator -- but a strong showing in Europe's medical cannabis market, and its major presence in Canadian medical cannabis, should provide long-term hope amid the short-term gloom.
Aurora's plan to shake up the company
Aurora unveiled its business transformation plan in February 2020, and updated them four months later, announcing that it was:
Closing five smaller-scale growing facilities across Canada
Working toward cutting 30% of its production staff and 25% of its sales and marketing staff
Changing its leadership team, including the retirement of President Steve Dobler
Even as the company closed some of its Canadian operations, it increased production in its Denmark facility in an effort to supply the EU medical market. These moves were just the beginning of its actions over the next two years.
The company got rid of $82.9 million in old, obsolete inventory in Q3 2021, and another $31.6 million worth in Q2 2022 -- products it made but could never sell, and ultimately lost money on.
Aurora's also been selling stock to raise money -- $112 million in the most recent quarter -- which waters down existing investors' holdings. During and after Q3, it spent that exact same amount in cash to buy back its own convertible debt. Those loans' holders could convert the dollar amount of the company's debt into shares of Aurora if the company didn't pay back that debt first. The lower a company's share price, the more shares it has to issue in order to cover the dollar amount of such debt whenever it comes due. Buying back shares early could suggest that Aurora believes its shares will be worth less in the future, and is buying the debt back now to avoid diluting current investors worse later on.
The company also revealed in Q3 that it's fully closing its flagship grow facility in Edmonton, Alberta, bringing its total workforce reduction to 12% of its previous headcount. Aurora believes these changes, however painful, will pay off handsomely. In Q3, it increased its estimate of how much it'll be saving on costs each year by 2023 by roughly $72 million, to $120 million-$136 million.
2 reasons to catch the rebound
Although the facility closures and layoffs are devastating for workers and their communities, Aurora's overall position in the global cannabis market looks stable. Excluding lower sales in the Israeli market , its global medical cannabis net revenue rose 55% year over year. By investing heavily in genetics at its Vancouver facility, and acquiring Thrive, a premium well-established Canadian medical cannabis brand, Aurora has set itself up to remain the No. 1 Canadian medical cannabis company, noting in its Q3 2022 investor call that its Canadian medical cannabis gross revenue is more than its closest competitors' entire gross revenue.
Furthermore, ramping up production at its Nordic facility has paid off, since Aurora has an exclusive contract to produce medical cannabis for the French market. It also has a significant presence in the U.K., Czech Republic, Malta, Germany, Denmark, Poland, and in Australia, where it saw a 300% increase in its Down Under medical cannabis revenue alone.
After its Q3 2022 report on May 12, Aurora shares fell roughly 50%, though they've since risen slightly from their lowest point. However, those early convertible stock buybacks suggest that even the company thinks its shares could go lower.
But as Aurora sheds its debt obligations, and facility and personnel costs continue to fall as the business transformation plan develops, the company's presence in lucrative medical cannabis markets could begin to pay off in the form of increased profits and operational cash flows.
That extra cash could eventually give Aurora room to begin expanding into more countries in Europe. The company has burned cash in three of the last four quarters. If cost cuts help its free cash flow rise, cannabis stock investors should monitor whether it uses those funds to move into new medical cannabis markets in Spain and Switzerland. That would signal the company's readiness to grow again, building on its new premium brand and more efficient footprint.
10 stocks we like better than Aurora Cannabis Inc.
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Lukas Barfield 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) announced in early June an additional round of cost-saving measures as part of its business transformation plan that has already brought on major adjustments to the company in the past two years. Aurora's plan to shake up the company Aurora unveiled its business transformation plan in February 2020, and updated them four months later, announcing that it was: Closing five smaller-scale growing facilities across Canada Working toward cutting 30% of its production staff and 25% of its sales and marketing staff Changing its leadership team, including the retirement of President Steve Dobler Even as the company closed some of its Canadian operations, it increased production in its Denmark facility in an effort to supply the EU medical market. But as Aurora sheds its debt obligations, and facility and personnel costs continue to fall as the business transformation plan develops, the company's presence in lucrative medical cannabis markets could begin to pay off in the form of increased profits and operational cash flows. | Aurora Cannabis (NASDAQ: ACB) announced in early June an additional round of cost-saving measures as part of its business transformation plan that has already brought on major adjustments to the company in the past two years. Aurora's shares dropped throughout June after it bought back millions of dollars in convertible debt, announced it would close a major facility, and laid off a huge chunk of its workforce. All this is bad news for the international cannabis operator -- but a strong showing in Europe's medical cannabis market, and its major presence in Canadian medical cannabis, should provide long-term hope amid the short-term gloom. | Aurora Cannabis (NASDAQ: ACB) announced in early June an additional round of cost-saving measures as part of its business transformation plan that has already brought on major adjustments to the company in the past two years. Aurora's plan to shake up the company Aurora unveiled its business transformation plan in February 2020, and updated them four months later, announcing that it was: Closing five smaller-scale growing facilities across Canada Working toward cutting 30% of its production staff and 25% of its sales and marketing staff Changing its leadership team, including the retirement of President Steve Dobler Even as the company closed some of its Canadian operations, it increased production in its Denmark facility in an effort to supply the EU medical market. Those loans' holders could convert the dollar amount of the company's debt into shares of Aurora if the company didn't pay back that debt first. | Aurora Cannabis (NASDAQ: ACB) announced in early June an additional round of cost-saving measures as part of its business transformation plan that has already brought on major adjustments to the company in the past two years. Aurora's shares dropped throughout June after it bought back millions of dollars in convertible debt, announced it would close a major facility, and laid off a huge chunk of its workforce. In Q3, it increased its estimate of how much it'll be saving on costs each year by 2023 by roughly $72 million, to $120 million-$136 million. |
36524.0 | 2022-06-24 00:00:00 UTC | Why Aurora Cannabis Stock Spiked Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-stock-spiked-today | nan | nan | What happened
Aurora Cannabis' (NASDAQ: ACB) stock had ratcheted upward by more than 8.1% on Friday at 10:11 a.m. ET after a Cantor Fitzgerald analyst, Pablo Zuanic, adjusted his outlook on the company from neutral to overweight, citing its favorable positioning within the rapidly growing European cannabis market.
The upgrade is a welcome reprieve for shareholders, as analysts have overwhelmingly rated Aurora as a hold rather than a buy this year, with a few recommending to sell.
So what
The analyst's new outlook is surprising, considering that over the last year, Aurora's quarterly revenue has fallen by more than 10.8%, its total quarterly expenses have risen by above 13.1%, and its quarterly revenue as a proportion of expenses has risen sharply.
Still, as Zuanic specified, its strong and expanding medicinal marijuana market shares in Germany, Poland, and France could potentially solve the problem of flagging revenues over the next couple of years, especially if those countries opt to legalize cannabis for recreational use.
Now what
Even if the business can continue to gain traction in the EU, its unprofitability is likely to keep investors somewhat leery of piling into the stock regardless of what individual analysts say. Though its recent bought deal offering, which raised gross proceeds of $172.5 million, means that it isn't in any danger of going bankrupt, it still hasn't proven that it can consistently deliver on either top-line revenue growth or margin improvements over the last three years.
So be on the lookout for the next quarterly earnings report, which might shed some more light on how this company plans to become viable for the long term.
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Alexander 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. | What happened Aurora Cannabis' (NASDAQ: ACB) stock had ratcheted upward by more than 8.1% on Friday at 10:11 a.m. ET after a Cantor Fitzgerald analyst, Pablo Zuanic, adjusted his outlook on the company from neutral to overweight, citing its favorable positioning within the rapidly growing European cannabis market. Still, as Zuanic specified, its strong and expanding medicinal marijuana market shares in Germany, Poland, and France could potentially solve the problem of flagging revenues over the next couple of years, especially if those countries opt to legalize cannabis for recreational use. | What happened Aurora Cannabis' (NASDAQ: ACB) stock had ratcheted upward by more than 8.1% on Friday at 10:11 a.m. So what The analyst's new outlook is surprising, considering that over the last year, Aurora's quarterly revenue has fallen by more than 10.8%, its total quarterly expenses have risen by above 13.1%, and its quarterly revenue as a proportion of expenses has risen sharply. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | What happened Aurora Cannabis' (NASDAQ: ACB) stock had ratcheted upward by more than 8.1% on Friday at 10:11 a.m. So what The analyst's new outlook is surprising, considering that over the last year, Aurora's quarterly revenue has fallen by more than 10.8%, its total quarterly expenses have risen by above 13.1%, and its quarterly revenue as a proportion of expenses has risen sharply. * 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! | What happened Aurora Cannabis' (NASDAQ: ACB) stock had ratcheted upward by more than 8.1% on Friday at 10:11 a.m. 10 stocks we like better than Aurora Cannabis Inc. * 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! |
36525.0 | 2022-06-24 00:00:00 UTC | CANADA STOCKS-Toronto index rebounds on tech, healthcare boost | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-rebounds-on-tech-healthcare-boost | nan | nan | By Amal S
June 24 (Reuters) - Canada's main stock index rose on Friday, aided by gains in technology and healthcare shares, while cybersecurity company Blackberry rose on the back of upbeat corporate earnings.
At 9:53 a.m. ET (13:53 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 224.83 points, or 1.2%, at 18,941.95, a day after it slipped to its lowest level in 15 months.
Toronto-listed technology .SPTTTK stocks added 2.7% and healthcare shares .GSPTTHC jumped 5.2%, with pot producers Bausch Health Companies BHC.TO and Aurora Cannabis ACB.TO gaining the most on the index.
Stronger crude prices fueled a 2% rise in the energy sector .SPTTEN as global supply remained tight. O/R
"Canada had a terrible day yesterday and but today it does look like things are trying to bounce back into the weekend. We do have a 2% gain for the oil price, so that could help energy stocks a little bit," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
The financials sector .SPTTFS gained 1%, while the industrials sector .GSPTTIN rose 1.6%.
The benchmark index was set to end the week flat as gains in tech and healthcare stocks countered weakness in commodities, where prices came under pressure from concerns that aggressive rate hikes might trigger a global recession.
"There is a huge reversal going on right now, sectors such as tech that were really knocked down are bouncing back a little bit and the resource stocks which were the one area that had been good in the market this year are just getting clobbered," Cieszynski said.
Energy and mining stocks have declined 6% and 6.6% so far this week.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 0.2% as gold futures GCc1 fell 0.5% to $1,815.8 an ounce. GOL/MET/L
BlackBerry Ltd BB.TO rose 3.7% after trumping estimates for first-quarter revenue on Thursday, powered by growth in its auto products and cybersecurity services segments.
(Reporting by Amal S in Bengaluru; Editing by Devika Syamnath)
((amal.s@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. | Toronto-listed technology .SPTTTK stocks added 2.7% and healthcare shares .GSPTTHC jumped 5.2%, with pot producers Bausch Health Companies BHC.TO and Aurora Cannabis ACB.TO gaining the most on the index. The benchmark index was set to end the week flat as gains in tech and healthcare stocks countered weakness in commodities, where prices came under pressure from concerns that aggressive rate hikes might trigger a global recession. "There is a huge reversal going on right now, sectors such as tech that were really knocked down are bouncing back a little bit and the resource stocks which were the one area that had been good in the market this year are just getting clobbered," Cieszynski said. | Toronto-listed technology .SPTTTK stocks added 2.7% and healthcare shares .GSPTTHC jumped 5.2%, with pot producers Bausch Health Companies BHC.TO and Aurora Cannabis ACB.TO gaining the most on the index. By Amal S June 24 (Reuters) - Canada's main stock index rose on Friday, aided by gains in technology and healthcare shares, while cybersecurity company Blackberry rose on the back of upbeat corporate earnings. The benchmark index was set to end the week flat as gains in tech and healthcare stocks countered weakness in commodities, where prices came under pressure from concerns that aggressive rate hikes might trigger a global recession. | Toronto-listed technology .SPTTTK stocks added 2.7% and healthcare shares .GSPTTHC jumped 5.2%, with pot producers Bausch Health Companies BHC.TO and Aurora Cannabis ACB.TO gaining the most on the index. By Amal S June 24 (Reuters) - Canada's main stock index rose on Friday, aided by gains in technology and healthcare shares, while cybersecurity company Blackberry rose on the back of upbeat corporate earnings. The benchmark index was set to end the week flat as gains in tech and healthcare stocks countered weakness in commodities, where prices came under pressure from concerns that aggressive rate hikes might trigger a global recession. | Toronto-listed technology .SPTTTK stocks added 2.7% and healthcare shares .GSPTTHC jumped 5.2%, with pot producers Bausch Health Companies BHC.TO and Aurora Cannabis ACB.TO gaining the most on the index. By Amal S June 24 (Reuters) - Canada's main stock index rose on Friday, aided by gains in technology and healthcare shares, while cybersecurity company Blackberry rose on the back of upbeat corporate earnings. ET (13:53 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 224.83 points, or 1.2%, at 18,941.95, a day after it slipped to its lowest level in 15 months. |
36526.0 | 2022-06-16 00:00:00 UTC | CANADA STOCKS-TSX hits 13-month low as energy shares drag | ACB | https://www.nasdaq.com/articles/canada-stocks-tsx-hits-13-month-low-as-energy-shares-drag | nan | nan | By Amal S
June 16 (Reuters) - Weakness in energy shares dragged Canada's main stock index to its lowest level in more than a year on Thursday, as fears of a recession loomed following the U.S. Federal Reserve's biggest interest-rate increase since 1994.
At 9:43 a.m. ET (13:43 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 411.18 points, or 2.1%, at 19,200.38, to its lowest level since May 2021, with all sub-sectors in red.
The Fed on Wednesday matched market expectations by hiking interest rates by 75 basis points and projected a slowing economy and rising unemployment in the coming months.
"The market now taking the view that the Fed is willing to tip the US economy into recession if that is the price to pay to return inflation to target," said Stuart Cole, head macro economist at Equiti Capital.
The Swiss National Bank also raised its policy interest rate for the first time in 15 years with a surprise 50 basis point hike that soured global sentiment and sent the safe-haven franc up sharply. MKTS/GLOB
The energy sector .SPTTEN dropped 3.2% as oil prices fell to two-week lows on the back of inflation concerns highlighted by interest rate hikes in the United States, Britain and Switzerland, though tight oil supply limited losses. O/R
Healthcare .GSPTTHC shares fell 3.0%, with pot producers Aurora Cannabis ACB.TO leading the losses on a 4.1% drop.
The financial sector .SPTTFS slipped 2.1%, while the industrial sector .GSPTTIN fell 1.3%.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 1.6% as gold prices retreated on the back of stronger dollar.GOL/
Shares of LifeWorks LWRK.TO jumped 68.4% to the top of the index after Canadian wireless carrier Telus Corp T.TO agreed to buy the company in a C$2.9 billion ($2.24 billion) deal.
On the economic front, domestic wholesale trade decreased by 0.5% in April from March due to a drop in fertilizer imports from Russia, as well as lower prices and volumes for lumber and other wood products, Statistics Canada said.
(Reporting by Amal S in Bengaluru; Editing by Anil D'Silva)
((amal.s@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. | O/R Healthcare .GSPTTHC shares fell 3.0%, with pot producers Aurora Cannabis ACB.TO leading the losses on a 4.1% drop. By Amal S June 16 (Reuters) - Weakness in energy shares dragged Canada's main stock index to its lowest level in more than a year on Thursday, as fears of a recession loomed following the U.S. Federal Reserve's biggest interest-rate increase since 1994. "The market now taking the view that the Fed is willing to tip the US economy into recession if that is the price to pay to return inflation to target," said Stuart Cole, head macro economist at Equiti Capital. | O/R Healthcare .GSPTTHC shares fell 3.0%, with pot producers Aurora Cannabis ACB.TO leading the losses on a 4.1% drop. By Amal S June 16 (Reuters) - Weakness in energy shares dragged Canada's main stock index to its lowest level in more than a year on Thursday, as fears of a recession loomed following the U.S. Federal Reserve's biggest interest-rate increase since 1994. The Fed on Wednesday matched market expectations by hiking interest rates by 75 basis points and projected a slowing economy and rising unemployment in the coming months. | O/R Healthcare .GSPTTHC shares fell 3.0%, with pot producers Aurora Cannabis ACB.TO leading the losses on a 4.1% drop. By Amal S June 16 (Reuters) - Weakness in energy shares dragged Canada's main stock index to its lowest level in more than a year on Thursday, as fears of a recession loomed following the U.S. Federal Reserve's biggest interest-rate increase since 1994. MKTS/GLOB The energy sector .SPTTEN dropped 3.2% as oil prices fell to two-week lows on the back of inflation concerns highlighted by interest rate hikes in the United States, Britain and Switzerland, though tight oil supply limited losses. | O/R Healthcare .GSPTTHC shares fell 3.0%, with pot producers Aurora Cannabis ACB.TO leading the losses on a 4.1% drop. By Amal S June 16 (Reuters) - Weakness in energy shares dragged Canada's main stock index to its lowest level in more than a year on Thursday, as fears of a recession loomed following the U.S. Federal Reserve's biggest interest-rate increase since 1994. The Fed on Wednesday matched market expectations by hiking interest rates by 75 basis points and projected a slowing economy and rising unemployment in the coming months. |
36527.0 | 2022-06-13 00:00:00 UTC | Why Aurora Cannabis Crumbled Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-crumbled-today | nan | nan | What happened
Shares of Aurora Cannabis (NASDAQ: ACB) crumbled by more than 11.7% on Monday as of noon ET amid a widespread decline in markets stemming from inflation concerns and the associated actions to control it as implemented by the Federal Reserve. With the Nasdaq falling by more than 3.7%, today's decline is only the latest rough day for the stock among many.
Growth stocks are being hit particularly hard by the downturn, and to add insult to injury, cannabis stocks haven't been performing well in at least a year, with the industry-tracking AdvisorShares Pure US Cannabis ETF falling by more than 66.6% in the last 12 months.
So what
Aurora has issues that this decline will make worse, starting with being unprofitable and needing more cash. On June 1, it concluded a bought deal offering of 70.4 million of its units, each of which was priced at $2.45 and contains one share and one warrant. In total, the offering was worth around $172.5 million.
The warrants are convertible into shares for the next three years once the stock is above the exercise price of $3.20. Given that the company's shares are trading near $1.20, it's looking unlikely that the warrants will be worth anything before they expire.
Now what
Investors can expect Aurora to face an even more unfavorable financing environment where issuing new shares will be less and less lucrative.
That matters because it may start to run short on cash in around a year if its expenses don't fall significantly. It could still try to take out new debt, but it'll likely have to do so at an expensive interest rate as a result of its shrinking revenue and already-bulging balance sheet.
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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. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) crumbled by more than 11.7% on Monday as of noon ET amid a widespread decline in markets stemming from inflation concerns and the associated actions to control it as implemented by the Federal Reserve. On June 1, it concluded a bought deal offering of 70.4 million of its units, each of which was priced at $2.45 and contains one share and one warrant. Now what Investors can expect Aurora to face an even more unfavorable financing environment where issuing new shares will be less and less lucrative. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) crumbled by more than 11.7% on Monday as of noon ET amid a widespread decline in markets stemming from inflation concerns and the associated actions to control it as implemented by the Federal Reserve. That matters because it may start to run short on cash in around a year if its expenses don't fall significantly. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) crumbled by more than 11.7% on Monday as of noon ET amid a widespread decline in markets stemming from inflation concerns and the associated actions to control it as implemented by the Federal Reserve. Growth stocks are being hit particularly hard by the downturn, and to add insult to injury, cannabis stocks haven't been performing well in at least a year, with the industry-tracking AdvisorShares Pure US Cannabis ETF falling by more than 66.6% in the last 12 months. * 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! | What happened Shares of Aurora Cannabis (NASDAQ: ACB) crumbled by more than 11.7% on Monday as of noon ET amid a widespread decline in markets stemming from inflation concerns and the associated actions to control it as implemented by the Federal Reserve. 10 stocks we like better than Aurora Cannabis Inc. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. |
36528.0 | 2022-06-13 00:00:00 UTC | Down 68% From Its High, Can This Growth Stock Bloom Again? | ACB | https://www.nasdaq.com/articles/down-68-from-its-high-can-this-growth-stock-bloom-again | nan | nan | Exceptional growth stocks are getting hammered in this troubled market. The pot industry, which has already been on a roller-coaster ride for the last two years, is taking an even harder hit. The added pressure of market pessimism toward cannabis reforms has affected the companies' stock prices.
But what if I told you that this presents an excellent opportunity to buy these growth stocks on the dip? The industry is nascent, with huge potential to shine. Growth stocks in general take time to price in the company's performance. One such pot stock is Illinois-based Green Thumb Industries (OTC: GTBIF)
Investors willing to take a long-term view of Green Thumb could be rewarded handsomely as the marijuana market expands. From revenue of $216 million in 2019 to $894 million in 2021, this multi-state operator (MSO) has come a long way. Let's elaborate on how this growth stock has more room to run.
Another spectacular quarter for this MSO
Green Thumb's ability to post profits for nine consecutive quarters in a highly competitive industry is what I admire about this pot stock. Meanwhile, most of its Canadian counterparts, Aurora Cannabis and Canopy Growth are struggling to hit profitability.
Some key advantages of this MSO are its vast national reach and its edibles segment. In 2021, it entered three new markets. The company has gone from 39 stores in 2019 to nearly 80 dispensaries now in 15 states, and its aggressive expansion strategy has worked in its favor. Plus, its edibles brand Incredibles (gummies and chocolates) has ranked in the top five of the 20 best edibles in the market.
Perhaps these factors helped it bring in revenue of $243 million in the first quarter, a surge of 25% year over year. A GAAP net income of $29 million came in higher than $10 million in the year-ago period.
A bullish outlook
The company's home state of Illinois, which legalized recreational cannabis in 2020, has been a strong market for Green Thumb in the last two years. It operates 10 stores there.
Management now looks forward to boosting revenue with New Jersey and other upcoming markets. To answer the question, it has a high chance to bloom again if state legalization continues to ramp up. At the rate at which this MSO is expanding, revenue and profits could get even better. It has opened 10 stores so far this year.
The company is also financially stable to fund its expansion plans. Green Thumb ended its Q1 with $175 million in cash. It also generated a ninth consecutive quarter of positive cash flow from operations of $55 million. Getting capital is still an issue for cannabis companies, as the drug is prohibited at the federal level. Hence, positive cash flow from operations will allow Green Thumb to repay its debt and fund future growth strategies.
There is a mismatch
External headwinds have created a vast mismatch between cannabis companies' fundamentals and their stock prices. Generating close to $1 billion in revenue in a limited legal market is a big deal in itself. Things can turn around quickly in an evolving industry. And when that happens, pot stocks will have more room to run. The marijuana industry in the U.S. could grow at a compounded annual growth rate (CAGR) of 14% to be valued at more than $70 million by 2030.
Green Thumb's stock is also cheap now, trading at a price-to-sales ratio of 2.7. Stronger earnings numbers or any positive movement toward cannabis reforms in the near future could make this stock skyrocket.
GTBIF PS Ratio data by YCharts
Analysts foresee a potential upside of 169% for Green Thumb's stock in the next 12 months. Buying this undervalued stock on the dip now (trading almost 68% below its 52-week high) would be a smart move, rather than when it gets expensive.
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 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 bullish outlook The company's home state of Illinois, which legalized recreational cannabis in 2020, has been a strong market for Green Thumb in the last two years. GTBIF PS Ratio data by YCharts Analysts foresee a potential upside of 169% for Green Thumb's stock in the next 12 months. 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. | One such pot stock is Illinois-based Green Thumb Industries (OTC: GTBIF) Investors willing to take a long-term view of Green Thumb could be rewarded handsomely as the marijuana market expands. Another spectacular quarter for this MSO Green Thumb's ability to post profits for nine consecutive quarters in a highly competitive industry is what I admire about this pot stock. It also generated a ninth consecutive quarter of positive cash flow from operations of $55 million. | One such pot stock is Illinois-based Green Thumb Industries (OTC: GTBIF) Investors willing to take a long-term view of Green Thumb could be rewarded handsomely as the marijuana market expands. Another spectacular quarter for this MSO Green Thumb's ability to post profits for nine consecutive quarters in a highly competitive industry is what I admire about this pot stock. A bullish outlook The company's home state of Illinois, which legalized recreational cannabis in 2020, has been a strong market for Green Thumb in the last two years. | One such pot stock is Illinois-based Green Thumb Industries (OTC: GTBIF) Investors willing to take a long-term view of Green Thumb could be rewarded handsomely as the marijuana market expands. A bullish outlook The company's home state of Illinois, which legalized recreational cannabis in 2020, has been a strong market for Green Thumb in the last two years. At the rate at which this MSO is expanding, revenue and profits could get even better. |
36529.0 | 2022-06-09 00:00:00 UTC | CANADA STOCKS-Toronto index falls for second day as energy shares slide | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-falls-for-second-day-as-energy-shares-slide | nan | nan | By Amal S
June 9 (Reuters) - Canada's resources-heavy main stock index was set to extend losses on Thursday as a slight pullback in oil prices pressured energy shares, while worries around stubborn inflation and the aggressive interest rate hikes weighed on sentiment.
At 9:45 a.m. ET (13:45 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 111.58 points, or 0.54%, at 20,680.85.
The energy sector .SPTTEN dropped 1.4% as U.S. crude CLc1 prices were down 0.7% a barrel, while Brent crude LCOc1 lost 0.4%. O/R
Healthcare .GSPTTHC shares slipped 2.2%, with pot stocks including Canopy Growth WEED.TO, Tilray Brands TLRY.O, Aurora Cannabis ACB.TO down between 2.03% and 3.47%.
Earlier in the day, the European Central Bank confirmed it would end a long-running bond-buying scheme on July 1 and signaled a string of interest rate hikes.
The focus now shifts to U.S. inflation data due on Friday, with the Federal Reserve expected to continue with its 50 basis points rate increases at its meeting next week and again in July.
"I think that (the drop in Canadian shares) is probably a reaction maybe to the reality sinking in that interest rates are on the rise everywhere and that the outlook for stock markets generally will remain subdued," said Stuart Cole, the head macroeconomist at Equiti Capital.
"The ECB in a sense was the last bastion of a loose monetary policy, and now that has gone too."
The financials sector .SPTTFS slipped 0.1%, while the industrials sector .GSPTTIN fell 0.1%.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 1.3% as gold futures GCc1 fell 0.2% to $1,847.5 an ounce, while copper prices dropped on the re-imposition of some lockdown restrictions in China. GOL/MET/L
HIGHLIGHTS
The TSX posted no new 52-week highs and six new lows.
Across all Canadian issues, there were two new 52-week highs and 42 new lows, with a total volume of 24.48 million shares.
(Reporting by Amal S in Bengaluru; Editing by Aditya Soni)
((amal.s@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. | O/R Healthcare .GSPTTHC shares slipped 2.2%, with pot stocks including Canopy Growth WEED.TO, Tilray Brands TLRY.O, Aurora Cannabis ACB.TO down between 2.03% and 3.47%. By Amal S June 9 (Reuters) - Canada's resources-heavy main stock index was set to extend losses on Thursday as a slight pullback in oil prices pressured energy shares, while worries around stubborn inflation and the aggressive interest rate hikes weighed on sentiment. "I think that (the drop in Canadian shares) is probably a reaction maybe to the reality sinking in that interest rates are on the rise everywhere and that the outlook for stock markets generally will remain subdued," said Stuart Cole, the head macroeconomist at Equiti Capital. | O/R Healthcare .GSPTTHC shares slipped 2.2%, with pot stocks including Canopy Growth WEED.TO, Tilray Brands TLRY.O, Aurora Cannabis ACB.TO down between 2.03% and 3.47%. The energy sector .SPTTEN dropped 1.4% as U.S. crude CLc1 prices were down 0.7% a barrel, while Brent crude LCOc1 lost 0.4%. Earlier in the day, the European Central Bank confirmed it would end a long-running bond-buying scheme on July 1 and signaled a string of interest rate hikes. | O/R Healthcare .GSPTTHC shares slipped 2.2%, with pot stocks including Canopy Growth WEED.TO, Tilray Brands TLRY.O, Aurora Cannabis ACB.TO down between 2.03% and 3.47%. By Amal S June 9 (Reuters) - Canada's resources-heavy main stock index was set to extend losses on Thursday as a slight pullback in oil prices pressured energy shares, while worries around stubborn inflation and the aggressive interest rate hikes weighed on sentiment. "I think that (the drop in Canadian shares) is probably a reaction maybe to the reality sinking in that interest rates are on the rise everywhere and that the outlook for stock markets generally will remain subdued," said Stuart Cole, the head macroeconomist at Equiti Capital. | O/R Healthcare .GSPTTHC shares slipped 2.2%, with pot stocks including Canopy Growth WEED.TO, Tilray Brands TLRY.O, Aurora Cannabis ACB.TO down between 2.03% and 3.47%. By Amal S June 9 (Reuters) - Canada's resources-heavy main stock index was set to extend losses on Thursday as a slight pullback in oil prices pressured energy shares, while worries around stubborn inflation and the aggressive interest rate hikes weighed on sentiment. ET (13:45 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 111.58 points, or 0.54%, at 20,680.85. |
36530.0 | 2022-06-08 00:00:00 UTC | 2 Cash-Burning Businesses Investors Should Avoid | ACB | https://www.nasdaq.com/articles/2-cash-burning-businesses-investors-should-avoid | nan | nan | Inflation is a big problem this year. Products are more expensive for consumers, and businesses have to decide between whether to raise prices or eat the additional costs. Either way, it has the potential to negatively impact sales and hurt the bottom line.
For investors, it makes it more important than ever before to focus on companies that are generating positive cash flow and that have strong financials that can weather the storm. Two companies that don't fall in that category are Aurora Cannabis (NASDAQ: ACB) and ContextLogic (NASDAQ: WISH). These are two risky stocks that you probably don't want to be holding in your portfolio right now.
Image source: Getty Images.
1. Aurora Cannabis
Aurora Cannabis is a marijuana producer that's riddled with problems from top to bottom. Not only is it struggling to generate consistent sales growth, but cash flow is also a big problem. Just this month, it closed on an offering that generated gross proceeds of $172.5 million. The funds will be used for just "general corporate purposes," which essentially means anything and everything.
News of another offering for this serial diluter sent its shares tumbling to less than $2 a share. A possible reverse stock split looks inevitable for the business as there's little reason to expect that Aurora will get out of its tailspin anytime soon. The company has consistently reported negative cash from its day-to-day operating activities over the past few years:
ACB Cash from Operations (Quarterly) data by YCharts.
Lacking a catalyst to turn things around, the cannabis company is in trouble. Investors should consider keeping a safe distance away from this pot stock as dilution and underperforming quarterly results could ensure more of a decline in the future.
2. ContextLogic
ContextLogic runs e-commerce site Wish.com. The stock was popular with meme investors early last year when it hit a high of more than $32. However, today, it's struggling to stay above just $2 a share. Sales have been falling sharply as the company has been undergoing many changes, including refocusing its efforts on improving the quality of the products that are available on its website -- something many consumers have complained about in the past.
While management has said that its net promoter score (NPS) has doubled since making improvements, that hasn't resulted in strong financials for the business yet. Sales for the first three months of 2022 totaled $189 million and declined a whopping 76% year over year. And like Aurora, the company is burning through tons of cash:
WISH Cash from Operations (Quarterly) data by YCharts.
Far from its heyday, ContextLogic has fallen on some hard times, and inflation may only exacerbate the issues it is facing right now. Although the company has a strong cash and cash equivalents balance of $760 million as of March 31, if it keeps burning through cash at more than $100 million per quarter, that could not only shrink that balance but impede the company's recovery and its ability to reinvest funds back into its operations.
ContextLogic may still turn things around, but it's too risky of an investment to be holding onto right now.
10 stocks we like better than Aurora Cannabis Inc.
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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! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of June 2, 2022
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. | Two companies that don't fall in that category are Aurora Cannabis (NASDAQ: ACB) and ContextLogic (NASDAQ: WISH). The company has consistently reported negative cash from its day-to-day operating activities over the past few years: ACB Cash from Operations (Quarterly) data by YCharts. For investors, it makes it more important than ever before to focus on companies that are generating positive cash flow and that have strong financials that can weather the storm. | Two companies that don't fall in that category are Aurora Cannabis (NASDAQ: ACB) and ContextLogic (NASDAQ: WISH). The company has consistently reported negative cash from its day-to-day operating activities over the past few years: ACB Cash from Operations (Quarterly) data by YCharts. And like Aurora, the company is burning through tons of cash: WISH Cash from Operations (Quarterly) data by YCharts. | The company has consistently reported negative cash from its day-to-day operating activities over the past few years: ACB Cash from Operations (Quarterly) data by YCharts. Two companies that don't fall in that category are Aurora Cannabis (NASDAQ: ACB) and ContextLogic (NASDAQ: WISH). Although the company has a strong cash and cash equivalents balance of $760 million as of March 31, if it keeps burning through cash at more than $100 million per quarter, that could not only shrink that balance but impede the company's recovery and its ability to reinvest funds back into its operations. | Two companies that don't fall in that category are Aurora Cannabis (NASDAQ: ACB) and ContextLogic (NASDAQ: WISH). The company has consistently reported negative cash from its day-to-day operating activities over the past few years: ACB Cash from Operations (Quarterly) data by YCharts. Aurora Cannabis Aurora Cannabis is a marijuana producer that's riddled with problems from top to bottom. |
36531.0 | 2022-06-07 00:00:00 UTC | Why Aurora Cannabis Was a Hot Stock Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-was-a-hot-stock-today | nan | nan | What happened
Shares of Aurora Cannabis (NASDAQ: ACB) wafted nicely higher on the second day of the trading week. The Canadian marijuana company's shares drifted more than 5% skyward on Tuesday, on an analyst's more bullish take on its prospects.
So what
Interestingly, the latest analysis from Stifel is based largely on one habit of marijuana companies considered by many investors to be negative: a secondary share issue. Analyst W. Andrew Carter cited Aurora's latest financing effort, in which it raised gross proceeds of $173 million from a flotation of units consisting of common shares and warrants, as a key reason for his upgrade.
Image source: Getty Images.
Carter now believes that Stifel is a hold, up from his previous evaluation of sell. His new price target is 2.15 Canadian dollars ($1.71) per share. That's less than 6% above the current level of Aurora's U.S.-listed stock.
Although Carter still has concerns about Aurora's business, he wrote in his latest research note that the share dilution resulting from the units issuance is minimal, and the gain in liquidity is a plus for the company. Like many other marijuana companies (particularly those in Canada), Aurora is habitually unprofitable and frequently struggles with cash flow difficulties.
Now what
Carter is more bullish than investors were when the units flotation was announced. In the wake of that news, Aurora's stock took a 5% hit, mostly on the stock dilution concerns that the analyst believes are relatively immaterial.
The recommendation upgrade is indisputably positive for Aurora, and the resulting stock price bump is encouraging for sure. But given Aurora's historically poor fundamentals, investors will need to see a lot more from the company for them to really get excited about the 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.
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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. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) wafted nicely higher on the second day of the trading week. So what Interestingly, the latest analysis from Stifel is based largely on one habit of marijuana companies considered by many investors to be negative: a secondary share issue. Analyst W. Andrew Carter cited Aurora's latest financing effort, in which it raised gross proceeds of $173 million from a flotation of units consisting of common shares and warrants, as a key reason for his upgrade. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) wafted nicely higher on the second day of the trading week. The Canadian marijuana company's shares drifted more than 5% skyward on Tuesday, on an analyst's more bullish take on its prospects. In the wake of that news, Aurora's stock took a 5% hit, mostly on the stock dilution concerns that the analyst believes are relatively immaterial. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) wafted nicely higher on the second day of the trading week. Although Carter still has concerns about Aurora's business, he wrote in his latest research note that the share dilution resulting from the units issuance is minimal, and the gain in liquidity is a plus for the company. In the wake of that news, Aurora's stock took a 5% hit, mostly on the stock dilution concerns that the analyst believes are relatively immaterial. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) wafted nicely higher on the second day of the trading week. Now what Carter is more bullish than investors were when the units flotation was announced. In the wake of that news, Aurora's stock took a 5% hit, mostly on the stock dilution concerns that the analyst believes are relatively immaterial. |
36532.0 | 2022-06-02 00:00:00 UTC | CANADA STOCKS-Toronto index gains as miners boost | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-gains-as-miners-boost | nan | nan | By Amal S
June 2 (Reuters) - Toronto shares rose on Thursday, led by mining stocks as a weakening U.S. dollar boosted gold prices, although inflation worries continued to remain on investors' minds a day after the Bank of Canada hiked interest rates.
At 9:45 a.m. ET (1345 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 102.23 points, or 0.49%, at 20,815.95.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 2.4%. GOL/
"People are still pretty cautious. There could be a little upward momentum because we're seeing yields and U.S. dollar pulling back a little bit and those are both positive signs," said Gregory Taylor, portfolio manager at Purpose Investments.
Markets are grappling with a surge in inflation and a possible economic slowdown, although the TSX index is among the few regional equity markets still outperforming its counterparts supported by resilience in commodities.
The Bank of Canada opened the door to a more aggressive pace of tightening on Wednesday, saying it was prepared to act "more forcefully" to tame inflation, even as it went ahead with a historic second consecutive 50-basis-point rate increase.
World shares were largely steady after recent weakness as bets Saudi Arabia may boost crude production cooled down oil prices, helping balance concerns over surging inflation and monetary policy tightening. MKTS/GLOB
Among decliners, healthcare .GSPTTHC shares fell 0.5% on weakness in pot producers Canopy Growth WEED.TO and Aurora Cannabis ACB.TO, which fell more than 2% each.
HIGHLIGHTS
The TSX posted no new 52-week highs and two new lows.
Across all Canadian issues there were three new 52-week highs and six new lows, with total volume of 33.33 million shares.
(Reporting by Amal S in Bengaluru; Editing by Amy Caren Daniel)
((amal.s@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. | MKTS/GLOB Among decliners, healthcare .GSPTTHC shares fell 0.5% on weakness in pot producers Canopy Growth WEED.TO and Aurora Cannabis ACB.TO, which fell more than 2% each. By Amal S June 2 (Reuters) - Toronto shares rose on Thursday, led by mining stocks as a weakening U.S. dollar boosted gold prices, although inflation worries continued to remain on investors' minds a day after the Bank of Canada hiked interest rates. The Bank of Canada opened the door to a more aggressive pace of tightening on Wednesday, saying it was prepared to act "more forcefully" to tame inflation, even as it went ahead with a historic second consecutive 50-basis-point rate increase. | MKTS/GLOB Among decliners, healthcare .GSPTTHC shares fell 0.5% on weakness in pot producers Canopy Growth WEED.TO and Aurora Cannabis ACB.TO, which fell more than 2% each. By Amal S June 2 (Reuters) - Toronto shares rose on Thursday, led by mining stocks as a weakening U.S. dollar boosted gold prices, although inflation worries continued to remain on investors' minds a day after the Bank of Canada hiked interest rates. Markets are grappling with a surge in inflation and a possible economic slowdown, although the TSX index is among the few regional equity markets still outperforming its counterparts supported by resilience in commodities. | MKTS/GLOB Among decliners, healthcare .GSPTTHC shares fell 0.5% on weakness in pot producers Canopy Growth WEED.TO and Aurora Cannabis ACB.TO, which fell more than 2% each. By Amal S June 2 (Reuters) - Toronto shares rose on Thursday, led by mining stocks as a weakening U.S. dollar boosted gold prices, although inflation worries continued to remain on investors' minds a day after the Bank of Canada hiked interest rates. Markets are grappling with a surge in inflation and a possible economic slowdown, although the TSX index is among the few regional equity markets still outperforming its counterparts supported by resilience in commodities. | MKTS/GLOB Among decliners, healthcare .GSPTTHC shares fell 0.5% on weakness in pot producers Canopy Growth WEED.TO and Aurora Cannabis ACB.TO, which fell more than 2% each. By Amal S June 2 (Reuters) - Toronto shares rose on Thursday, led by mining stocks as a weakening U.S. dollar boosted gold prices, although inflation worries continued to remain on investors' minds a day after the Bank of Canada hiked interest rates. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 2.4%. |
36533.0 | 2022-05-30 00:00:00 UTC | CANADA STOCKS-Toronto index rises as energy shares boost | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-rises-as-energy-shares-boost | nan | nan | By Amal S
May 30 (Reuters) - Canada's main stock index rose on Monday, as gains in oil prices drove energy shares higher, with trading volumes expected to be reduced by a U.S. market holiday.
At 9:47 a.m. ET (13:47 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 94.83 points, or 0.46%, at 20,843.41.
The energy sector .SPTTEN climbed 1.1% as oil prices rose above $120 a barrel to their highest in more than two months, as traders waited to see whether a European Union meeting would reach an agreement on banning Russian oil imports.O/R
Healthcare shares .GSPTTHC rose 0.6% with pot producer Aurora Cannabis ACB.TO up 7.5%, leading gains.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 0.2% as gold prices rose as the dollar slipped, while investors have lowered their expectations of further aggressive monetary policy tightening in the United States.GOL/
The financials sector .SPTTFS gained 0.4%, and the industrials sector .GSPTTIN rose 0.5%.
"A reopening of key economic hubs in China and suggestions the U.S. Federal Reserve might slow the pace of interest rate hikes are helping to boost sentiment, at least in the short term," said Russ Mould, investment director at AJ Bell.
Markets across the globe have been affected by concerns about economic growth and aggressive interest rate hikes to tackle inflation, although resilience in resource-linked stocks helped the TSX to withstand negative sentiment.
Canada's current account surplus grew to C$5.03 billion ($3.96 billion) in the first quarter from a revised C$137 million deficit in the fourth quarter, on the largest surplus of goods since the financial crisis of 2008, Statistics Canada said.
HIGHLIGHTS
The TSX posted nine new 52-week highs and no new lows.
Across all Canadian issues there were 18 new 52-week highs and five new lows, with total volume of 10.76 million shares.
(Reporting by Amal S in Bengaluru; editing by Barbara Lewis)
((amal.s@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. | The energy sector .SPTTEN climbed 1.1% as oil prices rose above $120 a barrel to their highest in more than two months, as traders waited to see whether a European Union meeting would reach an agreement on banning Russian oil imports.O/R Healthcare shares .GSPTTHC rose 0.6% with pot producer Aurora Cannabis ACB.TO up 7.5%, leading gains. By Amal S May 30 (Reuters) - Canada's main stock index rose on Monday, as gains in oil prices drove energy shares higher, with trading volumes expected to be reduced by a U.S. market holiday. "A reopening of key economic hubs in China and suggestions the U.S. Federal Reserve might slow the pace of interest rate hikes are helping to boost sentiment, at least in the short term," said Russ Mould, investment director at AJ Bell. | The energy sector .SPTTEN climbed 1.1% as oil prices rose above $120 a barrel to their highest in more than two months, as traders waited to see whether a European Union meeting would reach an agreement on banning Russian oil imports.O/R Healthcare shares .GSPTTHC rose 0.6% with pot producer Aurora Cannabis ACB.TO up 7.5%, leading gains. By Amal S May 30 (Reuters) - Canada's main stock index rose on Monday, as gains in oil prices drove energy shares higher, with trading volumes expected to be reduced by a U.S. market holiday. Markets across the globe have been affected by concerns about economic growth and aggressive interest rate hikes to tackle inflation, although resilience in resource-linked stocks helped the TSX to withstand negative sentiment. | The energy sector .SPTTEN climbed 1.1% as oil prices rose above $120 a barrel to their highest in more than two months, as traders waited to see whether a European Union meeting would reach an agreement on banning Russian oil imports.O/R Healthcare shares .GSPTTHC rose 0.6% with pot producer Aurora Cannabis ACB.TO up 7.5%, leading gains. By Amal S May 30 (Reuters) - Canada's main stock index rose on Monday, as gains in oil prices drove energy shares higher, with trading volumes expected to be reduced by a U.S. market holiday. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 0.2% as gold prices rose as the dollar slipped, while investors have lowered their expectations of further aggressive monetary policy tightening in the United States.GOL/ The financials sector .SPTTFS gained 0.4%, and the industrials sector .GSPTTIN rose 0.5%. | The energy sector .SPTTEN climbed 1.1% as oil prices rose above $120 a barrel to their highest in more than two months, as traders waited to see whether a European Union meeting would reach an agreement on banning Russian oil imports.O/R Healthcare shares .GSPTTHC rose 0.6% with pot producer Aurora Cannabis ACB.TO up 7.5%, leading gains. By Amal S May 30 (Reuters) - Canada's main stock index rose on Monday, as gains in oil prices drove energy shares higher, with trading volumes expected to be reduced by a U.S. market holiday. Across all Canadian issues there were 18 new 52-week highs and five new lows, with total volume of 10.76 million shares. |
36534.0 | 2022-05-30 00:00:00 UTC | Sundial Growers' CEO Says There's "A Reckoning Taking Hold" in Cannabis. He's Right. | ACB | https://www.nasdaq.com/articles/sundial-growers-ceo-says-theres-a-reckoning-taking-hold-in-cannabis.-hes-right. | nan | nan | When CEOs offer insights into their industries, it behooves investors to listen. During Sundial Growers' (NASDAQ: SNDL) May 16earnings call CEO Zach George quipped that "[Sundial is] in an enviable position as we witness a reckoning taking hold in the Canadian cannabis market," and that "continued aggressive cash consumption by our peers, reduced access to capital, and waning investor risk appetite is likely to accelerate sector rationalization as the industry slowly moves toward the formation of an oligopoly."
Bold predictions like those are actionable for investors, and there's more than one reason to believe that change is actually afoot in the cannabis industry. Here's why George's comments will likely prove to be prescient.
Image source: Getty Images.
The reckoning isn't exactly new
The first thing to notice is that in the last 12 months, many cannabis stocks have fallen considerably, as shown below:
^SPX data by YCharts.
If that doesn't look like a reckoning, not much does. But declining share prices don't shed much light on why investors are souring on cannabis stocks. For that, it's necessary to consider the Federal Reserve's ongoing campaign to raise the interest rates at which companies can borrow money.
As the cost of borrowing rises, smaller growth-stage businesses -- like most cannabis companies -- become riskier as they need to grow more per borrowed dollar to justify the interest fees. So, when Sundial's CEO mentioned that investors have less desire to buy risky stocks, the rising interest rates are a big reason.
Higher borrowing costs also make the cost of borrowing so high that some enterprises can't afford it at all, which the CEO also alluded to. And that's not even getting into the difficulties many companies in the industry have with getting traditional financial institutions to lend to them due to cannabis being illegal at the federal level in the U.S.
The next piece of the reckoning is that many public marijuana businesses are running down their cash reserves at a time when large infusions of cash are harder and harder to come by.
Take a look at this chart:
ACB Cash and Equivalents (Quarterly) data by YCharts.
Of those businesses, only Curaleaf has any positive quarterly free cash flow (FCF) to speak of. In other words, a lot of players might be out of money in the near future, and that could make them ripe for acquisition -- or vulnerable to bankruptcy.
Consolidation is already occurring
Per George's forecast, as more marijuana businesses become desperate for cash to keep the lights on, they'll increasingly be forced to seek investment from, merge with, or be bought out by larger competitors. So far, the industry's most significant consolidation occurred when Tilray Brands merged with Aphria in the middle of last year to make what was, at the time, the largest single cannabis business by revenue.
Since that period, Sundial has been a prolific acquirer, as shown by its recently closed purchase of the Canadian liquor chain Alcanna, which also held a 63% equity stake in another company called Nova Cannabis.
But even the industry's less impressive contenders, like Aurora Cannabis, are on an acquisition spree. In early May, it finalized its purchase of TerraFarma for CAD$38 million in cash and stock. One takeaway from this trend is that as the larger publicly traded businesses continue to consolidate, their brand portfolios will consolidate, too. And that could easily lead to redundancy or self-competition, neither of which would be desirable.
At the core of the consolidation wave is one of the industry's most persistent bugbears: profitability. Few companies have an ironclad profit margin yet, and very few are consistently profitable at all. Given the ongoing reckoning, it's highly likely the enduringly profitable marijuana businesses are going to be the beneficiaries, whereas the unprofitable ones will be devoured or forced into niche markets or even bankruptcy.
In sum, Zach George is completely correct about where the industry is going in the next year or so. For investors, there's no single correct move to take advantage of the looming shakeout, but a good rule of thumb will be to only purchase shares of companies that are cash-rich, low in debt, profitable, and, preferably, growing revenue and earnings. Even then, it'll probably be a bit of a bumpy ride.
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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. | Take a look at this chart: ACB Cash and Equivalents (Quarterly) data by YCharts. So far, the industry's most significant consolidation occurred when Tilray Brands merged with Aphria in the middle of last year to make what was, at the time, the largest single cannabis business by revenue. Since that period, Sundial has been a prolific acquirer, as shown by its recently closed purchase of the Canadian liquor chain Alcanna, which also held a 63% equity stake in another company called Nova Cannabis. | Take a look at this chart: ACB Cash and Equivalents (Quarterly) data by YCharts. During Sundial Growers' (NASDAQ: SNDL) May 16earnings call CEO Zach George quipped that "[Sundial is] in an enviable position as we witness a reckoning taking hold in the Canadian cannabis market," and that "continued aggressive cash consumption by our peers, reduced access to capital, and waning investor risk appetite is likely to accelerate sector rationalization as the industry slowly moves toward the formation of an oligopoly." So, when Sundial's CEO mentioned that investors have less desire to buy risky stocks, the rising interest rates are a big reason. | Take a look at this chart: ACB Cash and Equivalents (Quarterly) data by YCharts. During Sundial Growers' (NASDAQ: SNDL) May 16earnings call CEO Zach George quipped that "[Sundial is] in an enviable position as we witness a reckoning taking hold in the Canadian cannabis market," and that "continued aggressive cash consumption by our peers, reduced access to capital, and waning investor risk appetite is likely to accelerate sector rationalization as the industry slowly moves toward the formation of an oligopoly." So, when Sundial's CEO mentioned that investors have less desire to buy risky stocks, the rising interest rates are a big reason. | Take a look at this chart: ACB Cash and Equivalents (Quarterly) data by YCharts. If that doesn't look like a reckoning, not much does. So, when Sundial's CEO mentioned that investors have less desire to buy risky stocks, the rising interest rates are a big reason. |
36535.0 | 2022-05-27 00:00:00 UTC | CANADA STOCKS-TSX posts biggest weekly gain since February as selling wanes | ACB | https://www.nasdaq.com/articles/canada-stocks-tsx-posts-biggest-weekly-gain-since-february-as-selling-wanes | nan | nan | By Fergal Smith
TORONTO, May 27 (Reuters) - Canada's main stock index rose on Friday to its highest level in more than three weeks and notched its second straight weekly advance, as signs of peaking inflation bolstered hopes that recent pressure on equity markets globally would ease.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 216.40 points, or 1.1%, at 20,748.58, its highest closing level since May 4.
It was the sixth straight day of gains for the index. For the week, it climbed 2.7%, its biggest advance since February.
"It's clear to me that the market bottomed last week," said Barry Schwartz, portfolio manager at Baskin Financial Services.
"The headlines may still be lousy for months to come - they may even get worse - but we've definitely had a short-term bottom."
Wall Street also rallied as U.S. data showed signs of peaking inflation and consumer resiliency, sending investors into a long holiday weekend in the United States with growing optimism that the Federal Reserve's policy tightening can avoid tipping the economy into recession.
"There is a sense that there will be a recession in some types of companies but its not pervasive," Schwartz said.
The Toronto market's technology group climbed 2.4%, while heavily-weighed financials ended 1.3% higher as National Bank of Canada NA.TO closed out a mostly strong quarter for Canadian lenders, reporting second-quarter profit that beat estimates.
Energy was up 1.7% as oil gained 0.9% to $115.14 a barrel on signs of a tightly supplied market.
Sharp declines for the shares of some cannabis producers weighed on the healthcare sector.
Aurora Cannabis ACB.TO fell 38.3% after it upsized its previously announced bought deal financing, and Canopy Growth Corp WEED.TO was down 13.6% after it reported a larger adjusted core loss for the fourth quarter.
(Reporting by Fergal Smith; additional reporting by Amal S in Bengaluru Editing by Alistair Bell)
((fergal.smith@thomsonreuters.com; +1 647 480 7446;))
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 ACB.TO fell 38.3% after it upsized its previously announced bought deal financing, and Canopy Growth Corp WEED.TO was down 13.6% after it reported a larger adjusted core loss for the fourth quarter. Wall Street also rallied as U.S. data showed signs of peaking inflation and consumer resiliency, sending investors into a long holiday weekend in the United States with growing optimism that the Federal Reserve's policy tightening can avoid tipping the economy into recession. The Toronto market's technology group climbed 2.4%, while heavily-weighed financials ended 1.3% higher as National Bank of Canada NA.TO closed out a mostly strong quarter for Canadian lenders, reporting second-quarter profit that beat estimates. | Aurora Cannabis ACB.TO fell 38.3% after it upsized its previously announced bought deal financing, and Canopy Growth Corp WEED.TO was down 13.6% after it reported a larger adjusted core loss for the fourth quarter. By Fergal Smith TORONTO, May 27 (Reuters) - Canada's main stock index rose on Friday to its highest level in more than three weeks and notched its second straight weekly advance, as signs of peaking inflation bolstered hopes that recent pressure on equity markets globally would ease. The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 216.40 points, or 1.1%, at 20,748.58, its highest closing level since May 4. | Aurora Cannabis ACB.TO fell 38.3% after it upsized its previously announced bought deal financing, and Canopy Growth Corp WEED.TO was down 13.6% after it reported a larger adjusted core loss for the fourth quarter. By Fergal Smith TORONTO, May 27 (Reuters) - Canada's main stock index rose on Friday to its highest level in more than three weeks and notched its second straight weekly advance, as signs of peaking inflation bolstered hopes that recent pressure on equity markets globally would ease. Wall Street also rallied as U.S. data showed signs of peaking inflation and consumer resiliency, sending investors into a long holiday weekend in the United States with growing optimism that the Federal Reserve's policy tightening can avoid tipping the economy into recession. | Aurora Cannabis ACB.TO fell 38.3% after it upsized its previously announced bought deal financing, and Canopy Growth Corp WEED.TO was down 13.6% after it reported a larger adjusted core loss for the fourth quarter. By Fergal Smith TORONTO, May 27 (Reuters) - Canada's main stock index rose on Friday to its highest level in more than three weeks and notched its second straight weekly advance, as signs of peaking inflation bolstered hopes that recent pressure on equity markets globally would ease. The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 216.40 points, or 1.1%, at 20,748.58, its highest closing level since May 4. |
36536.0 | 2022-05-27 00:00:00 UTC | Market Rebound? Not for These 2 Marijuana Stocks | ACB | https://www.nasdaq.com/articles/market-rebound-not-for-these-2-marijuana-stocks | nan | nan | Investors finally got the week they had hoped to see, producing a sizable rebound from last week's stock market lows. There's still plenty of uncertainty in the economy, but investors are starting to think that the Federal Reserve might not be as aggressive as feared in fighting inflation. The Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) were all up substantially on the week, including big gains on Friday.
INDEX
DAILY PERCENTAGE CHANGE
DAILY POINT CHANGE
Dow
+1.76%
+576
S&P 500
+2.47%
+100
Nasdaq
+3.33%
+390
Data source: Yahoo! Finance.
Gains were widespread across many different sectors of the market. But one area that missed out on the gains was the cannabis space, with marijuana stocks Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) weighing heavily on the industry. Let's look at what's holding marijuana stocks back and what could eventually bring a rebound.
Aurora Cannabis sells low
The worst performer among major marijuana stocks was Aurora Cannabis. The stock plunged 38% as the company had to resort to drastic measures in order to raise capital.
Image source: Getty Images.
Aurora Cannabis announced that it had boosted the size of an offering it had made to underwriters, selling 61.2 million units for $150 million. That works out to $2.45 per unit, which was already below the closing price of $2.73 per share for Aurora's stock as of Thursday's close.
However, even worse is the fact that each unit includes not only one share of stock but also a warrant to buy an additional Aurora share at any time within the next three years. The exercise price for the warrant is $3.20 per share, which means that shares would have to nearly double from Friday's closing price between now and 2025 in order to give the warrants any value. Nevertheless, the creation of 61.2 million warrants dilutes any future gains that current shareholders might have hoped to earn if the cannabis company started to recover from its recent difficulties.
With the stock now well below $2 per share, some believe that another reverse stock split might be necessary soon to keep Aurora in compliance with exchange rules. That would bode poorly for the prospects for Aurora to generate any return for its longtime shareholders.
Canopy Growth sees no growth
Elsewhere, shares of Canopy Growth were down 12%. The company reported fiscal fourth-quarter results for the period ending March 31, and investors weren't satisfied with what they saw.
Net revenue of 112 million Canadian dollars for the quarter was down 25% year over year, closing a fiscal year that saw sales fall 5%. In particular, sales of cannabis weighed heavily on the company, falling 35% for the quarter and 11% for the year. Better performance in other consumer products helped cushion the blow, but operating losses of CA$530 million for the quarter and CA$1.08 billion for the year didn't give investors much confidence.
Canopy Growth tried to emphasize its long-term strategy to build up its brand value, with strategic moves in the edibles and vaporizer areas. However, despite its calls to move more aggressively toward profitability, investors seem skeptical that Canopy can outpace peers in a highly competitive environment.
Excitement about marijuana stocks that stemmed from expectations of U.S. federal legalization has given way to pessimism, and these two leaders in the space are struggling. At this point, it'll take significant changes to return Canopy Growth and Aurora Cannabis back to full health.
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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. | But one area that missed out on the gains was the cannabis space, with marijuana stocks Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) weighing heavily on the industry. The Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) were all up substantially on the week, including big gains on Friday. Nevertheless, the creation of 61.2 million warrants dilutes any future gains that current shareholders might have hoped to earn if the cannabis company started to recover from its recent difficulties. | But one area that missed out on the gains was the cannabis space, with marijuana stocks Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) weighing heavily on the industry. Aurora Cannabis sells low The worst performer among major marijuana stocks was Aurora Cannabis. At this point, it'll take significant changes to return Canopy Growth and Aurora Cannabis back to full health. | But one area that missed out on the gains was the cannabis space, with marijuana stocks Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) weighing heavily on the industry. Aurora Cannabis sells low The worst performer among major marijuana stocks was Aurora Cannabis. See the 10 stocks *Stock Advisor returns as of April 27, 2022 Dan Caplinger has no position in any of the stocks mentioned. | But one area that missed out on the gains was the cannabis space, with marijuana stocks Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) weighing heavily on the industry. At this point, it'll take significant changes to return Canopy Growth and Aurora Cannabis back to full health. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Aurora Cannabis wasn't one of them! |
36537.0 | 2022-05-27 00:00:00 UTC | Why Aurora Cannabis' 39% Drop Is Leading the Marijuana Sector Down Friday | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-39-drop-is-leading-the-marijuana-sector-down-friday | nan | nan | What happened
Many cannabis-sector stocks are trading down Friday. But Aurora Cannabis (NASDAQ: ACB) is leading the way after it plunged as much as 41%. As of 12:24 p.m. ET, Aurora shares were still down 38.8%. At the same time, Tilray (NASDAQ: TLRY) shares were down 3.6%, and Hexo (NASDAQ: HEXO) stock was down 5.3%.
So what
The plunge in Aurora shares comes as existing shareholders react to a new round of financing that the company said will bring $150 million to the company. The funding comes from a bought deal financing agreement with underwriters for 61.2 million units at a share price of $2.45 per share.
The stock has only seen a level that low once this year, and it represented a drop of 10% from the share price when the deal was initially announced. The units also include one common share purchase warrant that will be exercisable at a price of $3.20 for a period of 36 months.
Image source: Getty Images.
Now what
Investors likely sense some amount of desperation in the company doing the deal. After all, shares were trading at nearly $6 per share at the start of 2022. The shares will be used for general corporate purposes, so there doesn't seem to be any growth investments in mind for the funds.
In fact, just over a week ago, industry follower MJBizDaily reported Aurora was closing some of its operating facilities. That includes its flagship Aurora Sky facility in Edmonton, Alberta. The company also has plans to sell its Sun greenhouse facility at an 80% markdown from what it had invested.
Today's drops in Tilray and Hexo aren't just in sympathy with Aurora. There was other news that has stocks in the sector under pressure today, too. Peer Canadian cannabis grower Canopy Growth reported its fourth-quarter and fiscal-year 2022 results this morning. Canopy also disappointed investors by missing revenue and earnings expectations.
Tilray and Hexo began working together earlier this year with an aim to benefit both companies. Tilray agreed to acquire up to $211 million of senior secured convertible notes that Hexo previously issued. The two companies planned to enter into mutually beneficial commercial agreements, including establishing a joint venture that would provide shared cultivation and processing services to both companies.
There's a noticeable difference in how Hexo raised that capital with future plans in place, compared to the recent Aurora funding plan. Investors certainly are signaling disappointment with Aurora today, and also may be signaling that they no longer believe in its future.
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 recommends HEXO 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. | But Aurora Cannabis (NASDAQ: ACB) is leading the way after it plunged as much as 41%. The stock has only seen a level that low once this year, and it represented a drop of 10% from the share price when the deal was initially announced. Peer Canadian cannabis grower Canopy Growth reported its fourth-quarter and fiscal-year 2022 results this morning. | But Aurora Cannabis (NASDAQ: ACB) is leading the way after it plunged as much as 41%. At the same time, Tilray (NASDAQ: TLRY) shares were down 3.6%, and Hexo (NASDAQ: HEXO) stock was down 5.3%. The funding comes from a bought deal financing agreement with underwriters for 61.2 million units at a share price of $2.45 per share. | But Aurora Cannabis (NASDAQ: ACB) is leading the way after it plunged as much as 41%. At the same time, Tilray (NASDAQ: TLRY) shares were down 3.6%, and Hexo (NASDAQ: HEXO) stock was down 5.3%. So what The plunge in Aurora shares comes as existing shareholders react to a new round of financing that the company said will bring $150 million to the company. | But Aurora Cannabis (NASDAQ: ACB) is leading the way after it plunged as much as 41%. ET, Aurora shares were still down 38.8%. At the same time, Tilray (NASDAQ: TLRY) shares were down 3.6%, and Hexo (NASDAQ: HEXO) stock was down 5.3%. |
36538.0 | 2022-05-27 00:00:00 UTC | CANADA STOCKS-Toronto index up as tech, cyclical stocks gain | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-up-as-tech-cyclical-stocks-gain | nan | nan | By Amal S
May 27 (Reuters) - Canada's main stock index rose on Friday, putting it on track for its best weekly performance in more than three months, aided by gains in technology and cyclical shares amid an upbeat mood in global equities.
At 9:47 a.m. ET (13:47 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 87.44 points, or 0.43%, at 20,619.62. It appeared set to gain for a sixth consecutive session, its longest winning streak since mid-March.
Sentiment in global markets remained buoyant on an optimistic earnings outlook and as the Federal Reserve minutes released earlier this week eased concerns about aggressive interest rate hikes.
"I think it has been in a better mood since the FOMC minutes on Wednesday, which have largely been interpreted as providing some hope that rates may not be tightened as aggressively as had previously been anticipated, and certainly not to the extent that the likes of Brainard were suggesting just a few weeks ago," said Stuart Cole, head macroeconomist at Equiti Capital.
Technology stocks .SPTTTK rose 1.5%, leading gains in the index with e-commerce company Shopify SHOP.TO up 2.8%, while consumer discretionary shares .GSPTTCD fell 1.12%.
Pot producer Aurora Cannabis ACB.TO fell 32.0% to the bottom of the index after it upsized its previously announced bought deal financing. Canopy Growth Corp WEED.TO shed 14.6% after it reported a larger adjusted core loss for the fourth quarter, as demand for cannabis fell from COVID-19 lockdown-induced highs.
Healthcare .GSPTTHC shares fell 5.4%, while the energy sector .SPTTEN dropped 0.2%, weighed down by weaker crude prices.O/R
The financials sector .SPTTFS gained 0.8%, with National Bank of Canada NA.TO up 2.6%, leading gains after its second-quarter profit beat estimates on lower-than-expected provisions for credit losses (PCL).
The benchmark index, up 2% so far this week, was on track to post its best weekly gain since early-February as resilience in oil prices has supported energy shares, while financial stocks have advanced on the back of upbeat bank earnings.
(Reporting by Amal S in Bengaluru; Editing by Vinay Dwivedi)
((amal.s@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. | Pot producer Aurora Cannabis ACB.TO fell 32.0% to the bottom of the index after it upsized its previously announced bought deal financing. By Amal S May 27 (Reuters) - Canada's main stock index rose on Friday, putting it on track for its best weekly performance in more than three months, aided by gains in technology and cyclical shares amid an upbeat mood in global equities. Sentiment in global markets remained buoyant on an optimistic earnings outlook and as the Federal Reserve minutes released earlier this week eased concerns about aggressive interest rate hikes. | Pot producer Aurora Cannabis ACB.TO fell 32.0% to the bottom of the index after it upsized its previously announced bought deal financing. By Amal S May 27 (Reuters) - Canada's main stock index rose on Friday, putting it on track for its best weekly performance in more than three months, aided by gains in technology and cyclical shares amid an upbeat mood in global equities. Technology stocks .SPTTTK rose 1.5%, leading gains in the index with e-commerce company Shopify SHOP.TO up 2.8%, while consumer discretionary shares .GSPTTCD fell 1.12%. | Pot producer Aurora Cannabis ACB.TO fell 32.0% to the bottom of the index after it upsized its previously announced bought deal financing. By Amal S May 27 (Reuters) - Canada's main stock index rose on Friday, putting it on track for its best weekly performance in more than three months, aided by gains in technology and cyclical shares amid an upbeat mood in global equities. Healthcare .GSPTTHC shares fell 5.4%, while the energy sector .SPTTEN dropped 0.2%, weighed down by weaker crude prices.O/R The financials sector .SPTTFS gained 0.8%, with National Bank of Canada NA.TO up 2.6%, leading gains after its second-quarter profit beat estimates on lower-than-expected provisions for credit losses (PCL). | Pot producer Aurora Cannabis ACB.TO fell 32.0% to the bottom of the index after it upsized its previously announced bought deal financing. By Amal S May 27 (Reuters) - Canada's main stock index rose on Friday, putting it on track for its best weekly performance in more than three months, aided by gains in technology and cyclical shares amid an upbeat mood in global equities. ET (13:47 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 87.44 points, or 0.43%, at 20,619.62. |
36539.0 | 2022-05-27 00:00:00 UTC | 3 Hot Marijuana Stocks That Could Easily Turn $5,000 Into $500 | ACB | https://www.nasdaq.com/articles/3-hot-marijuana-stocks-that-could-easily-turn-%245000-into-%24500 | nan | nan | As shown by the AdvisorShares Pure US Cannabis ETF's losses of more than 65% in the last 12 months alone, you can easily burn a fortune by investing it in a few of the most popular marijuana stocks. Between frequent mismatches of supply and demand and a stock market that's positively sour on high-risk growth assets like cannabis stocks, now is the time when underperforming companies are getting shaken out.
Avoiding the industry's falling stars is key to preserving your wealth if you decide to enter into the world of cannabis in the near future. Let's look at a trio of cannabis businesses that are likely to demolish an investment of $5,000.
Shopping for edibles at a marijuana dispensary. Image source: Getty Images.
1. Aurora Cannabis
Down by more than 96% in the last three years, Aurora Cannabis (NASDAQ: ACB) remains a great option for investors who like losing money. While it has many issues, perhaps the most dangerous one for shareholders is its habitual overly optimistic communication style.
For example, Aurora claims to be the Canadian cannabis company with the highest adjusted gross margin, beating the likes of giants like Tilray Brands, (NASDAQ: TLRY) among others. But, when looking at the non-adjusted gross margins of its competitors, the story is entirely different, as shown below:
ACB gross profit margin (quarterly). Data by YCharts.
Playing accounting games to make numbers look better is, unfortunately, a fact of life in the marijuana industry. And investors should probably avoid buying shares of the companies that paint a picture so distinct from the reality of their past performance. The same goes for overly rosy predictions about future performance.
Aurora's management also holds that it'll have positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the first half of fiscal year 2023. But its most recent quarterly results show that its non-adjusted EBITDA is actually a loss to the tune of $761 million rather than earnings. Accounting adjustments aside, it's very hard to see how a business with a market cap near $658 million and shrinking quarterly revenue compared to last year could ever grow its earnings by so much in such a short period. And that's one more reason to avoid Aurora.
2. Sundial Growers
Sundial Growers (NASDAQ: SNDL) is another much-watched cannabis stock that's liable to turn thousands into hundreds, though it's significantly better off than Aurora because it doesn't have any debt. Its trailing-12-month revenue grew by just over 5.9% in the last three years, reaching more than $50.7 million, which is quite slow for competing in a rapidly growing industry like cannabis. In the same period, its trailing-12-month gross profits declined by 100.6%.
The trouble with Sundial is that it doesn't have a clear strategic focus. It sells cannabis products, but it also invests in marijuana companies and owns a major Canadian liquor store chain called Alcanna. Its cannabis retail footprint of 183 stores is the biggest in Canada, and its 171 liquor stores hold the same distinction among private Canadian liquor retailers. So it's paying a tremendous amount of overhead for cultivation facilities, cannabis retail outlets, liquor retail outlets, and distribution to all of the above.
Because its acquisition of Alcanna recently closed, Sundial's foray into liquor is new, and investors don't have a full quarter of performance data yet. But unless you're willing to bet that a marijuana business can suddenly pivot into liquor without missing a beat, stay away from this stock. Its ongoing diversification efforts are quite risky, and they haven't yet borne fruit.
3. Tilray Brands
Unlike the two cannabis cultivators discussed above, Tilray might be resolving its struggles, and that's what makes it particularly tempting. With the largest market share in Canada, over $613.2 million in trailing-12-month revenue, and a thin but positive profit margin, it's almost starting to look like an appealing investment. But much like Sundial Growers, its focus is quite divided, which could be a problem that ultimately tanks its stock price.
Tilray's operations span four continents: North America, Europe, South America, and Australia. In theory, that means that it can grow cannabis in places like Portugal, where it can then export products to other E.U. countries like Germany at a favorable tariff rate. In practice, operating in so many different locales ensures that it needs to keep up with a bevy of different regulations surrounding legal cannabis products.
In turn, that means its markets are fractured. For instance, if it makes a recreational cannabis product in Canada, it can't sell that product via its subsidiary in Germany, where its only legal participation in the market is via medical marijuana. While right now Tilray is growing into its markets despite the inefficiency, as the cannabis industry matures and expands, it could end up losing out to local competitors that don't face the same constraints, and shareholders might get burned badly in the process.
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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 Down by more than 96% in the last three years, Aurora Cannabis (NASDAQ: ACB) remains a great option for investors who like losing money. But, when looking at the non-adjusted gross margins of its competitors, the story is entirely different, as shown below: ACB gross profit margin (quarterly). Accounting adjustments aside, it's very hard to see how a business with a market cap near $658 million and shrinking quarterly revenue compared to last year could ever grow its earnings by so much in such a short period. | Aurora Cannabis Down by more than 96% in the last three years, Aurora Cannabis (NASDAQ: ACB) remains a great option for investors who like losing money. But, when looking at the non-adjusted gross margins of its competitors, the story is entirely different, as shown below: ACB gross profit margin (quarterly). So it's paying a tremendous amount of overhead for cultivation facilities, cannabis retail outlets, liquor retail outlets, and distribution to all of the above. | Aurora Cannabis Down by more than 96% in the last three years, Aurora Cannabis (NASDAQ: ACB) remains a great option for investors who like losing money. But, when looking at the non-adjusted gross margins of its competitors, the story is entirely different, as shown below: ACB gross profit margin (quarterly). Between frequent mismatches of supply and demand and a stock market that's positively sour on high-risk growth assets like cannabis stocks, now is the time when underperforming companies are getting shaken out. | Aurora Cannabis Down by more than 96% in the last three years, Aurora Cannabis (NASDAQ: ACB) remains a great option for investors who like losing money. But, when looking at the non-adjusted gross margins of its competitors, the story is entirely different, as shown below: ACB gross profit margin (quarterly). Because its acquisition of Alcanna recently closed, Sundial's foray into liquor is new, and investors don't have a full quarter of performance data yet. |
36540.0 | 2022-05-27 00:00:00 UTC | Is Another Reverse Stock Split Inevitable for This Once-Promising Growth Stock? | ACB | https://www.nasdaq.com/articles/is-another-reverse-stock-split-inevitable-for-this-once-promising-growth-stock | nan | nan | Stock splits are encouraging developments because they mean that a stock has been performing well. At a high price tag, the company can justify slashing the stock price in half (or more) so that it becomes accessible to a wider pool of investors. Alphabet recently announced a mammoth 20-for-1 stock split that will take place in July.
However, not all stocks are going in that direction. Some have to take on reverse stock splits simply to stay on a major exchange like the Nasdaq or NYSE if their shares fall below $1. One company that could end up going that route (again) is marijuana producer Aurora Cannabis (NASDAQ: ACB).
Image source: Getty Images.
The stock has fallen more than 60% in the past year
Like many cannabis companies in Canada, Aurora has been struggling. Not only have profits remained elusive but even generating consistent growth is a challenge. In its most recent quarterly results, for the period up until the end of March, sales of 50.4 million Canadian dollars were down 9% year over year and 17% from just the previous quarter. The positive the company will point to is that its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was only a negative CA$12.3 million during the period -- lower than the CA$20.9 million loss it reported during the same quarter last year.
Unfortunately, that's not enough to get investors excited about the stock today. Aurora's stock losses of 61% over the course of the past 12 months are only slightly worse than the 58% drop that the Horizons Marijuana Life Sciences ETF has been on during that period. In a high-risk marijuana sector where growth is far from guaranteed these days, Aurora has given no reason for investors to treat it as an exception. Trading at less than $3 per share, the writing may be on the wall for another reverse stock split in the near future.
Aurora previously did a reverse split in 2020
In April 2020, investors learned that the popular pot stock would undergo a reverse 1:12 stock split. Under that arrangement, shareholders would effectively give the company 12 of their shares and get just one back. By reducing the share count, that drives up the stock price and allows the stock to avoid running into problems with its share price being too low to stay on an exchange.
At the time, the stock was trading at around $0.80. It looked by doing such a significant reverse split, that would buy the business plenty of time to fix its business and make it a more attractive investment. That clearly hasn't happened.
While Aurora would still need to fall another 65% from where it is now to get below $1, it's definitely a possibility. Inflation and rising labor costs do the already struggling sector no favors and could make it more difficult for Aurora and its cash-burning operations to avoid issuing more diluting share offerings in the future. Plus, increased costs could derail its goal of hitting positive adjusted EBITDA.
This is a pot stock investors should steer clear of
Aurora is a business that's undergoing many changes. Gone are its high-growth days and the days where it was battling for the top spot in the sector along with its rival, Canopy Growth. Today, it's transitioning more toward medical products and tightening up its operations (e.g., cutting costs). Unfortunately, that isn't translating into great successes right now, and rising inflation will likely mean more of an effort is required to get out of the red.
Even if it hits its goal of reaching positive adjusted EBITDA, that still may not be enough of a reason to invest in the business. A big reason I wouldn't consider it: There are simply many other, more promising cannabis stocks out there to choose from right now that have also taken a beating over the past 12 months and are much-better buys.
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 – 18 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
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet (A shares) and Alphabet (C shares). 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. | One company that could end up going that route (again) is marijuana producer Aurora Cannabis (NASDAQ: ACB). Aurora's stock losses of 61% over the course of the past 12 months are only slightly worse than the 58% drop that the Horizons Marijuana Life Sciences ETF has been on during that period. Inflation and rising labor costs do the already struggling sector no favors and could make it more difficult for Aurora and its cash-burning operations to avoid issuing more diluting share offerings in the future. | One company that could end up going that route (again) is marijuana producer Aurora Cannabis (NASDAQ: ACB). Some have to take on reverse stock splits simply to stay on a major exchange like the Nasdaq or NYSE if their shares fall below $1. The stock has fallen more than 60% in the past year Like many cannabis companies in Canada, Aurora has been struggling. | One company that could end up going that route (again) is marijuana producer Aurora Cannabis (NASDAQ: ACB). Stock splits are encouraging developments because they mean that a stock has been performing well. Aurora previously did a reverse split in 2020 In April 2020, investors learned that the popular pot stock would undergo a reverse 1:12 stock split. | One company that could end up going that route (again) is marijuana producer Aurora Cannabis (NASDAQ: ACB). The stock has fallen more than 60% in the past year Like many cannabis companies in Canada, Aurora has been struggling. Trading at less than $3 per share, the writing may be on the wall for another reverse stock split in the near future. |
36541.0 | 2022-05-25 00:00:00 UTC | Why Pot Stocks Like Sundial Growers and Curaleaf Were Buzzing Today | ACB | https://www.nasdaq.com/articles/why-pot-stocks-like-sundial-growers-and-curaleaf-were-buzzing-today | nan | nan | What happened
A great many titles in the sector wafted notably higher in share price on Wednesday. This was due largely to yet another U.S. state opting for recreational legalization, and a nearby state reporting its first month of such sales.
Curaleaf (OTC: CURLF), for example, edged up by 0.8%, while even beleaguered Canadian pot companies rose in sympathy -- Sundial Growers (NASDAQ: SNDL) rose 2%, Aurora Cannabis (NASDAQ: ACB) popped by over 4%, and Canopy Growth (NASDAQ: CGC) blasted nearly 6% higher.
So what
With the stroke of a pen, Governor Dan McKee on Wednesday made Rhode Island the 19th state in the U.S. to legalize recreational marijuana. McKee, a vocal advocate for such reform, wasted no time in signing the state's legalization bill into law -- it was passed to him Tuesday after overwhelmingly passing in both houses of the legislature.
Image source: Getty Images.
As with other states that have flipped the recreational switch, it will take at least several months to set up a market for recreational pot in the "Ocean State." For now, though, adults at least 21 years of age will be permitted to possess up to one ounce of cannabis and grow at most six plants for personal use.
Meanwhile, three states away a recent recreational legalizer, New Jersey, released figures for its first month of permitted sales (from the official April 21 start date). All told, pot purveyors took in $24 million worth of sales for the period.
Now what
It's not that Rhode Island on its own will be any kind of game-changer for legalized recreational weed; it's one of the least-populated U.S. states, with barely over 1 million residents. There's certainly some limited room for expansion for multistate operators (MSOs) -- Curaleaf, headquartered in neighboring Massachusetts, is an obvious candidate -- but this won't make or break any big cannabis company's business.
Rather, it's an encouraging sign that legalization continues to enjoy broad popular and political support. This bodes very well for the future of the marijuana industry as a whole.
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 – 18 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. | Curaleaf (OTC: CURLF), for example, edged up by 0.8%, while even beleaguered Canadian pot companies rose in sympathy -- Sundial Growers (NASDAQ: SNDL) rose 2%, Aurora Cannabis (NASDAQ: ACB) popped by over 4%, and Canopy Growth (NASDAQ: CGC) blasted nearly 6% higher. Meanwhile, three states away a recent recreational legalizer, New Jersey, released figures for its first month of permitted sales (from the official April 21 start date). There's certainly some limited room for expansion for multistate operators (MSOs) -- Curaleaf, headquartered in neighboring Massachusetts, is an obvious candidate -- but this won't make or break any big cannabis company's business. | Curaleaf (OTC: CURLF), for example, edged up by 0.8%, while even beleaguered Canadian pot companies rose in sympathy -- Sundial Growers (NASDAQ: SNDL) rose 2%, Aurora Cannabis (NASDAQ: ACB) popped by over 4%, and Canopy Growth (NASDAQ: CGC) blasted nearly 6% higher. So what With the stroke of a pen, Governor Dan McKee on Wednesday made Rhode Island the 19th state in the U.S. to legalize recreational marijuana. Cannabis legalization is sweeping over North America – 18 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | Curaleaf (OTC: CURLF), for example, edged up by 0.8%, while even beleaguered Canadian pot companies rose in sympathy -- Sundial Growers (NASDAQ: SNDL) rose 2%, Aurora Cannabis (NASDAQ: ACB) popped by over 4%, and Canopy Growth (NASDAQ: CGC) blasted nearly 6% higher. 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 – 18 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | Curaleaf (OTC: CURLF), for example, edged up by 0.8%, while even beleaguered Canadian pot companies rose in sympathy -- Sundial Growers (NASDAQ: SNDL) rose 2%, Aurora Cannabis (NASDAQ: ACB) popped by over 4%, and Canopy Growth (NASDAQ: CGC) blasted nearly 6% higher. Now what It's not that Rhode Island on its own will be any kind of game-changer for legalized recreational weed; it's one of the least-populated U.S. states, with barely over 1 million residents. 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. |
36542.0 | 2022-05-25 00:00:00 UTC | CANADA STOCKS-Toronto index extends gains on energy boost | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-extends-gains-on-energy-boost | nan | nan | By Amal S
May 25 (Reuters) - A rally in energy and cannabis firms put Canada's main stock index on course for its fourth straight session of gains on Wednesday, even as the wider sentiment remained cautious ahead of minutes from the U.S. Federal Reserve's latest meeting.
At 9:45 a.m. ET (13:45 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 102.71 points, or 0.51%, at 20,388.91.
The energy sector .SPTTEN rose 1.2%, riding on a jump in oil prices due to tight supplies and the prospect of rising demand from the summer driving season in the United States.O/R
Healthcare stocks .GSPTTHC advanced 1.2%, with pot producers Canopy Growth Corp WEED.TO, Tilray Brands Inc TLRY.O, Aurora Cannabis Inc ACB.TO all up between 1.5% and 2.48%.
The financials sector .SPTTFS gained 0.7%, as Bank of Nova Scotia BNS.TO and Bank of Montreal BMO.TO kicked off second-quarter earnings for the sector with better-than-expected profits.
Bank of Nova Scotia rose 3.1%, while Bank of Montreal was down 0.4%.
"We have had a little bit of a positive surprise. There was some concern with the banks, whether they would be hurt by the weakness in the Canadian consumer, but that does not seem to be the case as of yet," said Gregory Taylor, portfolio manager at Purpose Investments.
Investor focus will be on the Fed minutes, which could offer hints on how aggressively the central bank will raise interest rates to tackle unruly inflation.
While worries about monetary policy tightening have weighed on equities this year, the benchmark Canadian index has fared better than peers thanks to its heavy exposure to rising commodity prices. The index is down nearly 4% so far in 2022.
On Wednesday, the materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 0.3% due to weakness in gold and industrial metal prices. GOL/] MET/L
(Reporting by Amal S in Bengaluru; Editing by Aditya Soni)
((amal.s@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. | The energy sector .SPTTEN rose 1.2%, riding on a jump in oil prices due to tight supplies and the prospect of rising demand from the summer driving season in the United States.O/R Healthcare stocks .GSPTTHC advanced 1.2%, with pot producers Canopy Growth Corp WEED.TO, Tilray Brands Inc TLRY.O, Aurora Cannabis Inc ACB.TO all up between 1.5% and 2.48%. By Amal S May 25 (Reuters) - A rally in energy and cannabis firms put Canada's main stock index on course for its fourth straight session of gains on Wednesday, even as the wider sentiment remained cautious ahead of minutes from the U.S. Federal Reserve's latest meeting. While worries about monetary policy tightening have weighed on equities this year, the benchmark Canadian index has fared better than peers thanks to its heavy exposure to rising commodity prices. | The energy sector .SPTTEN rose 1.2%, riding on a jump in oil prices due to tight supplies and the prospect of rising demand from the summer driving season in the United States.O/R Healthcare stocks .GSPTTHC advanced 1.2%, with pot producers Canopy Growth Corp WEED.TO, Tilray Brands Inc TLRY.O, Aurora Cannabis Inc ACB.TO all up between 1.5% and 2.48%. The financials sector .SPTTFS gained 0.7%, as Bank of Nova Scotia BNS.TO and Bank of Montreal BMO.TO kicked off second-quarter earnings for the sector with better-than-expected profits. Bank of Nova Scotia rose 3.1%, while Bank of Montreal was down 0.4%. | The energy sector .SPTTEN rose 1.2%, riding on a jump in oil prices due to tight supplies and the prospect of rising demand from the summer driving season in the United States.O/R Healthcare stocks .GSPTTHC advanced 1.2%, with pot producers Canopy Growth Corp WEED.TO, Tilray Brands Inc TLRY.O, Aurora Cannabis Inc ACB.TO all up between 1.5% and 2.48%. By Amal S May 25 (Reuters) - A rally in energy and cannabis firms put Canada's main stock index on course for its fourth straight session of gains on Wednesday, even as the wider sentiment remained cautious ahead of minutes from the U.S. Federal Reserve's latest meeting. The financials sector .SPTTFS gained 0.7%, as Bank of Nova Scotia BNS.TO and Bank of Montreal BMO.TO kicked off second-quarter earnings for the sector with better-than-expected profits. | The energy sector .SPTTEN rose 1.2%, riding on a jump in oil prices due to tight supplies and the prospect of rising demand from the summer driving season in the United States.O/R Healthcare stocks .GSPTTHC advanced 1.2%, with pot producers Canopy Growth Corp WEED.TO, Tilray Brands Inc TLRY.O, Aurora Cannabis Inc ACB.TO all up between 1.5% and 2.48%. The financials sector .SPTTFS gained 0.7%, as Bank of Nova Scotia BNS.TO and Bank of Montreal BMO.TO kicked off second-quarter earnings for the sector with better-than-expected profits. The index is down nearly 4% so far in 2022. |
36543.0 | 2022-05-25 00:00:00 UTC | Is Sundial Growers Planning Another Acquisition? | ACB | https://www.nasdaq.com/articles/is-sundial-growers-planning-another-acquisition | nan | nan | The cannabis industry is ripe for more mergers and acquisitions to take place. Valuations are low and there's plenty of competition, giving businesses lots of incentives to try to acquire their way to more market share. One company that has been aggressive of late in using acquisitions to strengthen its financials is pot producer Sundial Growers (NASDAQ: SNDL).
Sundial closed on a deal with alcohol retailer Alcanna just a few months ago. And management has made it clear that it likely won't be the last acquisition that the cannabis company takes on.
Image source: Getty Images.
Another acquisition coming soon?
On March 31, Sundial announced the closing of its acquisition of Alcanna. The deal will not only give the company a presence in liquor retail, but it will also benefit from the growth in pot retailer Nova Cannabis, which is a majority-owned subsidiary of Alcanna's. It complements a deal that Sundial closed on last year to buy Inner Spirit, which at the time already had more than 100 pot shops across Canada.
But there's no indication that Sundial is done. On its latest earnings call, CEO Zach George said: "Don't think that the Alcanna transaction is necessarily the last acquisition that Sundial engages in." Earlier, George noted that potential acquirors should "welcome" a decline in stock prices. Although this doesn't mean a transaction is imminent, it does suggest that the CEO is looking at declining valuations and potentially eyeing some potential targets.
Sundial is plump with cash
A big reason why Sundial can afford to look at acquisition is that as of the end of March, the company reported having $1 billion Canadian dollars in cash, securities, and investments. At the same time, it also has no debt on its books. The only encumbrance on the business would be its need to fund day-to-day operating activities. And for the three-month period ending March 31, Sundial burned through just CA$26 million. That would put it at a run rate of a little more than CA$100 million. The one caveat is how that number might change once it includes Alcanna and as Sundial continues to integrate and grow the new businesses it has acquired.
But the company doesn't need a full CA$1 billion to make a big investment. Some of the larger players in the cannabis industry trade at modest valuations; OrganiGram Holdings has a market cap of less than CA$500 million, while Aurora Cannabis is at around CA$850 million. And a potential deal wouldn't have to be funded primarily with cash. Sundial's acquisition of Alcanna was a combination of cash and stock.
Would another acquisition make Sundial a better buy?
Acquisitions have diversified Sundial in a big way. The company now has pot shops in its portfolio, and it has a liquor business. These are things that weren't there a few years ago. Sundial has gotten more diverse, and its operations are certainly bigger.
However, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) falling into the negative last quarter (the company reported positive adjusted EBITDA of CA$3.3 million in the prior-year period), it's debatable just how much better a position Sundial is in with these acquisitions.
The short answer is that it's too early to tell. And that's why it would be equally difficult to predict if the company will be in better shape after another acquisition. It's not clear if the company would expand on its retail businesses or acquire an entirely different one altogether. That uncertainty, combined with Sundial's penchant for dilution, are sufficient enough reasons to avoid the stock right now.
Year to date, the stock is down 30%, which is slightly better than the 35% decline the Horizons Marijuana Life Sciences ETF has been on. But if Sundial can't show investors that its acquisitions are paying off in a big way, there could be more of a drop in the share price before the year is over.
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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. | On its latest earnings call, CEO Zach George said: "Don't think that the Alcanna transaction is necessarily the last acquisition that Sundial engages in." But if Sundial can't show investors that its acquisitions are paying off in a big way, there could be more of a drop in the share price before the year is over. 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. | Sundial is plump with cash A big reason why Sundial can afford to look at acquisition is that as of the end of March, the company reported having $1 billion Canadian dollars in cash, securities, and investments. But the company doesn't need a full CA$1 billion to make a big investment. However, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) falling into the negative last quarter (the company reported positive adjusted EBITDA of CA$3.3 million in the prior-year period), it's debatable just how much better a position Sundial is in with these acquisitions. | Sundial is plump with cash A big reason why Sundial can afford to look at acquisition is that as of the end of March, the company reported having $1 billion Canadian dollars in cash, securities, and investments. However, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) falling into the negative last quarter (the company reported positive adjusted EBITDA of CA$3.3 million in the prior-year period), it's debatable just how much better a position Sundial is in with these acquisitions. But if Sundial can't show investors that its acquisitions are paying off in a big way, there could be more of a drop in the share price before the year is over. | It complements a deal that Sundial closed on last year to buy Inner Spirit, which at the time already had more than 100 pot shops across Canada. Sundial's acquisition of Alcanna was a combination of cash and stock. The company now has pot shops in its portfolio, and it has a liquor business. |
36544.0 | 2022-05-20 00:00:00 UTC | 5 Robinhood Stocks You Can Buy For Under $5 | ACB | https://www.nasdaq.com/articles/5-robinhood-stocks-you-can-buy-for-under-%245 | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
If you want to find stocks with heavy trading volume and are trading for less than $5, then this list of Robinhood stocks is for you.
Sundial Growers (SNDL): This is the poster child for the bad things that can happen to a meme stock.
Aurora Cannabis (ACB): Aurora has lost 97% of its value since 2019.
Nokia Oyj (NOK): The IT company may not be a penny stock for long.
OrganiGram (OGI): OrganiGram is the No. 3 licensed producer of cannabis products in Canada.
FuelCell Energy (FCEL): Fuel cells are considered much more efficient than gasoline engines.
Source: salarko/Shutterstock
Robinhood (NASDAQ:HOOD) changed the way millions of people invest. So much so that there’s a special class of stocks we refer to as Robinhood stocks.
Robinhood stocks are those that are the most commonly traded on the free trading platform. Robinhood publicizes its list of most popular stocks, as determined by the trading volume from its massive consumer base.
What makes Robinhood stocks stand out is that they are heavily weighted toward meme plays. You won’t see Cathie Wood or Peter Thiel trade on Robinhood. Instead, it’s retail investors who flocked to the platform because they were drawn to the simple functionality and the allure of no-fee trading.
7 Dividend Stocks to Boost Your Retirement Savings
Currently, Robinhood boasts more than 15.9 million monthly active users and 22.8 million funded accounts. So there’s a lot going on with Robinhood on a daily basis.
Here are five very cheap stocks – all valued at less than $5 per share – that you can buy on Robinhood these days.
SNDL Sundial Growers $0.44
ACB Aurora Cannabis $3.04
NOK Nokia Oyj $4.80
OGI OrganiGram Holdings $1.25
FCEL FuelCell Energy $3.72
Sundial Growers (SNDL)
Source: Shutterstock
Sundial Growers (NASDAQ:SNDL) is a poster child for the bad things that can happen to a meme stock.
The Canadian cannabis company went public in July 2019 and traded for more than $11 per share. People had high hopes for SNDL stock because of expectations that Washington would legalize recreational marijuana use on a national scale in the U.S.
That hasn’t happened, as the world has been focused on other things – the economy, the election, a little thing called Covid-19 – I don’t think that anyone’s had the bandwidth to push marijuana legalization through Congress.
Earnings for the company’s fourth quarter included 63% year-over-year revenue growth. And the gross margin improved to nearly breakeven. Sundial says it plans to be free cash flow positive by the end of this year.
That would be a massive achievement. If they’re successful it’s going to take a lot to make Sundial anything more than a penny stock.
Aurora Cannabis (ACB)
Source: Shutterstock
Remember, meme plays are huge for Robinhood stocks, particularly when they’re priced at less than $5. So another marijuana company, Aurora Cannabis (NASDAQ:ACB) is next on the list.
Like Sundial, Aurora has lost a lot of steam over the last few years, but the losses here are a lot more painful. ACB stock was at $115 per share as recently as March 2019. Since then it’s lost more than 97% of its value.
But there are some ACB bulls out there, like my colleague Steve Booyens. He calls Aurora Cannabis “one of the most overlooked assets on the market” and a “best-in-class” marijuana stock.
7 Undervalued Stocks to Buy Before Investors Catch On
Booyens notes that with 53%, Aurora has the best gross profit margins in the industry. It also is growing quickly in international markets like Israel, Germany, France, Poland and the United Kingdom.
Earnings for the fiscal third quarter ending March 31 included total cannabis net revenue of $50.4 million, which was down 17% from a year ago. The adjusted EBITDA loss of $12.3 million was an improvement from the loss of $20.9 million in the same quarter the year before.
Nokia Oyj (NOK)
Source: rafapress / Shutterstock.com
Shares of the telecommunications and information technology company Nokia Oyj (NYSE:NOK) are down more than 20% so far this year, putting it just below the $5 cutoff for this list of Robinhood stocks valued at less than $5.
But will it remain a penny stock?
NOK stock bulls say no, and the company’s earnings report may have something to say about that.
First-quarter earnings came in at $6 billion in revenue, beating analysts’ estimates of $5.92 billion. Earnings per share of 8 cents also topped predictions for EPS of 7 cents.
Nokia said it had $237.9 million in net income. “Overall, Q1 was a strong start for the year in terms of net sales and profitability,” CEO Pekka Lundmark said.
Analysts at AlphaValue upgraded NOK stock from “add” to “buy” following the earnings report.
OrganiGram Holdings (OGI)
Source: Hudozhnica_Ananas / Shutterstock
Yes, it’s another marijuana stock. Canada-based OrganiGram Holdings (NASDAQ:OGI) traces its roots back to 2010.
Like others on this list, OrganiGram is in a downward spiral, off nearly 30% so far this year. Since May 2019, OGI stock has lost nearly 90% of its value.
OrganiGram started off strictly as a medical marijuana company, but it has expanded into recreational use now that Canada legalized cannabis.
Gross sales for the quarter ending Feb. 28 were $43.9 million CAD, up from $19.3 million CAD in the same quarter a year ago. Net revenue was $31.8 million CAD, which was an increase of 117% year-over-year.
OrganiGram is the No. 3 licensed producer of cannabis products in Canada, where it holds a market share of 8.2%.
FuelCell Energy (FCEL)
Source: Kaca Skokanova/Shutterstock
Alternative power is a popular play in the meme stock world, so it’s really no surprise that FuelCell Energy (NASDAQ:FCEL) makes the list of most popular Robinhood stocks.
The company designs, manufactures, operates and services fuel cell power plants powered by hydrogen, which is classified as an alternative vehicle fuel. The U.S. Energy Information Administration (EIA) states that a fuel cell may be “two to three times more efficient than an internal combustion engine running on gasoline.”
BlackRock (NYSE:BLK) recently disclosed that it purchased 5.3 million shares of FCEL, increasing its position by 16%. It now owns 37.9 million shares.
FCEL stock has jumped in and out of penny stock territory so far this year and trades down about 36% in 2022.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Patrick Sanders did not have (either directly or indirectly) any other 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.
The post 5 Robinhood Stocks You Can Buy For Under $5 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. | Aurora Cannabis (ACB): Aurora has lost 97% of its value since 2019. SNDL Sundial Growers $0.44 ACB Aurora Cannabis $3.04 NOK Nokia Oyj $4.80 OGI OrganiGram Holdings $1.25 FCEL FuelCell Energy $3.72 Sundial Growers (SNDL) Source: Shutterstock Sundial Growers (NASDAQ:SNDL) is a poster child for the bad things that can happen to a meme stock. Aurora Cannabis (ACB) Source: Shutterstock Remember, meme plays are huge for Robinhood stocks, particularly when they’re priced at less than $5. | SNDL Sundial Growers $0.44 ACB Aurora Cannabis $3.04 NOK Nokia Oyj $4.80 OGI OrganiGram Holdings $1.25 FCEL FuelCell Energy $3.72 Sundial Growers (SNDL) Source: Shutterstock Sundial Growers (NASDAQ:SNDL) is a poster child for the bad things that can happen to a meme stock. Aurora Cannabis (ACB): Aurora has lost 97% of its value since 2019. Aurora Cannabis (ACB) Source: Shutterstock Remember, meme plays are huge for Robinhood stocks, particularly when they’re priced at less than $5. | SNDL Sundial Growers $0.44 ACB Aurora Cannabis $3.04 NOK Nokia Oyj $4.80 OGI OrganiGram Holdings $1.25 FCEL FuelCell Energy $3.72 Sundial Growers (SNDL) Source: Shutterstock Sundial Growers (NASDAQ:SNDL) is a poster child for the bad things that can happen to a meme stock. Aurora Cannabis (ACB): Aurora has lost 97% of its value since 2019. Aurora Cannabis (ACB) Source: Shutterstock Remember, meme plays are huge for Robinhood stocks, particularly when they’re priced at less than $5. | SNDL Sundial Growers $0.44 ACB Aurora Cannabis $3.04 NOK Nokia Oyj $4.80 OGI OrganiGram Holdings $1.25 FCEL FuelCell Energy $3.72 Sundial Growers (SNDL) Source: Shutterstock Sundial Growers (NASDAQ:SNDL) is a poster child for the bad things that can happen to a meme stock. So another marijuana company, Aurora Cannabis (NASDAQ:ACB) is next on the list. Aurora Cannabis (ACB): Aurora has lost 97% of its value since 2019. |
36545.0 | 2022-05-19 00:00:00 UTC | Why Aurora Cannabis Stock Is Still Worth Buying | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-stock-is-still-worth-buying | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Aurora Cannabis (ACB) burned investors on paper with May’s earnings results
Cost-cutting, international business and ACB stock price hold promise for investors
A bearish unwind and technical-based rally makes ACB a speculative buy
Source: Ralf Liebhold / Shutterstock.com
Wall Street is getting smoked this week. But pot producer Aurora Cannabis (NASDAQ:ACB) is proving that in a market made up of stocks, there’s always a bull market somewhere. Moreover, it’s one that could still be worth buying into with ACB stock.
The major averages are seeing a rally attempt off year-to-date corrective lows being firmly challenged. For its part the S&P 500 is off 2.65% for the period after having come within 1% of last week’s bottoming hammer candlestick low. But cannabis stock ACB is up nearly 8.50% into Thursday’s session.
So, what gives? Broader worries of retail-driven inflation and hawkish Fed speak appears to have been trumped in ACB stock by news of Aurora receiving certification for a medical grade weed production facility in Germany and assisting the company with a German medical cannabis contract awarded in 2019.
Will the bullishly relaxed behavior continue? Let’s dig into other pros and cons of owning ACB stock and strategies which can allow investors to be more calculated risk-takers.
ACB Aurora Cannabis $3.0350
Not So “Amazing, Eh” Q3 for Canada’s Aurora Cannabis
A past acquisition and grow strategy to be the pot market’s largest producer and weaker consumers craving value cannabis products over higher-margin pot derivatives negatively impacted ACB shareholders as the Edmonton outfit’s Q3 results revealed this past week.
7 Undervalued Stocks to Buy Before Investors Catch On
ACB announced an adjusted loss of CA$.85 per share and well above street estimates of a loss of 21 cents. Moreover, its diluted loss amounted to red ink of around CA$1.0 billion on the back of massive goodwill charges tied to a misplaced growth strategy or as Aurora officials laid out, write-offs on property, plants and equipment needed to create a “leaner, more agile organization.”
At the same time, revenues of CA$55.16 million fell around 9% year-over-year and undercut analyst views of CA$66.92 million. Amid increased retail competition in Canada and driving the weak result, adult-use cannabis sales shrank 53% for the third quarter compared to the prior year’s third quarter.
Lastly, Aurora burned through reserves with negative free cash flow of about CA$45 million. It countered the outflow by raising CA$139 million during the March quarter and further reducing shareholder value with dilution that’s soared from just over one million shares to nearly 225 million since 2014.
“Das Ist Gudt”, i.e. The Pros For ACB Stock
Source: Charts by TradingView
The good news? In fact, there was some of that too in ACB stock’s earnings announcement. Aurora did announce its successfully reducing costs which should help turn the company profitable on an adjusted EBITDA basis by next year.
Also, adjusted gross margins during the third quarter grew to 54% versus last year’s third quarter figure of 44%. And while Aurora’s Canadian retail business took a hit, ACB’s international medical business was up 55% year-over-year driven by growth in key markets such as European power Germany and a handful of other countries.
Then there’s the more positive aspect of Aurora’s capital raising. At the end of the quarter the company noted it has around $525 million in cash on hand to focus on higher margin, premium cannabis products, overseas expansion and help support organic growth and opportunistic M&A activity.
The long-term price chart in ACB stock is also revealing conditions which bullish investors can salivate over.
Shares have confirmed a lifetime double bottom pattern roughly seven years in-the-making after ACB stock traded above last week’s hammer candlestick. Coupled with a supportive-looking stochastics setup, bearish street sentiment and decent short interest, in plain English, the technical situation “is good” for contrarian-minded buyers.
Trading Long Exposure in ACB Stock
Today and if it wasn’t altogether clear, ACB stock has its share of pros and cons. And if investors do see the cannabis producer as a buy, it doesn’t deserve to be a core holding. In no shape or form is owning Aurora similar to buying ground floor opportunities in Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA) or other great growth stories of the past couple decades. Sorry.
That all said, ACB stock buyers have an entry point where the reward looks to outweigh the risk by a minimum of around 3-to-1. That’s based on purchasing shares near $3.05, booking profits near Fibonacci zone resistance centered around $5.00, if ACB is able to rally, and likewise, taking a loss if the stock falters and takes out the hammer low.
Alternatively, investors willing to accept that sort of risk may want to consider the pricing on an intermediate or longer-term and slightly out-of-the-money $4.00 or even $5.00 call. With this type of strategy it’s possible to increase upside exposure and further limit downside losses with a larger allocation of bullish contracts at a reduced dollar cost to owning ACB shares.
On the date of publication, Chris Tyler 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.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
The post Why Aurora Cannabis Stock Is Still Worth Buying 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. | With this type of strategy it’s possible to increase upside exposure and further limit downside losses with a larger allocation of bullish contracts at a reduced dollar cost to owning ACB shares. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (ACB) burned investors on paper with May’s earnings results Cost-cutting, international business and ACB stock price hold promise for investors A bearish unwind and technical-based rally makes ACB a speculative buy Source: Ralf Liebhold / Shutterstock.com Wall Street is getting smoked this week. But pot producer Aurora Cannabis (NASDAQ:ACB) is proving that in a market made up of stocks, there’s always a bull market somewhere. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (ACB) burned investors on paper with May’s earnings results Cost-cutting, international business and ACB stock price hold promise for investors A bearish unwind and technical-based rally makes ACB a speculative buy Source: Ralf Liebhold / Shutterstock.com Wall Street is getting smoked this week. But pot producer Aurora Cannabis (NASDAQ:ACB) is proving that in a market made up of stocks, there’s always a bull market somewhere. 7 Undervalued Stocks to Buy Before Investors Catch On ACB announced an adjusted loss of CA$.85 per share and well above street estimates of a loss of 21 cents. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (ACB) burned investors on paper with May’s earnings results Cost-cutting, international business and ACB stock price hold promise for investors A bearish unwind and technical-based rally makes ACB a speculative buy Source: Ralf Liebhold / Shutterstock.com Wall Street is getting smoked this week. ACB Aurora Cannabis $3.0350 Not So “Amazing, Eh” Q3 for Canada’s Aurora Cannabis A past acquisition and grow strategy to be the pot market’s largest producer and weaker consumers craving value cannabis products over higher-margin pot derivatives negatively impacted ACB shareholders as the Edmonton outfit’s Q3 results revealed this past week. Trading Long Exposure in ACB Stock Today and if it wasn’t altogether clear, ACB stock has its share of pros and cons. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (ACB) burned investors on paper with May’s earnings results Cost-cutting, international business and ACB stock price hold promise for investors A bearish unwind and technical-based rally makes ACB a speculative buy Source: Ralf Liebhold / Shutterstock.com Wall Street is getting smoked this week. 7 Undervalued Stocks to Buy Before Investors Catch On ACB announced an adjusted loss of CA$.85 per share and well above street estimates of a loss of 21 cents. The long-term price chart in ACB stock is also revealing conditions which bullish investors can salivate over. |
36546.0 | 2022-05-18 00:00:00 UTC | These 3 Former High-Flying Stocks Can Soar Up to 439%, According to Wall Street | ACB | https://www.nasdaq.com/articles/these-3-former-high-flying-stocks-can-soar-up-to-439-according-to-wall-street | nan | nan | No matter your level of experience investing money on Wall Street, it's been a rough year. Both the Dow Jones Industrial Average and widely followed S&P 500 have pushed into correction territory (i.e., down at least 10%). Meanwhile, the technology-driven Nasdaq Composite declined close to 30% from its November all-time high, firmly placing it in a bear market.
Although big market declines can tug at investors' heartstrings, history has shown time and again that putting your money to work during these significant pullbacks is a good idea. This is why Wall Street analysts typically have a bullish outlook on many of the companies they cover.
But not all analyst price targets are created equally. According to the 12-month price targets of select Wall Street analysts, three former high-flying stocks could soar as much as 439%!
Image source: Getty Images.
Aurora Cannabis: Implied upside of 77%
The first former highflier Wall Street believes offers significant upside potential is Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB). Based on the $6.50 Canadian ($5.04 U.S.) target from John Zamparo at CIBC, Aurora offers a hearty 77% upside from where it ended this past week.
Back in November, when CIBC had a CA$9.25 target on Aurora, Zamparo pointed to the company's international medical cannabis opportunity, as well as its cost-cutting potential, as reasons to be positive. Zamparo believed then that Aurora's managed expensing could eventually back the company into the profit column.
Unfortunately for Zamparo and Aurora Cannabis' shareholders, this previously high-flying stock has been a disaster -- and will likely remain one for the foreseeable future.
To be fair, the entire Canadian pot industry was derailed by federal and provincial regulators who dragged their feet on issuing cultivation and retail licenses. It also hasn't helped that consumers have flocked to value cannabis products, as opposed to the higher-margin derivatives licensed producers were counting on to drive their business.
But Aurora made plenty of missteps of its own, such as opening and acquiring far more cultivation space than it would ever need. At one point, the company had 15 production facilities that, if fully operational, would have yielded well over 600,000 kilos of cannabis a year. Virtually all of the company's acquisitions have resulted in significant goodwill impairment or recognition.
But even more worrisome is the fact that Aurora Cannabis continues to burn cash through its operations. Aurora's only meaningful way to increase its cash on hand has been to sell its common stock. Since mid-2014, Aurora's outstanding share count has ballooned from approximately 1.3 million shares to 224.3 million shares, as of the end of March. This persistent dilution makes Aurora Cannabis a marijuana stock that investors should continue to avoid like the plague.
Image source: Getty Images.
Vaxart: Implied upside of 439%
If you want truly jaw-dropping upside potential, clinical-stage biotech stock Vaxart (NASDAQ: VXRT) may be the one to deliver it. According to Piper Sandler analyst Yasmeen Rahimi, Vaxart could surge to $18, which represents a more than quintupling of where shares closed this past week.
Rahimi's optimism is based on Vaxart's proprietary drug-development technology, Vector-Adjuvant-Antigen Standardized Technology, or VAAST. VAAST is designed to develop therapies that produce a systemic and mucosal response. The benefit of this dual response is that VAAST could be more effective in combating airborne viruses. With success in previous early stage trials, Rahimi believes VAAST somewhat de-risks the company's drug-development platform.
However, the bulk of the excitement surrounding Vaxart has to do with its development of an oral COVID-19 vaccine. An oral vaccine would change the vaccine distribution and administration landscape.
But there are big questions as to whether an oral treatment is going to be more effective than a traditional shot in the arm. Last year, Vaxart reported mixed results for a clinical study involving its COVID-19 oral tablet. Although an immune response was generated, the level of neutralizing antibodies observed was lower than with traditional injections.
The solution? The company is moving forward with a tablet specifically targeting the S-protein, which is responsible for entry into host cells and receptor viral attachment. In a study involving non-human primates the S-only tablet did demonstrate neutralizing antibody responses in mucosal sites. The company has since moved its S-only candidate into a phase 2 trial.
While Rahimi's price target isn't out of the question if this S-only candidate is wildly successful in mid-stage studies, there are still far too many questions left unanswered to get too excited about Vaxart. If my arm were twisted, I'd venture a guess that shares come nowhere near $18 over the next 12 months.
Image source: Getty Images.
Redfin: Implied upside of 171%
Lastly, technology-focused real estate company Redfin (NASDAQ: RDFN) offers delectable upside. According to analyst Naved Khan of Truist Financial, this former highflier could hit $31 a share, which would represent potential upside of 171%.
Even though Khan lowered his firms' price target on Redfin by $11 a share last week after Redfin's second-quarter outlook reflected softness in housing market activity, he sees the company as being well-positioned to gobble up share in the real estate arena. Additionally, Khan pointed to the recent acquisitions of RenPath and Bay Equity as reasons Redfin's margins can expand.
The big concern for any company tied to the real estate sector is rapidly rising mortgage rates. Historically high inflation has tied the hands of the Federal Reserve and is coercing it to aggressively raise interest rates. That, in turn, has sent the 30-year mortgage rate to levels not seen in 13 years. Since homebuyers were spoiled with historically low mortgage rates for such a long period, it's impossible to tell how long it'll take before home demand is booming again.
However, I do agree with Khan that Redfin is uniquely positioned to take market share over time. One of the key Redfin advantages is that it undercuts traditional real estate firms on fees. Whereas most real estate companies charge a 2.5% or 3% listing fee/commission, Redfin charges only 1% to 1.5%, depending upon how much previous business was done with the company. Based on a median list price for active listings of $425,000 in April, Redfin could save its customers up to $8,500!
Additionally, Redfin offers a number of personalized tools that can lure buyers and sellers to its platform. For example, RedfinNow is the company's iBuying service that purchases homes for cash, thereby removing the haggling and hassle of selling a home. It also offers Concierge services that aid sellers in maximizing the value of their home.
Though Redfin will require its shareholders (which includes me, as of last week) to be patient, the reward should be worth the 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. | Aurora Cannabis: Implied upside of 77% The first former highflier Wall Street believes offers significant upside potential is Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB). Although big market declines can tug at investors' heartstrings, history has shown time and again that putting your money to work during these significant pullbacks is a good idea. Back in November, when CIBC had a CA$9.25 target on Aurora, Zamparo pointed to the company's international medical cannabis opportunity, as well as its cost-cutting potential, as reasons to be positive. | Aurora Cannabis: Implied upside of 77% The first former highflier Wall Street believes offers significant upside potential is Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB). Redfin: Implied upside of 171% Lastly, technology-focused real estate company Redfin (NASDAQ: RDFN) offers delectable upside. Even though Khan lowered his firms' price target on Redfin by $11 a share last week after Redfin's second-quarter outlook reflected softness in housing market activity, he sees the company as being well-positioned to gobble up share in the real estate arena. | Aurora Cannabis: Implied upside of 77% The first former highflier Wall Street believes offers significant upside potential is Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB). Redfin: Implied upside of 171% Lastly, technology-focused real estate company Redfin (NASDAQ: RDFN) offers delectable upside. Even though Khan lowered his firms' price target on Redfin by $11 a share last week after Redfin's second-quarter outlook reflected softness in housing market activity, he sees the company as being well-positioned to gobble up share in the real estate arena. | Aurora Cannabis: Implied upside of 77% The first former highflier Wall Street believes offers significant upside potential is Canadian licensed marijuana producer Aurora Cannabis (NASDAQ: ACB). In a study involving non-human primates the S-only tablet did demonstrate neutralizing antibody responses in mucosal sites. Even though Khan lowered his firms' price target on Redfin by $11 a share last week after Redfin's second-quarter outlook reflected softness in housing market activity, he sees the company as being well-positioned to gobble up share in the real estate arena. |
36547.0 | 2022-05-17 00:00:00 UTC | CANADA STOCKS-Pot producers, tech stocks lift Toronto index | ACB | https://www.nasdaq.com/articles/canada-stocks-pot-producers-tech-stocks-lift-toronto-index | nan | nan | By Amal S
May 17 (Reuters) - Canada's main stock index rose on Tuesday, aided by gains in technology stocks and pot producers, although concerns around soaring inflation and a global slowdown capped the rise.
At 9:40 a.m. ET (13:40 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 233.2 points, or 1.15%, at 20,439.61, and set for its third consecutive session of gains.
Toronto-listed technology .SPTTTK stocks gained 2.4% tracking gains in U.S.-heavy tech Nasdaq .IXIC index, while healthcare .GSPTTHC stocks jumped 2.7% with pot producers Canopy Growth WEED.TO, Aurora Cannabis ACB.TO and Cronos Group CRON.TO up between 2.5% and 4.4%.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.3% as gold prices edged up in a range-bound trade on a slide in U.S. dollar helped bullion recover slightly from last session's near four-month lows. GOL/
"A weaker dollar and slight retreat in Treasury yields were seen as key factors triggering a move to the upside. Regardless of recent gains, the precious metal is certainly not out of the woods yet," said Lukman Otunuga, Senior Research Analyst at FXTM.
"Should the pending US economic data and speeches from Fed officials boost Fed hike expectations and propel the dollar higher, gold could be in trouble."
The energy sector .SPTTEN climbed 1.1% as oil hit its highest in seven weeks, supported by the European Union's ongoing push for a ban on Russian oil imports that would tighten supply. O/R
The financials sector .SPTTFS gained 1.4%, the industrials sector .GSPTTIN rose 1.6%.
The benchmark index last week recorded its seventh consecutive weekly losses, hurt by recent sell-off in equity markets on concerns around an aggressive policy tightening by central banks to curb inflation.
On the economic front, foreign investors bought a net C$46.94 billion ($36.64 billion) in Canadian securities in March, led by corporate bonds and shares, following a revised C$7.49 billion total purchase in February, Statistics Canada said.
(Reporting by Amal S in Bengaluru; Editing by Krishna Chandra Eluri)
((amal.s@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. | Toronto-listed technology .SPTTTK stocks gained 2.4% tracking gains in U.S.-heavy tech Nasdaq .IXIC index, while healthcare .GSPTTHC stocks jumped 2.7% with pot producers Canopy Growth WEED.TO, Aurora Cannabis ACB.TO and Cronos Group CRON.TO up between 2.5% and 4.4%. ET (13:40 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 233.2 points, or 1.15%, at 20,439.61, and set for its third consecutive session of gains. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.3% as gold prices edged up in a range-bound trade on a slide in U.S. dollar helped bullion recover slightly from last session's near four-month lows. | Toronto-listed technology .SPTTTK stocks gained 2.4% tracking gains in U.S.-heavy tech Nasdaq .IXIC index, while healthcare .GSPTTHC stocks jumped 2.7% with pot producers Canopy Growth WEED.TO, Aurora Cannabis ACB.TO and Cronos Group CRON.TO up between 2.5% and 4.4%. By Amal S May 17 (Reuters) - Canada's main stock index rose on Tuesday, aided by gains in technology stocks and pot producers, although concerns around soaring inflation and a global slowdown capped the rise. Regardless of recent gains, the precious metal is certainly not out of the woods yet," said Lukman Otunuga, Senior Research Analyst at FXTM. | Toronto-listed technology .SPTTTK stocks gained 2.4% tracking gains in U.S.-heavy tech Nasdaq .IXIC index, while healthcare .GSPTTHC stocks jumped 2.7% with pot producers Canopy Growth WEED.TO, Aurora Cannabis ACB.TO and Cronos Group CRON.TO up between 2.5% and 4.4%. By Amal S May 17 (Reuters) - Canada's main stock index rose on Tuesday, aided by gains in technology stocks and pot producers, although concerns around soaring inflation and a global slowdown capped the rise. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.3% as gold prices edged up in a range-bound trade on a slide in U.S. dollar helped bullion recover slightly from last session's near four-month lows. | Toronto-listed technology .SPTTTK stocks gained 2.4% tracking gains in U.S.-heavy tech Nasdaq .IXIC index, while healthcare .GSPTTHC stocks jumped 2.7% with pot producers Canopy Growth WEED.TO, Aurora Cannabis ACB.TO and Cronos Group CRON.TO up between 2.5% and 4.4%. By Amal S May 17 (Reuters) - Canada's main stock index rose on Tuesday, aided by gains in technology stocks and pot producers, although concerns around soaring inflation and a global slowdown capped the rise. ET (13:40 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 233.2 points, or 1.15%, at 20,439.61, and set for its third consecutive session of gains. |
36548.0 | 2022-05-13 00:00:00 UTC | 4 Top Stock Trades for Monday: SPY, COST, AFRM, ACB | ACB | https://www.nasdaq.com/articles/4-top-stock-trades-for-monday%3A-spy-cost-afrm-acb | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The S&P 500 closed lower for the sixth-straight week, but traded well on Friday, up 2.4%. With that in mind, let’s look at our top stock trades for next week.
Top Stock Trades for Monday No. 1: S&P 500 (SPY)
Click to Enlarge
Source: Chart courtesy of TrendSpider
The SPDR S&P 500 ETF (NYSEARCA:SPY) was due for a bounce at some point. Going on six straight weekly declines — despite being up on Friday — is just too much downside, even though there are a bevy of negatives.
We got a strong close on Thursday and were looking for a nice boost today and we got it. Bulls sort of fumbled the ball late in the session but recovered a bulk of their miscues by the close.
So, what now?
As you can see on the chart here, the $405 area is tricky. There we have last week’s low and this week’s resistance. It also has active resistance in the form of the 10-day moving average.
If we can clear this area, perhaps the $410 to $412 zone could be on the table, followed by a rally all the way up to the 21-day moving average. That all said, keep in mind what direction the trend has been in — down.
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If we move lower again, watch today’s low at $395.61. A break of that — which is roughly Thursday’s high, too — then $392 is on the table. Below $389, and the lows are back in play near $385.
Top Stock Trades for Monday No. 2: Costco (COST)
Click to Enlarge
Source: Chart courtesy of TrendSpider
Costco (NASDAQ:COST) has traded lower for five-straight weeks now but is giving us a doji week as it rests on the 50-week moving average.
If Costco stock can go weekly-up over $510.63, then bulls could enjoy more upside. Keep in mind, though, the 200-day moving average is near this level, so it’s an important area for the stock to clear and stay above.
If it can do that, it puts the $535 area in play, which is the declining 10-week and 21-week moving averages. Above that puts $545 in play, which is the 50% retracement.
On the downside, however, keep an eye on $490. If Costco tips lower, we could be looking at a retest of the lows near $480.
Top Stock Trades for Monday No. 3: Affirm Holdings (AFRM)
Click to Enlarge
Source: Chart courtesy of TrendSpider
Moving on from some of the stronger names out there, Affirm Holdings (NASDAQ:AFRM) has been crushed lately — aside from Friday’s powerful post-earnings jump on solid results.
The stock is gapping up into prior support near $26 and the 10-day moving average. If it can’t reclaim this area, then this month’s low remains vulnerable.
The Smart Money Is Putting a Bullish Spin on the Market Crash
However, if the stock can power higher from here, bulls can look to the $32.50 area, then the $37.50 zone. In between these two measures sits the 50-day and 10-week moving averages and they could be resistance.
Top Trades for Monday No. 4: Aurora Cannabis (ACB)
Click to Enlarge
Source: Chart courtesy of TrendSpider
Aurora Cannabis (NASDAQ:ACB) is also rallied on earnings on Friday. It too has overhead resistance right above it, in the form of $2.90 and the 10-day.
If it can push through this area, keep an eye out for the 21-day, which isn’t too far above this area.
However, if Aurora can really gain some steam, $3.40 is in play, followed by $3.65. These two levels are the 50-day and 50% retracement, and the 61.8% retracement and daily VWAP measure, respectively.
On the downside, though, failure to reclaim and/or hold above $2.90 keeps the May low in play.
On the date of publication, Bret Kenwell 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.
The post 4 Top Stock Trades for Monday: SPY, COST, AFRM, ACB 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. | 4: Aurora Cannabis (ACB) Click to Enlarge Source: Chart courtesy of TrendSpider Aurora Cannabis (NASDAQ:ACB) is also rallied on earnings on Friday. The post 4 Top Stock Trades for Monday: SPY, COST, AFRM, ACB appeared first on InvestorPlace. | Click to Enlarge Source: Chart courtesy of TrendSpider Aurora Cannabis (NASDAQ:ACB) is also rallied on earnings on Friday. The post 4 Top Stock Trades for Monday: SPY, COST, AFRM, ACB appeared first on InvestorPlace. 4: Aurora Cannabis (ACB) | The post 4 Top Stock Trades for Monday: SPY, COST, AFRM, ACB appeared first on InvestorPlace. 4: Aurora Cannabis (ACB) Click to Enlarge Source: Chart courtesy of TrendSpider Aurora Cannabis (NASDAQ:ACB) is also rallied on earnings on Friday. | The post 4 Top Stock Trades for Monday: SPY, COST, AFRM, ACB appeared first on InvestorPlace. 4: Aurora Cannabis (ACB) Click to Enlarge Source: Chart courtesy of TrendSpider Aurora Cannabis (NASDAQ:ACB) is also rallied on earnings on Friday. |
36549.0 | 2022-05-13 00:00:00 UTC | Why Aurora Cannabis, Canopy, and Sundial Stocks Popped on Friday | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-canopy-and-sundial-stocks-popped-on-friday | nan | nan | What happened
Canadian cannabis company Aurora Cannabis (NASDAQ: ACB) reported its fiscal third-quarter 2022 earnings last night, and in so doing, sparked a rally across the cannabis sector today. As of 1 p.m. ET, shares of Aurora Cannabis itself are already up 13%, and peer producers Canopy Growth (NASDAQ: CGC) and Sundial Growers (NASDAQ: SNDL) are benefiting as well -- up 8.5% and 5.9%, respectively.
But was the news really good enough to justify this rally?
Image source: Getty Images.
So what
Heading into Q3, analysts had forecast that Aurora Cannabis would lose $0.19 per share (0.25 Canadian dollars, and furthermore, this was a pro forma prediction) on sales of $41.5 million -- about CA$53.7 million.
Aurora actually exceeded analyst predictions on sales. Sales for the quarter declined only 9% to CA$50.4 million, with consumer cannabis sales way down -- off 43% -- but sales of medicinal marijuana up 8%. It was this sales number last night, I suspect, that accounts for investors' enthusiasm about Aurora Cannabis and its peers today.
On the earnings front, however, the news was less good. Aurora lost about CA$1 billion in fiscal Q3 -- which is quite a lot of money for a company valued at less than half a billion U.S. dollars to lose, and works out to roughly CA$4.72 per share according to Aurora's SEC filing. In the earnings release itself, Aurora didn't even bother to calculate per share losses, preferring to give its financial results in the form of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), by which metric its losses seemed slimmer -- only CA$12.3 million.
Now what
So, no. To be frank, despite the relatively good sales news, given how much money Aurora is still losing, I'm not at all convinced that the investors bidding up shares of Canopy or Sundial (or Aurora itself for that matter) on this news are making the right call.
That being said, Aurora did try to parlay its "sales beat" into further momentum for its stock, saying that it is doubling down on cost-cutting and planning to reduce its operating costs by CA$150 million to CA$170 million, annually, by fiscal H1 2023 (or in other words, before the end of this calendar year). Aurora further stated that it expects to achieve "adjusted EBITDA profitability" by the end of this year. Helping with that, Aurora noted that gross margins in the medicinal marijuana business improved during the quarter, even as consumer cannabis profit margins continued to deteriorate.
Can Aurora cut its costs fast enough to make up the difference, and deliver its promised "adjusted EBITDA profitability"? Perhaps, and if it succeeds, that might be enough to keep this rally going for it and its peers. That being said, I have to point out that even CA$170 million in cost-cutting won't make much of a dent in GAAP losses that are running at CA$1 billion. It won't turn "adjusted EBITDA profitability" into anything resembling actual profitability.
And until Aurora -- or any of these cannabis companies for that matter -- proves it can earn an actual profit selling marijuana, I won't be investing my own money in marijuana 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. | What happened Canadian cannabis company Aurora Cannabis (NASDAQ: ACB) reported its fiscal third-quarter 2022 earnings last night, and in so doing, sparked a rally across the cannabis sector today. It was this sales number last night, I suspect, that accounts for investors' enthusiasm about Aurora Cannabis and its peers today. In the earnings release itself, Aurora didn't even bother to calculate per share losses, preferring to give its financial results in the form of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), by which metric its losses seemed slimmer -- only CA$12.3 million. | What happened Canadian cannabis company Aurora Cannabis (NASDAQ: ACB) reported its fiscal third-quarter 2022 earnings last night, and in so doing, sparked a rally across the cannabis sector today. That being said, I have to point out that even CA$170 million in cost-cutting won't make much of a dent in GAAP losses that are running at CA$1 billion. And until Aurora -- or any of these cannabis companies for that matter -- proves it can earn an actual profit selling marijuana, I won't be investing my own money in marijuana stocks. | What happened Canadian cannabis company Aurora Cannabis (NASDAQ: ACB) reported its fiscal third-quarter 2022 earnings last night, and in so doing, sparked a rally across the cannabis sector today. To be frank, despite the relatively good sales news, given how much money Aurora is still losing, I'm not at all convinced that the investors bidding up shares of Canopy or Sundial (or Aurora itself for that matter) on this news are making the right call. That being said, Aurora did try to parlay its "sales beat" into further momentum for its stock, saying that it is doubling down on cost-cutting and planning to reduce its operating costs by CA$150 million to CA$170 million, annually, by fiscal H1 2023 (or in other words, before the end of this calendar year). | What happened Canadian cannabis company Aurora Cannabis (NASDAQ: ACB) reported its fiscal third-quarter 2022 earnings last night, and in so doing, sparked a rally across the cannabis sector today. Sales for the quarter declined only 9% to CA$50.4 million, with consumer cannabis sales way down -- off 43% -- but sales of medicinal marijuana up 8%. To be frank, despite the relatively good sales news, given how much money Aurora is still losing, I'm not at all convinced that the investors bidding up shares of Canopy or Sundial (or Aurora itself for that matter) on this news are making the right call. |
36550.0 | 2022-05-13 00:00:00 UTC | CANADA STOCKS-Toronto index rebounds on energy, tech boost | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-rebounds-on-energy-tech-boost | nan | nan | By Amal S
May 13 (Reuters) - Canada's main stock index rebounded on Friday on the back of gains in energy and technology stocks, but was set to post its seventh consecutive weekly drop.
At 9:47 a.m. ET (13:47 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 268.42 points, or 1.36%, at 19,967.47 and was set to snap its six-day losing streak.
The technology sector .SPTTTK rose 4.3%, tracking gains in U.S. tech-heavy Nasdaq .IXIC index. Shopify Inc SHOP.TO, up 10.6%, also supported the sub-index.
The energy sector .SPTTEN climbed 3%, supported by a rebound in crude prices. O/R
"We've got a bit of optimism this morning as we come in and it feels like things are calmer. Oil's up 3%, so it feels like we might have a bit of a short cover bounce today, but it's really going be all about the close and see if we can hold it into the weekend," said Gregory Taylor, portfolio manager at Purpose Investments.
Healthcare .GSPTTHC stocks gained 3%, supported by pot producers Canopy Growth WEED.TO, Cronos Group CRON.TO, Aurora Cannabis ACB.TO up between 4.2% and 5.7%.
The benchmark index, down 3.3% this week, was set to record its seventh consecutive week in losses, hurt by recent sell-off in equity markets on concerns around an aggressive policy tightening by central banks to curb inflation.
"TSX had been hanging in a lot better than other global markets. What we saw is that people finally started selling their winners to fund problems in other parts of their portfolios," added Taylor.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 0.7%, while the heavy-weight financials sector .SPTTFS gained 0.9%
Investors awaited Canada's inflation report for April due next Wednesday, while strategists say the Bank of Canada is likely to be among the first of the major central banks to lift interest rates to a more normal setting even as worries persist about record-high levels of household debt.
(Reporting by Amal S in Bengaluru; Editing by Krishna Chandra Eluri)
((amal.s@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. | Healthcare .GSPTTHC stocks gained 3%, supported by pot producers Canopy Growth WEED.TO, Cronos Group CRON.TO, Aurora Cannabis ACB.TO up between 4.2% and 5.7%. ET (13:47 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 268.42 points, or 1.36%, at 19,967.47 and was set to snap its six-day losing streak. Oil's up 3%, so it feels like we might have a bit of a short cover bounce today, but it's really going be all about the close and see if we can hold it into the weekend," said Gregory Taylor, portfolio manager at Purpose Investments. | Healthcare .GSPTTHC stocks gained 3%, supported by pot producers Canopy Growth WEED.TO, Cronos Group CRON.TO, Aurora Cannabis ACB.TO up between 4.2% and 5.7%. By Amal S May 13 (Reuters) - Canada's main stock index rebounded on Friday on the back of gains in energy and technology stocks, but was set to post its seventh consecutive weekly drop. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 0.7%, while the heavy-weight financials sector .SPTTFS gained 0.9% Investors awaited Canada's inflation report for April due next Wednesday, while strategists say the Bank of Canada is likely to be among the first of the major central banks to lift interest rates to a more normal setting even as worries persist about record-high levels of household debt. | Healthcare .GSPTTHC stocks gained 3%, supported by pot producers Canopy Growth WEED.TO, Cronos Group CRON.TO, Aurora Cannabis ACB.TO up between 4.2% and 5.7%. By Amal S May 13 (Reuters) - Canada's main stock index rebounded on Friday on the back of gains in energy and technology stocks, but was set to post its seventh consecutive weekly drop. The benchmark index, down 3.3% this week, was set to record its seventh consecutive week in losses, hurt by recent sell-off in equity markets on concerns around an aggressive policy tightening by central banks to curb inflation. | Healthcare .GSPTTHC stocks gained 3%, supported by pot producers Canopy Growth WEED.TO, Cronos Group CRON.TO, Aurora Cannabis ACB.TO up between 4.2% and 5.7%. By Amal S May 13 (Reuters) - Canada's main stock index rebounded on Friday on the back of gains in energy and technology stocks, but was set to post its seventh consecutive weekly drop. The energy sector .SPTTEN climbed 3%, supported by a rebound in crude prices. |
36551.0 | 2022-05-13 00:00:00 UTC | Aurora Cannabis Inc. (ACB) Q3 2022 Earnings Call Transcript | ACB | https://www.nasdaq.com/articles/aurora-cannabis-inc.-acb-q3-2022-earnings-call-transcript | nan | nan | Image source: The Motley Fool.
Aurora Cannabis Inc. (NASDAQ: ACB)
Q3 2022 Earnings Call
May 12, 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. third quarter 2022 results conference call. [Operator instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ananth Krishnan, vice president of corporate development and investor relations.
Please go ahead, sir.
Ananth Krishnan -- Vice President of Corporate Development and Investor Relations
Thank you, Denise, and we appreciate you all for 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 financial results for the third quarter of fiscal 2022. The release, and accompanying financial statements, management discussion and analysis are available on our IR website and via SEDAR and EDGAR data bases.
In addition, you can find a supplemental information deck on our IR website. Listeners are also reminded that certain matters discussed in 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 be accessed via SEDAR and EDGAR. Following prepared remarks by Miguel and Glen, we will conduct a question-and-answer session for and analysts. However, we ask you to limit yourselves to one question and then return to the queue. With that, I will turn over the call to Miguel.
Please go ahead.
Miguel Martin -- Chief Executive Officer
Thank you, Ananth. In an environment defined by political upheaval, record-setting inflation, and market volatility, we are intent on controlling what we can control and delivering on our target of reaching a profitable adjusted EBITDA run rate by the first half of fiscal 2023. In fact, I'm very pleased to tell you that, our plan is working and we are in better position to hit this goal than we were a quarter ago. The foundation of our confidence is our global medical canvas business, which is both defensible and stable with margins that exceed 60%.
These are highly desirable characteristics in today's volatile economic environment. And in addition to being the number one Canadian LP in terms of medical cannabis revenue over the last 12 months, the business continues to grow in other parts of the world, especially in Europe and Australia this quarter. The second reason for our confidence is cost savings and we are pleased to have identified additional opportunities. Recall from last quarter, we said, we'd achieved the higher end of our targeted $60 million to $80 million savings annually, by the first half of fiscal 2023.
Today, we are announcing that we have identified an additional $70 million to $90 million of savings within that same timeframe, for a total of $150 million to $170 million of savings annually. Importantly, our total cost savings won't impact plan growth investments, but we expect them to materially reduce our cash needs. Our third reason is the balance sheet, which remains among the strongest in the industry and puts Aurora in a position of strength, particularly in challenging times. We currently have approximately $283 million in cash, inclusive of our early repurchase of $141 million in convertible debt for further strategic and value accretive opportunities, and about $190 million U.S.
remaining under our ATM program. Fourth, OCO, our science and innovation business has one of the largest catalogs of high-quality genetics and IP in biosynthesis available for licensing. OCO represents a capital-light, long-term, revenue growth opportunity that we believe makes Aurora unique and can drive success by enabling our licensing partners to deliver a continuous stream of innovation to the market. Let's take a deeper dive on our medical business.
During Q3, international medical revenue was up 55%, compared to last year. But down from Q2, because of our large shipment to Israel last quarter, which we did not expect to recur this quarter. As you know, predictability of revenue, especially in developing markets can be affected by regulatory complexities, such as timing of government approvals and import permits. We are currently selling medical cannabis products in seven EU countries, Germany, Malta, Poland, Czech Republic, U.K., Denmark and France.
And are either the market leader or in the top three in all of those countries. We estimate today, there are around 150,000 patients in the EU, but if it were to reach similar adoption levels as Canada, i.e., 1% of the population, the patient pool could expand to $3.5 million patients. In Poland, revenues grew threefold year over year, as we followed up last quarter's record breaking shipment with another strong quarter. We have established a leadership position in the Polish flower market with an estimated 70% share, and expect the success to continue, as we launch new cultivars in Q3, accompanied by a marketing push.
In the U.K., our revenues increased 60% compared to Q3 last year. Growth was driven by a rapid increase in patient numbers as more evidence has come out and more physicians prescribe cannabis. While there is no reimbursement currently, which is a barrier to growth, we've not seen any pricing erosion. We are also preparing to launch extracts in Q4 and have already completed the first delivery to our import partners.
In Germany, we had two of the top three best selling products and dry flower for all of calendar 2021. And currently estimate we are number two in market share. Our market share has grown steadily in the extract markets thanks to new product innovation. While growth in patient numbers is moderated due to slow prescriber adoption, Germany remains the largest market in the EU, and 83 million citizens and we're bullish, given the new coalition's plans to legalize adult rec cannabis and improve medical patient accessibility.
In France, we have completed three shipments to date for the pilot program where we are the exclusive supplier of dry flower. Early estimates have us generating revenue as early as March 2023. In the Netherlands, we partner with one of 10 license holders to sell legally produce cannabis in approximately 10% of the country's coffee shops. The Netherlands is roughly half the size of Canada, which recall is a $5 billion retail market.
And like France, we expect sales here to begin in calendar 2023. Finally, in Australia, our revenues rose 300% year over year, driven by record numbers of patients. Through our exclusive supply agreement with MedRelief Australia, we offer medical patients in the EU GMP certified range of products, including dry flower and recently released vapes. Let me reiterate that we believe that the cannabis growth story over the next several years will center on international medical and recreational.
While the EU is currently a medical only market several governments have announced plans for recreational schemes, most notably Germany. The EU cannabis market is expected to be $6 billion by 2025. And we expect to grab a sizable market share given our regulatory expertise, compliance protocols, testing and science. These attributes for placing the pole position for success.
Turning now to the Canadian medical market, we not only have a competitive advantage, but our direct-to-consumer approach drives our industry leading margins. Overall revenue was mostly flattened Q3 compared to Q2 although our market share expanded 200 basis points to 26%. We attribute these share gains to the best in class patient, clinician and physician service we offer along with the launch of a number of premium products and innovation. Our insured patients made up 79% of our domestic medical sales, up from 73% in Q2.
This is a key to stability and we believe bodes well for the future. The infrastructure to acquire, retain and move the patient through the process requires significant resources and experience. And the truth is that a lot of that same infrastructure and knowhow the patients and the Canadian market is directly applicable to our success in other key markets, such as U.K., Germany and France. Regarding Canadian adult rec, our Q3 revenue reflects persistent macro challenges including excess inventory and pressure on older SKUs.
As we've said before, these dynamics are unsustainable, but we have the scale and resources to navigate through this industry consolidation. In the meantime, our focus remains on maximizing profitability by leveraging low cost production and further rationalizing facilities and no longer makes sense, and we have also entered higher margin categories. From April to July, we plan to launch 40 new products with respect to benefit both wrapped and medical channels. These include our first infused pre-rolls, and hash offerings, brand new cultivars from our breeding program, and a bevy of new vape edibles and concentrates flavors.
Our full year 2022 innovation calendar includes a significant number of new products, and we have established a regular cadence of new product innovations. Finally, I want to conclude with our recent accretive acquisition of Thrive. Thrive is most widely known for its award winning flagship recreational brand Greybeard Cannabis Company, which was recognized as the number one brand recommended by Canadian bud tenders in 2021. This transaction will place the talented management team, who thrive in charge of our Canadian rec business, which we expect will drive improvements in our cultivation practices and premium products offerings.
This team has been able to build a profitable premium business with limited resources that will immediately contribute EBITDA to bottom line. And with that, I would now like to turn the call over to Glen.
Glen Ibbott -- Chief Financial Officer
Thank you, Miguel. Good afternoon, everyone. I'll start off with a few key highlights. We take pride in having one of the strongest balance sheets among Canadian LPs.
At quarter end we had $480 million of cash and no term debt. During Q3, we repurchase $13.4 million in principle on our 2024 convertible debt at a total cost of $11.8 million, including accrued interest. And in early May we repurchased another $128 million in principle on our convertible debt at a total cost of $122.9 million including accrued interest. As of today, we have USD 229 million of principal remaining on our convertible debt.
We believe that debt reduction, even though maturity is still almost three years out, is a prudent and defensive capital allocation decision. This debt reduction will save annual cash interest costs of $8.5 million. Also, in early May, we closed the Thrive acquisition for which we paid mostly cash, about $26 million cash up to $38 million price. We continue to have access to a shelf perspective, with USD 887.6 million still available on direct, including USD 187.6 million remaining under our ATM programs.
As we have stated before, we don't need this capital for operating purposes, consider it as available for strategic M&A, and other value creation opportunities. Our cash flow continues to improve with $39.3 million used in operations and working capital in Q3 compared to $66.2 million in the same period of last year. And based on the additional targeted cost reductions in calendar 2022 that Miguel described, we expect cash flow to continue to improve. We are also progressing closer to our EBITDA positive milestone as we reduced our loss by $8.6 million versus last year.
However, compared to last quarter, our adjusted EBITDA loss increased by $3.2 million. This is purely due to revenue differences, as I'll explain shortly, as gross margins remain strong and healthy, and SG&A expenses continued to decline further as part of our business transformation plan. Q3 net cannabis revenue was $50.4 million compared to $60.6 million last quarter. The change was mainly due to variable cadence from quarter to quarter of shipments in Israel, and partially due to lower consumer cannabis net revenue because of competitive pressures across the portfolio, coupled with retail store closures during the quarter in key provinces that impacted our premium offerings.
So let me address each of our core businesses in a bit more detail. Canadian medical revenue was $24.8 million in Q3, down slightly from Q2. As we have said previously, our Canadian medical patients fall into two groups, those with cost reimbursement and those without it. To build on what Miguel said earlier, we have purposefully repositioned our business to focus on the insured patient population, which should allow us to further improve our bottom-line.
Our international medical revenue is $14.6 million, and reflected 55% growth versus the prior year, and the decrease of 26% sequentially. Now, I will remember that Q2 revenue included approximately $8.5 million in net sales to Israel. Excluding the impact of the Q2 Israeli sales, net international medical revenue increased sequentially by 29% and was driven by growth in important markets, including Germany, Poland, U.K. and Australia.
So taken together, our leading medical businesses in Canada and Europe performed well, as usual generating $39.4 million in sales and gross margin of 64%, up slightly from the prior quarterly. Medical represented about 78% of our Q3 revenue and almost 90% of our total Q3 gross profit. This segment distinguishes us from our competitors, and the stability of the gross profit generated in the businesses is a critical component for us in reaching a positive EBITDA run rate by the end of the first half of fiscal 2023. Our Q3 consumer revenue was $10.3 million, which reflected a 28% decline compared to the last quarter.
Consumer cannabis represented about 21% of our Q3 revenues and about 11% of our gross profit. As I mentioned before, the revenue decline is primarily attributed to price pressures across our portfolio and was exacerbated by COVID-related store closures in January that impacted our premium brands. It is important to note that, even as our consumer cannabis net revenue fell, our consumer gross margin improves 600 basis points to 29%, as we continue to shift toward the higher margin product portfolio. In March for the first time in our history, San Rafael sales were greater than data special revenue.
This shift is important for our path to positive EBITDA, and combined with the acquisition of Thrive, we expect to see this move to premium margins accelerate. As an example of the importance of this shift, in Q3, despite revenue being off $4 million quarter over quarter, gross profit was only down $280,000. SG&A, which includes R&D, came in at $42.3 million in Q3. And this included $2.7 million in restructuring costs and prior period accruals.
Excluding these costs, adjusted SG&A was $39.5 million, our lowest level in almost four years, which was prior adult use legalization. While our SG&A is already well controlled, we are certainly not done with the efficiency and expect to make significant additional progress as part of our updated targeted range for cost savings. So pulling all of this together, yes, we generated an adjusted EBITDA loss in Q3 2022 of $12.3 million, $3.2 million change in adjusted EBITDA loss as compared to last quarter was primarily driven by the lower level of sales in the Israel, and was partially offset with a $2.3 million decrease in adjusted SG&A expense. Now, I'll give you a bit more color regarding our revised cost savings target of $150 million to $170 million on an annualized basis.
We plan to have executed all of the necessary changes, before the end of calendar 2022 and expect these savings to be evenly split between cost of goods sold and SG&A. They should be reflected in our P&L either as they occur over the next three quarters for SG&A savings or as the inventory is drawn down following production related savings. And of course, all of it positively impacts our cash flow the changes are executed. Today's announcement of the closure of our Aurora Sky facility in Edmonton is part of our business transformation plan.
This decision is in keeping with our strategy in the Canadian adult rec market to focus on higher margin premium categories and to move away from purposefully producing for the low to no margin categories. We are working toward a leaner more agile operating model and is expected to provide strong upward EBITDA leverage as future revenues increase. Resulting from the strategic business transformation changes, we recorded a number of one-time non-cash accounting charges in Q3. Goodwill in the Canadian market segment was written down completely charges $741.7 million.
And we recorded specific asset impairments of $176.1 million, and an inventory provision charges $63.6 million. So summing up, there are three key takeaways from my financial review of Q3 2022. First, our balance sheet remains strong supported by a healthy cash balance, reduced convertible debt levels, and improving working capital on cash flow. Second, our medical businesses in Canada and internationally provide us with a competitive advantage and are critical to us generating sustainable profitability.
And it's worth noting we generate more gross profit for our medical cannabis businesses than any of our Canadian LP competitors do from their entire cannabis businesses. And finally, we've worked hard to increase the target range for cost savings. These are expected to have material positive impact or bottom-line and cash flow and reflect a leaner operating model that positions as well for future growth. So thanks for your interest in Aurora.
I'll now turn the call back to Miguel.
Miguel Martin -- Chief Executive Officer
Thanks, Glen. Before Q&A, let me share some final takeaways. We expect to achieve a positive adjusted EBITDA run rate by the end of the first half of fiscal 2023. Second, our medical cannabis business continues to be a smart business to invest behind, particularly in environment of war in Europe, high inflation and possible recession.
It has defensible characteristics, high margins, and in our view, no one does it better both domestically and internationally. Third, we expect the rec market in Canada to correct and when that process is complete, we will have added opportunity for market share and pricing. Our focus in the meantime is rationalizing our footprint and driving cost efficiencies. Fourth, our science and innovation program adds another capitalized opportunity to our portfolio.
And our strong balance sheet positions us for continued organic growth and strategic M&A. On that note, we have already demonstrated considerable patience and discipline in evaluating acquisitions, seeking targets that not only fits strategically, but are also rationally priced. The accretive M&A is a vital part of our plan going forward, and we believe we're in a great position to create shareholder value over time. So in closing, we're delivering on our stated goals, most notably our business transformation plan, which is squarely on track.
We appreciate your time and interest today. We're energized for the rest of the year. And now, I'll turn it over the operator to open the lines for questions.
Questions & Answers:
Operator
Thank you, sir. [Operator instructions] The first question we have is Michael Lavery from Piper Sandler. Please go ahead.
Michael Lavery -- Piper Sandler -- Analyst
Thank you. Good evening.
Miguel Martin -- Chief Executive Officer
Good evening, Michael.
Michael Lavery -- Piper Sandler -- Analyst
So it's no surprise to see Aurora Sky finally get closed all the way. I think it has capacity several times what you're selling at the moment, but it's a big facility. It was sort of a showpiece of the portfolio for a while. How much of the incremental sales are driven by that? Is that really the majority? Is it all of it? Is it just one of several pieces? And a little bit related to that, to understand how the savings flowed through it? Could you maybe touch on the sequential deterioration in EBITDA margins from last quarter to this one? I know it's always a little bit lumpy, but what was some of the drivers there? And how much of that is -- how should we think about the savings really hitting fiscal '23 versus starting to see them in the fourth quarter this year?
Miguel Martin -- Chief Executive Officer
Sure. So let me kick off on sort of a top-line point, and then I'll let Glen go into some of the modeling points. You know, Michael, I think as you're well aware, and many people are aware that these massive facilities that were built, particularly in Canada, really were built with this idea that you could grow cannabis, particularly flower, in Canada, and ship it and all around the world, including the U.S. and parts of Eastern Europe.
So that was obviously has not come to be. Secondly, consumers very quickly evolved into, being very discerning, we're seeing that, not only in Canada, but we're also seeing it in the U.S. and you're starting to see as well, in Western Europe. These massive facilities that employed a significant amount of automation, just we're not built for purpose for this environment.
And one of the things I think I would mention here is Aurora has been very aggressive in proactively right sizing the company for what it needs. So most recently, as we've announced, Aurora Sky was down about 25% capacity, the carrying cost on fixed and what that means across your system was just untenable, and we did everything we could to try to find locations, to be able to sell that type of flower cannabis, and it just didn't work. So I think that should be an indication that it's everybody that we will continue to make the tough decisions that we need to make in order to have the proper, sort of overall footprint. Secondly, when you have such a complicated network, with facilities all over Canada, it creates a lot of excess cost in the overall sort of simplicity of that system.
And so there's added benefits, not just because of the carrying costs of Aurora Sky, but also to the simplification, or the closure of other facilities that we've announced as well, which will have a significant impact overall. And so, I think those are all sort of important points. I mean, Glen, do you want to grab the second part of Michael's question in terms of the flow through? Just the one thing I will mention, Michael is that we're really proud of how quick and how fast the savings are going to hit our balance sheet, and I think you'll see him quite quickly. But Glen, if you could talk about the modeling and the timing?
Glen Ibbott -- Chief Financial Officer
Sure, Mike. So the initial tranche of savings that we announced last year that we're pretty much getting toward the end of executing were mainly driven by operational centralization. And so, for instance, Polaris was just finally shuttered in April on the manufacturing lines that have been moved back east are just up and running now. Sorry, external noise here.
So the timing on those, you should start seeing a lot of that, the positive impact on cash flows starting to come through in the next quarter. Now, that additional tranche of savings that we have announced is combination of both shuttering of some facilities that Miguel talked about in SG&A cost reductions about 50-50 on that additional tranche of savings. The SG&A cost reductions are expected to be executed over the next couple of quarters. So we'll see them hitting immediately.
And the Sky reduction, I mean, our current plan is to have Sky shut down by the end of summer. So I think the next couple of quarters will be telling in terms of cash flow savings. Obviously, the production side, as it hits our cost of good takes a quarter or two to flow through following that. So we expect to see the margin improvement coming through toward the last quarter of the calendar year, maybe even a little bit in the September quarter as well.
So we haven't really seen it Mike impact other than the SG&A savings. We haven't really seen the stuff impact our financials yet but it's coming.
Miguel Martin -- Chief Executive Officer
I mean, Michael, one other point I would make is for example, closing Sky will save us $7 million a quarter in cash savings. So it's significant.
Michael Lavery -- Piper Sandler -- Analyst
OK, great. Thanks so much.
Miguel Martin -- Chief Executive Officer
You're welcome.
Operator
Thank you. The next question we have is from Andrew Carter from Stifel. Please go ahead.
Andrew Carter -- Stifel Financial Corp. -- Analyst
Yes, thanks. Good afternoon. So I just want to ask you have upgraded the target by $90 million and your adjusted EBITDA loss was $12 million in the quarter. So multiply that by four, $48 million loss.
You've got $90 million of cost savings. Are you saying that we should be getting to a $40 million EBITDA run rate, that's not even including Thrive and, or the tail end of the old savings. I just want to make sure I'm squaring and thinking this correctly. Thank you.
Miguel Martin -- Chief Executive Officer
Glen, do you want to walk through the staging and then I'll talk about how to think about the timing?
Glen Ibbott -- Chief Financial Officer
Sure. So...
Andrew Carter -- Stifel Financial Corp. -- Analyst
Not, not really timing guys. I was just -- I was actually saying, is that just an out of bounds, absolute number to think about that 90 plus or 48 million annualized loss, 45 over the next two years. Thanks.
Glen Ibbott -- Chief Financial Officer
I'm having a little trouble following your question there. Our SG&A, we expect to take it down on a quarterly basis to low 30, and we expect our margins to continue to be where they are at or improve over time through the centralization, just more efficiencies coming out of the operation. So in between the two, as you can see taking our SG&A down from roughly the 40 that it's at now down below 30 is going to take us most of the way on the cost reduction that we need to get deposit of. But even without depending on revenue growth.
Miguel Martin -- Chief Executive Officer
Yeah, I mean, I guess Andrew, I would, the only piece I'd add is, if you took Q3 and you made the presumption, particularly as it pertains to gross profit and adjusted EBITDA of what the rec business is up to. And you, I think presume a bit of steadiness to the other two pieces of business and you drop the SG&A savings. The Glen has mentioned you're there. I don't think -- I don't think it flips to a plus 40 and I would not want to profess that, but that's sort of the back of the envelope, math on why I think people should have some confidence in the adjusted EBITDA target.
Andrew Carter -- Stifel Financial Corp. -- Analyst
OK, thank you.
Miguel Martin -- Chief Executive Officer
Thank you.
Operator
[Operator instructions] The next question we have, which is Vivien Azer from Cowen. Please go ahead.
Unknown speaker -- Cowen and Company -- Analyst
Hi. Good afternoon. This is actually Victor on for Vivien Azer, and hank you for taking the questions.
Miguel Martin -- Chief Executive Officer
Of course, Victor. How are you doing?
Unknown speaker -- Cowen and Company -- Analyst
Good. How are you?
Miguel Martin -- Chief Executive Officer
Good.
Unknown speaker -- Cowen and Company -- Analyst
So given the recent comments by Germany's health and finance ministers on accelerating adult use legalization, can you frame the adult use opportunity there and offer your thoughts and the timing? Can you also offer some color and how you look to leverage your current competitive position in medical market to approach the opportunity there? Thank you.
Miguel Martin -- Chief Executive Officer
Sure, I'd be happy to. So I think that the first thing with all of these countries whether it's Germany, or whether it's Netherlands, or you pick any of these EU countries. It's a similar regulatory framework in terms of the regulators, and they start with production, and they get into manufacturing protocols, and all EU GMP and the different pieces of it. So those companies that have had success, and we're clearly one of them.
In Germany, we'll have the inside line on racks. The folks that are making that decision are the folks that were involved in medical. And I think we were a bit pleased with the speed in which that announcement was made. So it's really hard to pick timing in this.
But it doesn't change your strategic sort of approach, because everything that you're doing for medical will apply to what we hope is a quick rapid turnaround. And so you talked a little bit about modeling. Right now, the percentage of the adult population in Germany that's using cannabis is one-tenth that at point 1%, what we see in Canada, and so I think if you multiply that times the population, I think you can see the possible upside. But I think the thing we're most pleased about is we've had very productive conversation with the regulators, and a very conservative compliant approach, particularly on the production side, for Germany has bode well for us.
One, this little nuance about Germany that I'll share as to why it's so hard, their deviation provision on potency is only 10%. Most places in the world will allow a 20% deviation to label while you might have a 25 potency product, and you say, well, Miguel, that gives you plenty of sort of buffer of 2.5. Balance products are becoming quite popular. In many cases, they'll have a 10% THC number, which only gives you a 1% variation, which is a very difficult challenge for Germany.
So we think the leaders in Germany and they said we're one of them, we'll have the inside line. When that goes rack and we think it'll be subjective. We also would point out that there are a lot of eyes on Germany as the largest economy currently looking at it. And we think if they do go, it's going to have a halo effect on the other markets around that look at them from a regulatory standpoint.
Operator
Thank you. The next question we have is from John Zamparo from CIBC World Markets.
John Zamparo -- CIBC World Markets -- Analyst
Thanks. Good afternoon. I wanted to ask about M&A especially following the drive acquisition. It seems as though companies in the space are generally more capital constrained and in the past and they're seeing valuations compress more.
Does that give you more appetite to be active on acquisitions and keeping in mind you're going to look for human capital and brands that have connected, but is there any appetite to maybe accelerate the M&A strategy at this point?
Miguel Martin -- Chief Executive Officer
Yeah. I mean, John, it's a great question. So there's really been sort of two areas of M&A activity. One is the U.S.
And, I think we've been on record about, our play in the U.S., which is, a really clear one, that everything that we're doing around the world is going to have access points to the U.S. with an FDA regulation and with a thoughtful sort of approach. So I think we've been smart about not chasing in the U.S. on those really high valuations, around that.
Second piece is what you're mentioning is around Canada and this sort of question about, what type of companies do you go after? And with this credit markets, what do you get there. I really seen the dynamic nature of the business and renting market share, and buying companies just for their market share really is not, I think, a positive approach. And to the point you're making human capital does make a significant difference. And so, we are interested in finding teams that are really thoughtful, that are margin accretive, and that are focused on sustainably making money.
Thrive was one of those teams. And I think different than others it was my intent to find a great high functioning team, and then put them in charge of our rec business. And so, the CEO of that company, Jeff, Uber, who's a wonderful talent with his team, they're now going to run our Canadian rec business. And not only, I think they'll do that at a high level but also they bring a significant amount of innovation in genetics, that we can plug both into our rec business, international medical business and our domestic name business.
So as Glen mentioned, we've got a lot of flexibility on the balance sheet. And I think as things get tighter, access to capital is a key strategic advantage for any company, but particularly the cannabis company. And as things get, more affordable and make more sense, we would be there, particularly possibly around medical assets. And we really, without being too boastful, consider ourselves being one of the best if not the best, international medical cannabis company out there.
And so you know, those type of things are unique interest to us.
Operator
Thank you, sir. The next question we have is from Andrew Bond from Jefferies.
Unknown speaker -- Cowen and Company -- Analyst
Hi, good evening, Andrew Bond on line for Owen Bennett. Thanks for taking our questions. So just around Israel, definitely appreciate timing of shipments can be lumpy, but, the market still looks like it's going well. Just wanted to see if you could give a little more detail around how you see shipments trending for the rest of the year, if there's been any shipments since the end of the quarter today? Thank you.
Miguel Martin -- Chief Executive Officer
Yeah, I'll be happy to. I have spent a lot of time in Israel. And I've really had the honor of having worked in Israel a lot in my career. And so, I was most recently there.
A couple months ago, the situation with Israel is an interesting one. First and foremost, I think you have one of the most progressive and thoughtful regulators, globally, a very smart and thoughtful gentleman, Yuval Landschaft, who runs, what's called the IMCA, the regulator of cannabis in Israel. And you're starting to see, a lot of interest and obviously many of our competitors, shipping Canadian flower in Israel, and I've done that successfully, but you're also seeing a significant growth of local growers in Israel that are becoming successful growing their own cannabis. And I don't need to name the name of my competitors, but I was there and I've seen many of those grows and been respectful that.
So what you're seeing is in a country of 9 million people with about 130,000 patients that there is probably more supply than demand currently of good to great quality cannabis. And so, while it is always a challenge to navigate the very sort of high bar of the IMCA to get products into Israel, the results also now the internal pressure of having local grows, putting out high quality flour, particularly into that market. And so, we have said to everybody that, when we have a shipment to Israel, we will announce it. And so, in that statement, we have not had won yet this quarter.
But what I will say is that, the international market beyond Israel does go hot and cold as these regs are there. When you have a diversified business like we do and you can offset shipments that didn't happen to Israel, was shipping the larger shipment anyone's ever shipped into Poland or into Czech Republic or the significant growth you have that we have in Australia, you were able to balance out that. And I understand, from an analyst standpoint, it's hard not seeing that regular cadence into a market as important as Israel. But we think that when you have such breadths internationally overall it's going to smooth out.
And we have been pretty good at guiding toward how we think our international medical business is going to do. And that's, without some of the new markets that are coming online. So that's sort of it on Israel and I have great respect for what's going on there. And I think Israel beyond a place to sell Canadian cannabis will be a leader in genetics, in seed propagation, and starting at some point in export.
And so, I'm hopeful for that. And obviously there is a long history in Israel of biotech. So we are bullish, we're active in Israel. We at this point, don't have a shipment to tell you about.
Operator
Thank you. The next question we have is from Frederico Gomes from ATB.
Frederico Gomes -- ATB Capital Markets -- Analyst
Yeah, good afternoon, Miguel and Glen. Thanks for taking my questions. Just with the asset rationalization that you're doing right now, closing Sky. Could you remind us about the facilities that you have last right now? I mean, what's the capacity there in terms of cultivation? How much of that capacity are you currently utilizing and then as well what are your plans for Sky? Are you looking for a buyer for this app? Does can even have a market for selling facility that size given the conditions that we are seeing right now? And also some of your other facilities as well that you plan to close.
Thank you.
Miguel Martin -- Chief Executive Officer
Sure. So I'll go as a top-line overview and I'll let Glen correct me if I go astray in terms of the exact numbers on production clients by facility. So our primary facilities are River and Ridge. They are historical facilities.
They produce extremely high-quality cannabis. And as we focus on premium products, both domestically, internationally, rec and medical, they are proven facilities both with historical cultivars and new cultivars. We also retain the Whistler facility in BC that we all know produces some of the highest quality organic craft cannabis that is always done very well. And then staying in the Canadian market, we also are thrilled what we get with the Thrive acquisition, both are a tremendous indoor grow and a focused on concentrates as well as a significantly important outdoor grow that has a wonderful, cost of goods impact, particularly on fresh grows and for extracts and concentrates.
Internationally, we have a facility in Germany that we talked about. We also have our Nordic facility as well as our partnership in the Netherlands. And we feel confident that both in our internal network as well as the partnerships that we have with others, that we have more than what we need in terms of current demand with a proper sort of fixed cost. In terms of overall sort of we look at all that in terms of disposition, it's my expectation that Edmonton market, particularly around that airport authority, that sky, we'll have a great buyer and we'll obviously work with our business partners, both at the municipal level, like we have with the Polaris facility.
And the same thing would happen Valley is in a tremendous location from agriculture, and there'll be no issues in terms of finding a great buyer there. And we'll have to see what happens from CROs and others on interest on the MD&A. Glen, you want to talk a little bit about maybe production quantities or clean the rest up for Fred.
Glen Ibbott -- Chief Financial Officer
Yes, yes, Fred. So I mean, we have disclosed before the capacity of like River Ridge, Whistler, etc. And then they run in the neighborhood sort of like, I guess, stated capacity at River about 30,000 kilograms a year, Ridge above 5,000 kilogram a year, Whistler is about the 2,000 kilograms a year range. But more importantly, that's total biomass.
What we've been focused on in cultivation again, more and more expertise is obviously the yield and pass rates and specs for producing a 25% flower. You want all your batches to be hitting 25% flower certainly for value. So some of the -- one of the reasons that we're really focusing in River and Ridge is the exceptional pass rates, just hitting high levels of THC on a consistent basis, sometimes 100% of the batches in a particular period will be hitting there. So that's all really important for producing high-quality flower.
So it's great to state 30,000 kilograms. Our focus has been getting as much as possible at 30,000 to meet the high-quality specifications. What we're thrilled about with the Thrive team is this is like one of the best brands in Canada, and that's really obvious when you look at the company and their performance. But what's under the covers is just exceptional expertise in the cultivation side.
In the cultivar selection and your growing technique, it's a very scientific method that's backed up by decades of legacy growing experience. You get some folks that kind of came over as part of that team that are getting yields sometimes twice what we've been getting as the high-quality stuff. So we're excited to see even more coming out of our Whistler and Ridge. We think we've got plenty of capacity there.
And as far as it goes in Europe, I think you're asking about whether we could use the capacity there. In fact, we're starting to be concerned about capacity constraints in a couple of years, and it's not a problem. We've got expansion capability there, and we certainly can continue to export from Canada. But I put it in the other.
Don't fall asleep on the European opportunity there. We need everything we can get out of our European facilities, and we're still going to need to supply from Canada over the next couple of years. So no problems with the international facilities at all.
Operator
Thank you, sir. The next question we have is from Matt Bottomley from Canaccord Genuity. Please go ahead.
Matt Bottomley -- Canaccord Genuity -- Analyst
Good evening. Thanks for taking the questions. I just wanted to go back to one of the questions. I think Andrew was asking just about the change in the increase in the anticipated savings.
Apologies toward the end there my line was cutting out, but I think I caught most of it. The guidance on reaching a run rate of positive EBITDA, it hasn't changed, but you're adding at the midpoint about 90 million of savings. So I understand that, from a standpoint of what you previously telegraph, maybe that sort of breakeven by sort of the midpoint of adjusted EBITDA, but adding those 90 million of savings. And when you say annualized, is that the last month or the last week of that particular point in time, let's call it midway through fiscal '23, when that will be achieved, and then the actual cash part of it will be lagging or are we expecting some sort of step function increase into the adjusted EBITDA at that point in time given the significant increase in these initiative?
Miguel Martin -- Chief Executive Officer
Glen, you want to start?
Glen Ibbott -- Chief Financial Officer
Yes, I'll start to unpack that a little bit. So when we see annualized run rate, we're making a number a series of decisions, some of them happening today, some of them happening in June, and then etc., through the summer, and they execute a the shutdown facility obviously takes a number of months. So what we were targeting is that by the time we have to Q2, that all the decisions are done, the Saudis are shuttered that are set to be shuttered. And everything's been executed so that we're running at a rate that is EBITDA positive and that the savings have been captured by them.
So looking forward, I think it's the right way to look at this on a run rate basis, annualized savings. How it differs from before? As we resize this to get to positive EBITDA even at current revenue. So if we took our Q3 revenues of $50 million, just to be dead certain we can hit this EBITDA target we said, what do we need to do to the business to make sure that even at a rate like this, which we don't expect to persist, but even at a rate like this, what would it take to be positive? So it's a bigger step, and we take that before. A lot of this shows up in cash savings, or why we're telling you the big numbers, is that's all cash savings.
Obviously, when you cut it out of operational savings, Miguel mentioned Sky it's 7 million a quarter. So there's almost $30 million annually of cash saving face shattering that facility. So that's, I think, if you want to think about this sort of the run rate here. We've got a couple quarters here of continuing hard work, to execute all these savings, but we've got an exceptionally crisp plan and we're executing on it.
So cost of goods, obviously, the margins will start to improve, you would expect over time. There's definitely headwind in the market, you know that inflation, etc., etc. But we think we're going to at least cover that if not more through these cross rationalizations and the SG&A cuts to get us to positive EBITDA in a quarter that looks like Q3.
Miguel Martin -- Chief Executive Officer
Yes, I guess the other couple points I would make is one is, why you hate to do these things. This is a team that has a bit of experience now doing it. It's also a team with some new leaders in place that come from a background, whether that's our new head of operations, who comes from Kraft and PNG, or a new Head of HR, who comes from Hilton, AmEx. So they're -- this is a different management team that's running through this.
The second part is, we're going to continue to give updates the best we see it. And I understand while some people may say, well, Miguel, geez, I understand these enhance savings, why wouldn't you increase your raise your guidance overall. And I'm a bit sensitive to the history of the Company saying, it's going to do something, particularly around profitability and savings and not getting there. Then Glen's right and talking about the structural differences of this based upon the current revenue.
So that's why I want to see a little bit of the execution. I want to see a little bit of the timing. It's a bit of a a wonky time period with inflation and some other aspects going on. If we get closer with greater clarity, of course, we'll be transparent and then people know that, but we want to be a bit conservative here in terms of how we provide guidance on this, because I am sensitive to how people have looked at historical statements on the company.
Operator
Thank you, sir. So our final question comes from Doug Miehm from RBC Capital Markets.
Doug Miehm -- RBC Capital Markets -- Analyst
Yeah, thank you. I just wanted to go back to this so that I'm sure I understand Aurora Sky. So it's operating at 25% capacity today. I'm just curious then, what is it making and what are the revenues roughly coming out of that site? And is it losing $10 million to $20 million a year or even more by the sounds of it?
Miguel Martin -- Chief Executive Officer
So Doug, let me go, I mean, put up with this a little history bit. Sky was originally created as many people on this call know better than I, to be the one of the largest global automated, almost completely automated facilities to grow, what I would call mid-tier flower. And the reason that was OK, because at that time a 16 or 18 potency product was more than acceptable for the Canadian market and some other markets. As the consumer evolved very quickly, bud quality density, moisture, all of those things, and then potency and terps and all these other sort of core character attributes did not lend itself to automation.
And we are not the only one that sort of talked about that. So Sky had to be retrofitted very rapidly. And as you might imagine, a facility of that nature has a different sort of profile genetically of cultivars that do well. And so, when you couple the rapid sort of expansion of what a consumer wanted, particularly in the rec business and with the need for new cultivars scale of that size became a bit of an impediment.
And so, we pivoted sky and made massive improvements and absolute kudos to the folks that worked there, in order to find a home for that product, particularly internationally, where you would have higher margins that would sustain the overall fixed cost of that facility. And as you might imagine, whether it's utility cost, whether it's maintenance, whether it's all of those things that were created under a past sort of scenario, Sky became really untenable. And so, we took it down to 25%, and yes, it was losing a significant amount of money as we had to allocate the overall costs of that facility against the product that was created there, which was almost entirely flour. And as flour prices, particularly in the rec market cratered for everybody, it became this ongoing piece.
And then, when Israel particularly became a little bit more, I would say, less consistent, it really became untenable. And when overall we took our rec business down to what we think is sustainable in terms of focus on premium, it just didn't make sense. And so, that's really how we got to where we got to. And I think, we have been pretty proactive in reducing our footprint, whether that was Sky, whether that was previously with Sun, and Valley and others.
And we continue to do what I think most would say is the right thing for the business to have the right cost structure overall for the amount of cannabis we need. And lastly is, as you see an expansion into other items, concentrate, infuse pre-rolls, vapes, ingestible in the Canadian market, massive facilities, just producing flour, just don't make sense to the tune of millions and millions of dollars of losses, if you keep them open.
Operator
Thank you, sir. Ladies and gentlemen, we have reached the end of our question-and-answer session. And I would like to turn the call back to Miguel Martin for closing remarks. Please go ahead, sir.
Miguel Martin -- Chief Executive Officer
Well, I want to thank everybody for taking the time to continue to listen to Aurora story. We've never been more confident about the targets we have in front of us. Hopefully, people understand we continue to make the tough calls based on what we think is right for the shareholders. If you look at the balance sheet, if you look at our core cannabis business, which is international medical, they've never been stronger.
And so we're excited about the quarters and we appreciate all of your coverage and interest in Aurora. Thank you very much.
Operator
[Operator signoff]
Duration: 55 minutes
Call participants:
Ananth Krishnan -- Vice President of Corporate Development and Investor Relations
Miguel Martin -- Chief Executive Officer
Glen Ibbott -- Chief Financial Officer
Michael Lavery -- Piper Sandler -- Analyst
Andrew Carter -- Stifel Financial Corp. -- Analyst
Unknown speaker -- Cowen and Company -- Analyst
John Zamparo -- CIBC World Markets -- Analyst
Frederico Gomes -- ATB Capital Markets -- Analyst
Matt Bottomley -- Canaccord Genuity -- Analyst
Doug Miehm -- RBC Capital Markets -- Analyst
More ACB analysis
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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) Q3 2022 Earnings Call May 12, 2022, 5:00 p.m. Operator [Operator signoff] Duration: 55 minutes Call participants: Ananth Krishnan -- Vice President of Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Michael Lavery -- Piper Sandler -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Unknown speaker -- Cowen and Company -- Analyst John Zamparo -- CIBC World Markets -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Doug Miehm -- RBC Capital Markets -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. OCO represents a capital-light, long-term, revenue growth opportunity that we believe makes Aurora unique and can drive success by enabling our licensing partners to deliver a continuous stream of innovation to the market. | Operator [Operator signoff] Duration: 55 minutes Call participants: Ananth Krishnan -- Vice President of Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Michael Lavery -- Piper Sandler -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Unknown speaker -- Cowen and Company -- Analyst John Zamparo -- CIBC World Markets -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Doug Miehm -- RBC 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) Q3 2022 Earnings Call May 12, 2022, 5:00 p.m. The change was mainly due to variable cadence from quarter to quarter of shipments in Israel, and partially due to lower consumer cannabis net revenue because of competitive pressures across the portfolio, coupled with retail store closures during the quarter in key provinces that impacted our premium offerings. | Operator [Operator signoff] Duration: 55 minutes Call participants: Ananth Krishnan -- Vice President of Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Michael Lavery -- Piper Sandler -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Unknown speaker -- Cowen and Company -- Analyst John Zamparo -- CIBC World Markets -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Doug Miehm -- RBC 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) Q3 2022 Earnings Call May 12, 2022, 5:00 p.m. Today, we are announcing that we have identified an additional $70 million to $90 million of savings within that same timeframe, for a total of $150 million to $170 million of savings annually. | Operator [Operator signoff] Duration: 55 minutes Call participants: Ananth Krishnan -- Vice President of Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glen Ibbott -- Chief Financial Officer Michael Lavery -- Piper Sandler -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Unknown speaker -- Cowen and Company -- Analyst John Zamparo -- CIBC World Markets -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst Matt Bottomley -- Canaccord Genuity -- Analyst Doug Miehm -- RBC 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) Q3 2022 Earnings Call May 12, 2022, 5:00 p.m. Miguel Martin -- Chief Executive Officer I mean, Michael, one other point I would make is for example, closing Sky will save us $7 million a quarter in cash savings. |
36552.0 | 2022-05-11 00:00:00 UTC | 3 Oversold Penny Stocks to Buy Now | ACB | https://www.nasdaq.com/articles/3-oversold-penny-stocks-to-buy-now | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Penny stocks provide excellent secular growth prospects, which could bypass the current bear market. There are a few oversold penny stocks on the market, and I’d urge investors to take advantage!
Aurora Cannabis (NASDAQ:ACB) – Aurora has achieved economies of scale, allowing it to dominate the market. Additionally, the stock is undervalued after an unjustified sell-off.
Gaslog Partners (NYSE:GLOP) – A 99.4% quarterly fleet uptime is well deserved. The firm is well-positioned to take advantage of lucrative contracts. Also, GLOP is significantly undervalued on a normalized basis.
Platinum Group Metals (NYSE:PLG) – Insider buying is heating up! Furthermore, PLG’s Waterberg project could yield life-changing results as it aims to tap into the renewable energy space.
Source: Vitalii Vodolazskyi / Shutterstock.com
I personally know a few penny stock millionaires. Then again, I also know a few investors that lost most of their money after investing in penny stocks. First of all, diversifying into a bunch of penny stocks won’t work; that’s just gambling. What you should be doing is looking for diamonds in the rough.
The best way to explain this would be by considering skewness. Penny stock returns are more asymmetrical than mature stocks, thus, providing significant upside potential but also downside risk.
The approach I use when screening for penny stocks is to look for secular growth. How does that work? Well, fundamental change is the primary indicator of secular growth. From there onwards, you need to look for “best-in-class” stocks that you believe will dominate the given business environment via a solid business model.
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I discovered three excellent penny stocks that are oversold; let’s take a look at them.
ACB Aurora Cannabis $2.62
GLOP Gaslog Partners $4.92
PLG Platinum Group Metals $1.34
Penny Stocks: Aurora Cannabis (ACB)
Source: Ralf Liebhold / Shutterstock.com
The pessimism surrounding Aurora Cannabis (NASDAQ:ACB) stock is astounding. I mean, here we have a company that’s achieved economies of scale with a gross margin of 53%, yet investors are doubting its ability to produce future profits.
Aurora’s dominating the local and international markets with a full-on vertically integrated business model, which could see it reign supreme for years to come.
ACB stock is trading at a bargain. The stock’s price-to-sales and price-to-book ratios are trading at normalized discounts of 43.27% and 31.98%, respectively. Additionally, the stock’s trading at a 1-month relative strength of 29.60, which suggests that it’s oversold.
Gaslog Partners (GLOP)
Gaslog Partners (NYSE:GLOP) stock is trading at a massive discount; it’s as simple as that. The company’s midstream exposure to the liquified natural gas industry leaves it in a strong position as the barriers to entry are high. Additionally, GLOP is receiving systemic tailwinds from rising profitability in the energy space. Thus, prompting me to believe that it could form a medium-term momentum pattern.
The company beat its fourth-quarter earnings target by 6 cents per share. Behind its quarterly success was 99.4% in fleet uptime, exploitation of an 11-month charter for GasLog Sydney, and rising demand for its carriers amid an ex-Russia trade infrastructure. Furthermore, the company retired $37 million of its debt during the quarter, subsequently increasing investors’ residual worth.
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GLOP stock is undervalued on a normalized basis. First off, Gaslog’s forward price-to-earnings ratio is trading at a 56.64% discount, implying that the market underscores its earnings potential. And in addition, Gaslog stock is trading at a 42.75% discount-to-book value, meaning that the company’s fair equity value exceeds its market value.
Penny Stocks: Platinum Group Metals (PLG)
Source: corlaffra / Shutterstock
Platinum Group Metals (NYSE:PLG) is a South African-based precious metals exploration company.
The firm’s primary objective is to serve the development of the renewable energy space with low-cost PGM group deposits. Furthermore, the company’s seeking exposure to gold deposits to diversify its risk.
PLG is still in early-stage exploration, meaning this is a binary play for investors. If its Waterberg project lives up to expectation, we’ll likely see its stock erupt.
Lastly, PLG stock is receiving lots of insider activity. The company’s management has secured $5.9 million worth of the firm’s shares during the past three months, indicating that there’s much internal optimism about the firm’s financial prospects.
On the date of publication, Steve Booyens did not hold any position (either directly or indirectly) 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.
The post 3 Oversold Penny Stocks to Buy Now 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. | Aurora Cannabis (NASDAQ:ACB) – Aurora has achieved economies of scale, allowing it to dominate the market. ACB Aurora Cannabis $2.62 GLOP Gaslog Partners $4.92 PLG Platinum Group Metals $1.34 Penny Stocks: Aurora Cannabis (ACB) Source: Ralf Liebhold / Shutterstock.com The pessimism surrounding Aurora Cannabis (NASDAQ:ACB) stock is astounding. ACB stock is trading at a bargain. | ACB Aurora Cannabis $2.62 GLOP Gaslog Partners $4.92 PLG Platinum Group Metals $1.34 Penny Stocks: Aurora Cannabis (ACB) Source: Ralf Liebhold / Shutterstock.com The pessimism surrounding Aurora Cannabis (NASDAQ:ACB) stock is astounding. Aurora Cannabis (NASDAQ:ACB) – Aurora has achieved economies of scale, allowing it to dominate the market. ACB stock is trading at a bargain. | ACB Aurora Cannabis $2.62 GLOP Gaslog Partners $4.92 PLG Platinum Group Metals $1.34 Penny Stocks: Aurora Cannabis (ACB) Source: Ralf Liebhold / Shutterstock.com The pessimism surrounding Aurora Cannabis (NASDAQ:ACB) stock is astounding. Aurora Cannabis (NASDAQ:ACB) – Aurora has achieved economies of scale, allowing it to dominate the market. ACB stock is trading at a bargain. | Aurora Cannabis (NASDAQ:ACB) – Aurora has achieved economies of scale, allowing it to dominate the market. ACB Aurora Cannabis $2.62 GLOP Gaslog Partners $4.92 PLG Platinum Group Metals $1.34 Penny Stocks: Aurora Cannabis (ACB) Source: Ralf Liebhold / Shutterstock.com The pessimism surrounding Aurora Cannabis (NASDAQ:ACB) stock is astounding. ACB stock is trading at a bargain. |
36553.0 | 2022-05-10 00:00:00 UTC | Evolus, Inc. (EOLS) Reports Q1 Loss, Tops Revenue Estimates | ACB | https://www.nasdaq.com/articles/evolus-inc.-eols-reports-q1-loss-tops-revenue-estimates | nan | nan | Evolus, Inc. (EOLS) came out with a quarterly loss of $0.27 per share versus the Zacks Consensus Estimate of a loss of $0.41. This compares to earnings of $0.19 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 34.15%. A quarter ago, it was expected that this company would post a loss of $0.20 per share when it actually produced a loss of $0.29, delivering a surprise of -45%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Evolus, Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $33.91 million for the quarter ended March 2022, surpassing the Zacks Consensus Estimate by 12.03%. This compares to year-ago revenues of $12.24 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 theearnings call
Evolus, Inc. Shares have added about 57% since the beginning of the year versus the S&P 500's decline of -16.3%.
What's Next for Evolus, Inc.
While Evolus, Inc. 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 Evolus, 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 -$0.22 on $37.5 million in revenues for the coming quarter and -$1.05 on $149.48 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 34% 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 March 2022. The results are expected to be released on May 12.
This company is expected to post quarterly loss of $0.16 per share in its upcoming report, which represents a year-over-year change of +33.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Aurora Cannabis Inc.'s revenues are expected to be $40.58 million, down 6.9% 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 March 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report 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 theearnings call Evolus, Inc. Shares have added about 57% since the beginning of the year versus the S&P 500's decline of -16.3%. | Aurora Cannabis Inc. (ACB): Free Stock Analysis Report One other stock from the same industry, Aurora Cannabis Inc. (ACB), is yet to report results for the quarter ended March 2022. Evolus, Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $33.91 million for the quarter ended March 2022, surpassing the Zacks Consensus Estimate by 12.03%. | One other stock from the same industry, Aurora Cannabis Inc. (ACB), is yet to report results for the quarter ended March 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report Evolus, Inc., which belongs to the Zacks Medical - Products industry, posted revenues of $33.91 million for the quarter ended March 2022, surpassing the Zacks Consensus Estimate by 12.03%. | One other stock from the same industry, Aurora Cannabis Inc. (ACB), is yet to report results for the quarter ended March 2022. Aurora Cannabis Inc. (ACB): Free Stock Analysis Report While Evolus, Inc. Has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? |
36554.0 | 2022-05-05 00:00:00 UTC | Aurora Cannabis Is Set for Secular Growth. Here’s What the Future Holds for ACB Stock. | ACB | https://www.nasdaq.com/articles/aurora-cannabis-is-set-for-secular-growth.-heres-what-the-future-holds-for-acb-stock. | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Aurora Cannabis (NASDAQ:ACB) stock is one of the most overlooked assets on the market; it’s as simple as that. Many investors are discouraged by Cannabis sector stocks after their abrupt drawdown during the past year. However, let me remind you of the market’s golden rule: “buy low, sell high.” If you haven’t already done so, consider buying the dip on ACB stock.
Aurora really is a “best-in-class” pick. First of all, the company exhibits the largest gross profit margins (53%) in the cannabis industry, suggesting that economics of scale is part of its furniture. Aurora’s achieved this feat by delivering a wide breadth of products spanning the medical and recreational markets. Furthermore, the company’s vertically integrated business model provides it with significant pricing and bargaining power. Its model flows from four mega-production facilities all the way to an online medical platform, enabling it to benefit from various synergies.
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Another aspect to consider is Aurora’s growth in the international markets. The company’s an upstream market leader in countries like Israel, Germany, France, Poland and the United Kingdom. The firm’s global footprint lets it smooth out revenue by dodging single-jurisdiction regulatory surprises and coherent economic shocks.
Furthermore, BDSA forecasts Cannabis sales to expand by 22% for the full-year amid robust support from emerging markets. Aurora’s market stronghold suggests that its economic benefits from a rise in sales will likely exceed its peers, thus, proliferating its intrinsic value. As a matter of fact, the stock’s undervalued on a normalized basis. ACB stock is trading at a normalized price-sales discount of 37.35% and a price-book discount worth 24.86%, implying that market participants haven’t taken note of ACB’s latest financial performance.
I’m aware that the current market environment isn’t receptive to growth stocks, but Aurora has that ex-factor. Moreover, the stock’s underappreciated, with a relative strength index (RSI) reading of 44.52. Thus, I’m going for it on this one!
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Steve Booyens did not hold any position (either directly or indirectly) 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.
The post Aurora Cannabis Is Set for Secular Growth. Here’s What the Future Holds for ACB Stock. 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. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (NASDAQ:ACB) stock is one of the most overlooked assets on the market; it’s as simple as that. However, let me remind you of the market’s golden rule: “buy low, sell high.” If you haven’t already done so, consider buying the dip on ACB stock. ACB stock is trading at a normalized price-sales discount of 37.35% and a price-book discount worth 24.86%, implying that market participants haven’t taken note of ACB’s latest financial performance. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (NASDAQ:ACB) stock is one of the most overlooked assets on the market; it’s as simple as that. However, let me remind you of the market’s golden rule: “buy low, sell high.” If you haven’t already done so, consider buying the dip on ACB stock. ACB stock is trading at a normalized price-sales discount of 37.35% and a price-book discount worth 24.86%, implying that market participants haven’t taken note of ACB’s latest financial performance. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (NASDAQ:ACB) stock is one of the most overlooked assets on the market; it’s as simple as that. ACB stock is trading at a normalized price-sales discount of 37.35% and a price-book discount worth 24.86%, implying that market participants haven’t taken note of ACB’s latest financial performance. However, let me remind you of the market’s golden rule: “buy low, sell high.” If you haven’t already done so, consider buying the dip on ACB stock. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (NASDAQ:ACB) stock is one of the most overlooked assets on the market; it’s as simple as that. However, let me remind you of the market’s golden rule: “buy low, sell high.” If you haven’t already done so, consider buying the dip on ACB stock. ACB stock is trading at a normalized price-sales discount of 37.35% and a price-book discount worth 24.86%, implying that market participants haven’t taken note of ACB’s latest financial performance. |
36555.0 | 2022-05-04 00:00:00 UTC | 2 Marijuana Stocks You Can Buy and Hold for the Next Decade | ACB | https://www.nasdaq.com/articles/2-marijuana-stocks-you-can-buy-and-hold-for-the-next-decade | nan | nan | The cannabis industry has gained prominence in the past five years, and the future could be even more exciting. According to some estimates, the legal pot market in North America will expand at a compound annual growth rate of 16.6% through 2028.
And it likely won't stop there. Investors can cash in on this opportunity by investing in the right cannabis companies. Two excellent picks to consider are Innovative Industrial Properties (NYSE: IIPR) and Trulieve Cannabis (OTC: TCNNF).
1. Innovative Industrial Properties
Innovative Industrial Properties can be a great source of growth and dividends. As a real estate investment trust (REIT) that focuses on the medical cannabis sector, the company must distribute 90% of its taxable income as dividends. In our current inflationary environment, dividends can come in handy as a hedge against rising prices. But there is more to this company than its 4.84% yield.
Image source: Getty Images.
Innovative Industrial Properties purchases real estate assets from medical cannabis companies and leases these back to the sellers. These transactions help pot companies acquire the capital they often need to grow their operations in an environment where it can be tough to access traditional banking services due to federal marijuana laws.
Innovative Industrial Properties benefits when it expands its portfolio of real estate assets and collects stable and predictable streams of income from its clients. Even if traditional banking services were available to cannabis companies, the REIT provides a creative alternative to the stringent requirements and high-interest loans that financial services typically offer.
Even if marijuana is legalized at the federal level in the U.S. within the next decade, I expect Innovative Industrial Properties to continue to thrive.
The company's shares have gotten hammered in the past year, but it continues to deliver solid financial results. In 2021, total revenue increased by about 75% year over year to $204.6 million. In addition, the REIT's net income grew by about 75% to $112.6 million. Quarterly top-line growth has slowed, which might be one reason behind its recent poor performance. But there remains plenty of room to expand.
Currently, the company owns 105 properties in 19 states. Medical cannabis is legal in 38 states and Washington, D.C. As Innovative Industrial Properties continues to make headway, expect its revenue growth rates to stabilize. All in all, it looks set to profit from the growth of the cannabis industry in North America, and that's why it's an excellent pot stock to consider holding for the next 10 years.
2. Trulieve Cannabis
Trulieve Cannabis is practically in a class of its own among pure-play pot growers in North America. The company ended 2021 with a U.S. market-leading 162 dispensaries. On an adjusted basis, it has been profitable for 16 consecutive quarters. That might not seem like a big deal, but many cannabis companies in the U.S. and Canada have struggled to be profitable even for two straight quarters.
Trulieve Cannabis has now done it 16 times in a row. What's the company's secret? In my view, one thing that sets it apart is prudent capital allocation. Many pot companies chose to expand their operations by making acquisition after acquisition.
The problem is that these companies were typically consistently unprofitable and did not have the cash necessary to fund these shopping sprees, meaning they often had to rely on dilutive forms of financing. Aurora Cannabis is an excellent example of this strategy, and things have not worked out well for the Canada-based pot grower.
By contrast, Trulieve Cannabis focused much of its efforts (and cash) on establishing a strong presence in Florida. Once it became the leader in the cannabis market in the Sunshine State, it substantially expanded its operations elsewhere thanks in large part to a strategic acquisition. In October, it acquired Harvest Health and Recreation in an all-stock transaction valued at $2.1 billion. Harvest Health is headquartered in Arizona and is prominent in the West and Northeast.
That is a nice addition to Trulieve's dominance in Florida. While the company is dealing with short-term issues that have caused its stock to drop in the past year, including slowing revenue growth and rising expenses due to the recent acquisition, this new combined entity is now in an even stronger position to profit from the growth of the cannabis sector in the U.S.
Patient investors probably can't go wrong with Trulieve Cannabis right 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 Innovative Industrial Properties 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. | These transactions help pot companies acquire the capital they often need to grow their operations in an environment where it can be tough to access traditional banking services due to federal marijuana laws. Innovative Industrial Properties benefits when it expands its portfolio of real estate assets and collects stable and predictable streams of income from its clients. Medical cannabis is legal in 38 states and Washington, D.C. As Innovative Industrial Properties continues to make headway, expect its revenue growth rates to stabilize. | Innovative Industrial Properties Innovative Industrial Properties can be a great source of growth and dividends. Innovative Industrial Properties purchases real estate assets from medical cannabis companies and leases these back to the sellers. Medical cannabis is legal in 38 states and Washington, D.C. As Innovative Industrial Properties continues to make headway, expect its revenue growth rates to stabilize. | Medical cannabis is legal in 38 states and Washington, D.C. As Innovative Industrial Properties continues to make headway, expect its revenue growth rates to stabilize. Trulieve Cannabis Trulieve Cannabis is practically in a class of its own among pure-play pot growers in North America. While the company is dealing with short-term issues that have caused its stock to drop in the past year, including slowing revenue growth and rising expenses due to the recent acquisition, this new combined entity is now in an even stronger position to profit from the growth of the cannabis sector in the U.S. | All in all, it looks set to profit from the growth of the cannabis industry in North America, and that's why it's an excellent pot stock to consider holding for the next 10 years. Many pot companies chose to expand their operations by making acquisition after acquisition. The Motley Fool has positions in and recommends Innovative Industrial Properties and Trulieve Cannabis Corp. |
36556.0 | 2022-05-02 00:00:00 UTC | CANADA STOCKS-Toronto index falls as commodity-linked stocks weigh | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-falls-as-commodity-linked-stocks-weigh | nan | nan | By Amal S
May 2 (Reuters) - Canada's main stock index fell on Monday, as a slide in commodity prices weighed on energy and mining shares, while investors focused on U.S. Federal Reserve's meeting later this week.
At 9:40 a.m. ET (13:40 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 61.3 points, or 0.3%, at 20,700.7.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 1.3% as gold prices slipped 1% toward 2-1/2-month lows, with investors bracing for a large interest rate hike by the Fed, as it seeks to contain soaring inflation. GOL/
The energy sector .SPTTEN fell 0.8% as oil prices slumped, with concerns over weak economic growth in top importer China overshadowing fears of supply getting crimped by a potential European Union ban on Russian crude. O/R
"It's a tough time for equity markets in general and ... Canada right now, with gold getting hammered and crude oil down again, it's a rocky start to the month for Canadian stocks," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Healthcare sector fell 0.9% with pot producers Canopy Growth Corp WEED.TO, Aurora Cannabis ACB.TO among top drags, while the financials sector .SPTTFS slipped 0.3%.
Fed policymakers look set to deliver a series of aggressive rate hikes at least until the summer, with traders seeing a 92.8% chance of a 50-basis point hike on Wednesday when it will release its policy decision.
The TSX benchmark index recorded its worst monthly performance in April in over two years, hit by disappointing earnings from some major U.S. companies and concerns around soaring inflation and rising interest rates.
Market focus is also on domestic earnings from major miners and technology companies including Barrick Gold ABX.TO, Shopify Inc SHOP.TO and Constellation Software CSU.TO later this week.
(Reporting by Amal S in Bengaluru; Editing by Rashmi Aich)
((Amal.S@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 3677;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Healthcare sector fell 0.9% with pot producers Canopy Growth Corp WEED.TO, Aurora Cannabis ACB.TO among top drags, while the financials sector .SPTTFS slipped 0.3%. By Amal S May 2 (Reuters) - Canada's main stock index fell on Monday, as a slide in commodity prices weighed on energy and mining shares, while investors focused on U.S. Federal Reserve's meeting later this week. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 1.3% as gold prices slipped 1% toward 2-1/2-month lows, with investors bracing for a large interest rate hike by the Fed, as it seeks to contain soaring inflation. | Healthcare sector fell 0.9% with pot producers Canopy Growth Corp WEED.TO, Aurora Cannabis ACB.TO among top drags, while the financials sector .SPTTFS slipped 0.3%. GOL/ The energy sector .SPTTEN fell 0.8% as oil prices slumped, with concerns over weak economic growth in top importer China overshadowing fears of supply getting crimped by a potential European Union ban on Russian crude. The TSX benchmark index recorded its worst monthly performance in April in over two years, hit by disappointing earnings from some major U.S. companies and concerns around soaring inflation and rising interest rates. | Healthcare sector fell 0.9% with pot producers Canopy Growth Corp WEED.TO, Aurora Cannabis ACB.TO among top drags, while the financials sector .SPTTFS slipped 0.3%. By Amal S May 2 (Reuters) - Canada's main stock index fell on Monday, as a slide in commodity prices weighed on energy and mining shares, while investors focused on U.S. Federal Reserve's meeting later this week. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 1.3% as gold prices slipped 1% toward 2-1/2-month lows, with investors bracing for a large interest rate hike by the Fed, as it seeks to contain soaring inflation. | Healthcare sector fell 0.9% with pot producers Canopy Growth Corp WEED.TO, Aurora Cannabis ACB.TO among top drags, while the financials sector .SPTTFS slipped 0.3%. By Amal S May 2 (Reuters) - Canada's main stock index fell on Monday, as a slide in commodity prices weighed on energy and mining shares, while investors focused on U.S. Federal Reserve's meeting later this week. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 1.3% as gold prices slipped 1% toward 2-1/2-month lows, with investors bracing for a large interest rate hike by the Fed, as it seeks to contain soaring inflation. |
36557.0 | 2022-05-01 00:00:00 UTC | Little Downside, but Little Upside, With Aurora Cannabis Stock | ACB | https://www.nasdaq.com/articles/little-downside-but-little-upside-with-aurora-cannabis-stock | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Down by around two-thirds in the past year, Aurora Cannabis (ACB) may look cheap at today’s prices.
Yet even when factoring for projected cost savings next year, shares remain pricey.
There may be reason to buy it as a bet on U.S. pot reform, but outside of that little reason to buy.
Source: Ralf Liebhold / Shutterstock.com
Like other Canada-based pot stocks, Aurora Cannabis (NASDAQ:ACB) has steadily dropped in price in the past year. Over the last twelve months, ACB stock has declined by around two-thirds (66.3%). Year-to-date (YTD) alone, it’s dropped by around 47%. With this big plunge, you may think Aurora is at the point where it’s a value play.
But using traditional valuation metrics, it’s tough to say it is a value stock. It trades at a discount to its book value, yet much of its overall book value is made up of accounting goodwill. On a tangible book value basis, there’s a slight premium rather than a big discount.
How about being cheap relative to earnings? It’s hard to make that argument, either. Although there may be another reason for buying (unrelated to fundamentals), think again if you’re buying this in the hopes increased profitability sends it soaring.
ACB Aurora Cannabis $3.08
ACB Stock and Upcoming Improvements to Adjusted EBITDA
Above, we’ve established why Aurora Cannabis isn’t a bargain, in terms of it selling at a discount to its net asset value. Now, let’s see why it’s pricey, relative to earnings. Recent remarks from CEO Miguel Martin have hinted that a big jump in profitability is just around the corner.
At the recent Benzinga Cannabis Capital Conference, Martin said he was confident that Aurora would become profitable on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis by the end of this fiscal year (June 2022). Granted, positive EBITDA isn’t the same as net income.
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Positive EBITDA, however, would be a big step in the right direction. Not only that, having positive EBITDA would make it easier to calculate a fair valuation for ACB stock. So, to what degree could Aurora’s EBITDA numbers improve over the next year?
It’s all laid out in a February 2022 investor presentation. Through cost cutting, management believes it can increase EBITDA by between 15 million CAD and 20 million CAD (around $11.8 million-$15.7 million), compared to the 9 million CAD ($7.1 million) EBITDA loss it reported for the December 2021 quarter. This implies a swing to $8.6 million in positive EBITDA per quarter, or $34.4 million on an annualized basis.
Not Enough to Move the Needle
Cost savings may result in big improvements to its profitability. Will it have a big impact on the ACB stock price? Probably not. Even when taking this swing from negative to positive adjusted EBITDA, shares are still sporting a premium valuation.
At least, based on the enterprise value/EBITDA (EV/EBITDA) metric. Right now, Aurora has a market capitalization of $655.5 million. Add $327.75 million in debt, and subtract $264.2 million in cash, and you get an enterprise value of around $719 million.
Assuming the cost savings arrive, and adjusted EBITDA hits $34.4 million per year, Aurora Cannabis still trades at a high multiple (20.9x). Sure, if growth was high enough, such a valuation could be justified. However, that’s not the case at present. Per analyst estimates, revenue growth is expected to decline this fiscal year (-4%). Next fiscal year, revenue is only expected to rise by 14.5%.
Admittedly, there may be more cost saving opportunities in the future. For instance, it could achieve more cost synergies, once its pending deal to buy TerraFarma closes. With its large cash position, it could also make other deals that are accretive to earnings.
Bottom Line: Minimal Upside, Minimal Downside, Not Worth Buying
Even if there are more profitability improvements ahead, this may not be enough to grow Aurora’s valuation, either. Rising interest rates continue to put pressure on valuations. The stock is far more likely to see multiple compression than multiple expansion.
Then again, considering it trades just over tangible book, downside risk may be minimal. Assuming cash burn is an issue of the past? Chances are it won’t fall far below the net value of its tangible assets ($2.81 per share). Despite its rich multiple, it may not be at risk of dropping in price by another two-thirds.
Still, minimal downside doesn’t mean much, in light of limited upside potential. You could make the argument that these characteristics make it worth buying, if only as a long-shot bet on U.S. pot reform. Like with other pot stocks, it moves wildly whenever legalization comes up in Washington.
Outside of this, however, there’s little reason to buy ACB stock today.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
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On the date of publication, Thomas Niel 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.
The post Little Downside, but Little Upside, With Aurora Cannabis Stock 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. | Source: Ralf Liebhold / Shutterstock.com Like other Canada-based pot stocks, Aurora Cannabis (NASDAQ:ACB) has steadily dropped in price in the past year. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Down by around two-thirds in the past year, Aurora Cannabis (ACB) may look cheap at today’s prices. Over the last twelve months, ACB stock has declined by around two-thirds (66.3%). | Source: Ralf Liebhold / Shutterstock.com Like other Canada-based pot stocks, Aurora Cannabis (NASDAQ:ACB) has steadily dropped in price in the past year. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Down by around two-thirds in the past year, Aurora Cannabis (ACB) may look cheap at today’s prices. Over the last twelve months, ACB stock has declined by around two-thirds (66.3%). | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Down by around two-thirds in the past year, Aurora Cannabis (ACB) may look cheap at today’s prices. ACB Aurora Cannabis $3.08 ACB Stock and Upcoming Improvements to Adjusted EBITDA Above, we’ve established why Aurora Cannabis isn’t a bargain, in terms of it selling at a discount to its net asset value. Source: Ralf Liebhold / Shutterstock.com Like other Canada-based pot stocks, Aurora Cannabis (NASDAQ:ACB) has steadily dropped in price in the past year. | Not only that, having positive EBITDA would make it easier to calculate a fair valuation for ACB stock. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Down by around two-thirds in the past year, Aurora Cannabis (ACB) may look cheap at today’s prices. Source: Ralf Liebhold / Shutterstock.com Like other Canada-based pot stocks, Aurora Cannabis (NASDAQ:ACB) has steadily dropped in price in the past year. |
36558.0 | 2022-04-26 00:00:00 UTC | CANADA STOCKS-Toronto index slips as tech, healthcare stocks weigh | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-slips-as-tech-healthcare-stocks-weigh | nan | nan | By Amal S
April 26 (Reuters) - Canada's main stock index fell on Tuesday, led lower by technology and healthcare stocks, as China's COVID-19 curbs and fears about aggressive U.S. monetary policy tightening sapped risk appetite globally.
At 10:16 a.m. ET (14:16 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 94.48 points, or 0.45%, at 20,917.41, extending prior session's losses.
Toronto-listed technology stocks .SPTTTK fell 2.4%, while healthcare stocks .GSPTTHC slid 1.1% with pot-producers Aurora Cannabis ACB.TO, Canopy Growth WEED.TO, and Cronos Group CRON.TO all down between 1.8% and 3%.
Further losses were limited by a 0.1% rise in the energy sector .SPTTEN, on a modest increase in oil prices in volatile trading as the market weighed concerns over Russian supply and Chinese demand.O/R
"I think there's also some fear that the selloff yesterday got too fast, overdone. So we're seeing a bit of a bounce back in some of these energy names," said Gregory Taylor, portfolio manager at Purpose Investments.
"We've lots of moving parts and it all comes down to everyone waiting for earnings tonight."
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, fell 1.1% despite higher bullion prices.GOL/
On the economic front, Canadian factory sales most likely rose 1.7% in March from February, largely driven by higher sales in petroleum and coal, primary metal, and paper product industries, Statistics Canada said in a flash estimate.
Among individual shares, Air Canada AC.TO fell 3.4% after the airline reported a larger-than-expected quarterly loss and said it is adding capacity to meet a rebound in spring traffic.
HIGHLIGHTS
The TSX posted one new 52-week high and seven new lows.
Across all Canadian issues there were three new 52-week highs and 59 new lows, with total volume of 32.48 million shares.
(Reporting by Amal S in Bengaluru; Editing by Shailesh Kuber)
((Amal.S@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 3677;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Toronto-listed technology stocks .SPTTTK fell 2.4%, while healthcare stocks .GSPTTHC slid 1.1% with pot-producers Aurora Cannabis ACB.TO, Canopy Growth WEED.TO, and Cronos Group CRON.TO all down between 1.8% and 3%. Further losses were limited by a 0.1% rise in the energy sector .SPTTEN, on a modest increase in oil prices in volatile trading as the market weighed concerns over Russian supply and Chinese demand.O/R "I think there's also some fear that the selloff yesterday got too fast, overdone. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, fell 1.1% despite higher bullion prices.GOL/ On the economic front, Canadian factory sales most likely rose 1.7% in March from February, largely driven by higher sales in petroleum and coal, primary metal, and paper product industries, Statistics Canada said in a flash estimate. | Toronto-listed technology stocks .SPTTTK fell 2.4%, while healthcare stocks .GSPTTHC slid 1.1% with pot-producers Aurora Cannabis ACB.TO, Canopy Growth WEED.TO, and Cronos Group CRON.TO all down between 1.8% and 3%. By Amal S April 26 (Reuters) - Canada's main stock index fell on Tuesday, led lower by technology and healthcare stocks, as China's COVID-19 curbs and fears about aggressive U.S. monetary policy tightening sapped risk appetite globally. Among individual shares, Air Canada AC.TO fell 3.4% after the airline reported a larger-than-expected quarterly loss and said it is adding capacity to meet a rebound in spring traffic. | Toronto-listed technology stocks .SPTTTK fell 2.4%, while healthcare stocks .GSPTTHC slid 1.1% with pot-producers Aurora Cannabis ACB.TO, Canopy Growth WEED.TO, and Cronos Group CRON.TO all down between 1.8% and 3%. By Amal S April 26 (Reuters) - Canada's main stock index fell on Tuesday, led lower by technology and healthcare stocks, as China's COVID-19 curbs and fears about aggressive U.S. monetary policy tightening sapped risk appetite globally. Further losses were limited by a 0.1% rise in the energy sector .SPTTEN, on a modest increase in oil prices in volatile trading as the market weighed concerns over Russian supply and Chinese demand.O/R "I think there's also some fear that the selloff yesterday got too fast, overdone. | Toronto-listed technology stocks .SPTTTK fell 2.4%, while healthcare stocks .GSPTTHC slid 1.1% with pot-producers Aurora Cannabis ACB.TO, Canopy Growth WEED.TO, and Cronos Group CRON.TO all down between 1.8% and 3%. By Amal S April 26 (Reuters) - Canada's main stock index fell on Tuesday, led lower by technology and healthcare stocks, as China's COVID-19 curbs and fears about aggressive U.S. monetary policy tightening sapped risk appetite globally. ET (14:16 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 94.48 points, or 0.45%, at 20,917.41, extending prior session's losses. |
36559.0 | 2022-04-21 00:00:00 UTC | CANADA STOCKS-Toronto index gains as tech, healthcare stocks gain | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-gains-as-tech-healthcare-stocks-gain | nan | nan | By Amal S
April 21 (Reuters) - Canada's main stock index gained on Thursday, aided by gains in technology and healthcare stocks, while upbeat U.S. earnings lifted global sentiment.
At 9:42 a.m. ET (1342 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 40.4 points, or 0.18%, at 22,038.78.
U.S. stock index rose as heavyweight Tesla surged on strong results and United Airlines predicted a surprise profit in its current quarter, boosting shares of other carriers. .N
Tracking an upbeat mood in the U.S. tech-heavy Nasdaq index, Toronto-listed technology stocks .SPTTTK rose 1%, leading the gains.
"I call it optimistic," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
"Investors have generally been responding positively to what has been a mixed round of overnight earnings reports from U.S. companies, particularly Tesla and some of the airline stocks - that's a sign that the economy starting to reopen and improve in North America."
Adding further gains were healthcare .GSPTTHC up 0.8%, with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O and Aurora Cannabis ACB.TO up between 1.7% and 2.1%.
The energy sector .SPTTEN climbed 0.5%, as oil prices rose amid concerns about supply as the European Union mulls a potential ban on Russian oil imports days after diminished supplies from Libya rocked the market. O/R
Capping further gains was the materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies. The index was down 1.2% as gold prices slipped 1% to a two-week low, hit by rising U.S. Treasury yields and as an improvement in risk appetite dented the appeal of the safe-haven metal. GOL/
While most stock markets have been rattled with a surge in inflation and a possible economic slowdown in recent months, the TSX's exposure to commodities cushioned the impact and helped the index gain about 4% this year.
HIGHLIGHTS
The TSX posted 11 new 52-week highs and two new lows.
Across all Canadian issues there were 49 new 52-week highs and 62 new lows, with total volume of 30.25 million shares.
(Reporting by Amal S in Bengaluru; Editing by Maju Samuel)
((Amal.S@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 3677;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Adding further gains were healthcare .GSPTTHC up 0.8%, with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O and Aurora Cannabis ACB.TO up between 1.7% and 2.1%. U.S. stock index rose as heavyweight Tesla surged on strong results and United Airlines predicted a surprise profit in its current quarter, boosting shares of other carriers. "Investors have generally been responding positively to what has been a mixed round of overnight earnings reports from U.S. companies, particularly Tesla and some of the airline stocks - that's a sign that the economy starting to reopen and improve in North America." | Adding further gains were healthcare .GSPTTHC up 0.8%, with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O and Aurora Cannabis ACB.TO up between 1.7% and 2.1%. By Amal S April 21 (Reuters) - Canada's main stock index gained on Thursday, aided by gains in technology and healthcare stocks, while upbeat U.S. earnings lifted global sentiment. U.S. stock index rose as heavyweight Tesla surged on strong results and United Airlines predicted a surprise profit in its current quarter, boosting shares of other carriers. | Adding further gains were healthcare .GSPTTHC up 0.8%, with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O and Aurora Cannabis ACB.TO up between 1.7% and 2.1%. By Amal S April 21 (Reuters) - Canada's main stock index gained on Thursday, aided by gains in technology and healthcare stocks, while upbeat U.S. earnings lifted global sentiment. .N Tracking an upbeat mood in the U.S. tech-heavy Nasdaq index, Toronto-listed technology stocks .SPTTTK rose 1%, leading the gains. | Adding further gains were healthcare .GSPTTHC up 0.8%, with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O and Aurora Cannabis ACB.TO up between 1.7% and 2.1%. By Amal S April 21 (Reuters) - Canada's main stock index gained on Thursday, aided by gains in technology and healthcare stocks, while upbeat U.S. earnings lifted global sentiment. ET (1342 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 40.4 points, or 0.18%, at 22,038.78. |
36560.0 | 2022-04-20 00:00:00 UTC | Is Aurora Cannabis Stock a Buy? | ACB | https://www.nasdaq.com/articles/is-aurora-cannabis-stock-a-buy | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The investors of Aurora Cannabis (NASDAQ:ACB) stock have been unimpressed by the pot company for quite some time now. ACB has been unprofitable and delivered results below expectations repeatedly in three of the last four quarters. ACB stock has declined 62% since the last year and is trading 68.5% below its 52-weeks high.
A series of unsuccessful acquisitions has overleveraged the company’s balance sheet and weighed down its top-line and bottom-line growth. As such management instigated cost curtailment initiatives to spur operating margins by shutting down some larger loss generating facilities. These efforts have stemmed earnings before interest, taxes, depreciation, and amortization (EBITDA) loss, which was $9 million in the second quarter of fiscal 2022. This is down from a loss of $80 million reported in Q2 fiscal 2020.
Total cost savings achieved from the initiative amounted to $60 million. This number is likely to reach $80 million by the first half of fiscal 2023.
The company’s, revenues however remain depressed, despite the operating costs and margins showings signs of improvement.
Management, in an effort to support growth, announced that it will acquire TerraFarma for $38 million. This will give ACB control of TerraFarma’s lucrative Thrive Cannabis brand. The deal is should close by the end of fiscal 2022. The transaction will strengthen the company’s capabilities in the Canadian markets and provide access to TerraFarma’s award-winning innovative premium products. These include dried flower, pre-rolls, vapor products and concentrates.
7 Long-Term Stocks to Buy for a Robust Retirement
Aurora expects cost efficiencies gained from the acquisition should led to positive EBITDA by H1 fiscal 2023.
In addition to this, the marijuana industry is awaiting complete legalization of cannabis across the United States. Aurora should benefit from the industry tailwinds.
The pending acquisition of TerraFarma will strengthen the company’s footprints in Canada. It shall also better position ACB to cater to the larger market of the United States.
Declining ACB stock price has presented opportunities for long-term investment in the industry. The stock price should skyrocket.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
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On the date of publication, Sakshi Agarwalla 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.
The post Is Aurora Cannabis Stock a Buy? 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. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips The investors of Aurora Cannabis (NASDAQ:ACB) stock have been unimpressed by the pot company for quite some time now. ACB has been unprofitable and delivered results below expectations repeatedly in three of the last four quarters. ACB stock has declined 62% since the last year and is trading 68.5% below its 52-weeks high. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips The investors of Aurora Cannabis (NASDAQ:ACB) stock have been unimpressed by the pot company for quite some time now. Declining ACB stock price has presented opportunities for long-term investment in the industry. ACB has been unprofitable and delivered results below expectations repeatedly in three of the last four quarters. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips The investors of Aurora Cannabis (NASDAQ:ACB) stock have been unimpressed by the pot company for quite some time now. ACB has been unprofitable and delivered results below expectations repeatedly in three of the last four quarters. ACB stock has declined 62% since the last year and is trading 68.5% below its 52-weeks high. | Declining ACB stock price has presented opportunities for long-term investment in the industry. InvestorPlace - Stock Market News, Stock Advice & Trading Tips The investors of Aurora Cannabis (NASDAQ:ACB) stock have been unimpressed by the pot company for quite some time now. ACB has been unprofitable and delivered results below expectations repeatedly in three of the last four quarters. |
36561.0 | 2022-04-20 00:00:00 UTC | Here's Why Pot Stocks Should Stop Promising Profits | ACB | https://www.nasdaq.com/articles/heres-why-pot-stocks-should-stop-promising-profits | nan | nan | Why is it that Canadian pot companies are struggling while revenue is soaring for their peers in the U.S., where marijuana is not even federally legal?
Firstly, Canada is a much smaller market than the U.S. With a population of just under 39 million, it's comparable to California. Secondly, regulatory hold-ups delayed the opening of cannabis stores in many provinces. In addition, some Canadian pot companies' errors have left them in distress.
As a result, cannabis players like Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) -- which were popular with investors for many years -- have failed miserably and consistently to report positive adjusted earnings in the last two years. Yet these companies keep making promises on the subject every quarter.
Image source: Getty Images.
Self-inflicted wounds
Most Canadian pot companies sabotaged themselves. Aurora Cannabis, in particular, went on an acquisition spree that overburdened its balance sheet. When it failed to grow revenue to match its boosted production capacity, it had to shut down most of its larger grow facilities -- a process it called "cost rationalization." And it did help Aurora to some extent in managing expenses. In its fiscal 2022 second quarter (which ended Dec. 31), Aurora realized annualized run-rate cost savings of 60 million Canadian dollars, and it expects to hit its original savings target of CA$80 million by the first half of fiscal 2023.
Canopy, on the other hand, played it smart by securing a strong partner to do some of the financial heavy lifting. Alcoholic beverage giant Constellation Brands first invested in the company in 2018 and now holds a 38% stake in it. Canopy also adopted some cost-cutting measures, and according to management, it realized cost savings of CA$85 million by the end of its fiscal 2022 third quarter (which also ended Dec. 31).
Though Canopy is safe for now from financial danger, it too has failed to either grow revenues or transition to profitability.
In its fiscal third quarter, its net revenue dropped by 8% year over year to CA$141 million. As a result, it recorded an adjusted EBITDA loss of CA$67 million -- not much of an improvement from its loss of CA$68 million in the prior-year period.
Unfulfilled promises
Aurora has failed to achieve its EBITDA targets repeatedly since last year -- unsurprising, since its revenues declined. For example, they dropped 10% year over year to CA$60 million in fiscal Q2.
But its cost-cutting measures did help the company reduce its EBITDA losses from CA$80 million in Q2 fiscal 2020 to CA$9 million in Q2 fiscal 2022.
Recently, Aurora announced that is acquiring Ontario-based Thrive Cannabis. Management said it expects to be EBITDA positive in the first half of fiscal 2023 through this acquisition. However, it's still soon to say if this deal will be beneficial to Aurora, as mergers and acquisitions take time to reveal their full potential.
Its history of missing its bottom-line guidance targets makes it hard to trust that Aurora will be able to achieve profitability any time soon.
Unlike Aurora, Canopy has no current forecast for when it will achieve positive EBITDA. But Canopy's management has high hopes for the U.S. cannabis market, which could be a long shot. If and when federal legalization happens, domestic cannabis companies would be the first to benefit. Instead, Canopy should focus on boosting revenues in Canada or in international markets where it already has a strong presence.
This is not the year for these pot stocks
These companies' recent earnings reports do not give any indications as to whether they are doing anything to change their current circumstances. Further, Canopy's management warned that it expects some COVID-related headwinds in Europe and Canada to affect its results for the current quarter.
Wall Street analysts have high hopes for both Canopy and Aurora this year. Their consensus price targets anticipate upsides of 57% and 46%, respectively. But I believe that it's out of the question that either will reach profitability this year, and regardless of the schedule, it won't happen until they grow their revenue significantly.
I would therefore advise investors to steer clear of these stocks until they show some robust growth numbers. Aurora is a risky bet, but Canopy, with its strong partners, has good prospects in the U.S. a few years down the line. Investors who are already invested in Canopy should hold onto their shares for the long haul. Those still interested in making new investments in Canadian pot stocks should consider Tilray, which is proving to be a much stronger company in the wake of the merger with Aphria, and is also profitable.
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 – 18 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 owns 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. | As a result, cannabis players like Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) -- which were popular with investors for many years -- have failed miserably and consistently to report positive adjusted earnings in the last two years. Further, Canopy's management warned that it expects some COVID-related headwinds in Europe and Canada to affect its results for the current quarter. Those still interested in making new investments in Canadian pot stocks should consider Tilray, which is proving to be a much stronger company in the wake of the merger with Aphria, and is also profitable. | As a result, cannabis players like Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) -- which were popular with investors for many years -- have failed miserably and consistently to report positive adjusted earnings in the last two years. In its fiscal 2022 second quarter (which ended Dec. 31), Aurora realized annualized run-rate cost savings of 60 million Canadian dollars, and it expects to hit its original savings target of CA$80 million by the first half of fiscal 2023. Canopy also adopted some cost-cutting measures, and according to management, it realized cost savings of CA$85 million by the end of its fiscal 2022 third quarter (which also ended Dec. 31). | As a result, cannabis players like Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) -- which were popular with investors for many years -- have failed miserably and consistently to report positive adjusted earnings in the last two years. In its fiscal 2022 second quarter (which ended Dec. 31), Aurora realized annualized run-rate cost savings of 60 million Canadian dollars, and it expects to hit its original savings target of CA$80 million by the first half of fiscal 2023. But its cost-cutting measures did help the company reduce its EBITDA losses from CA$80 million in Q2 fiscal 2020 to CA$9 million in Q2 fiscal 2022. | As a result, cannabis players like Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) -- which were popular with investors for many years -- have failed miserably and consistently to report positive adjusted earnings in the last two years. Why is it that Canadian pot companies are struggling while revenue is soaring for their peers in the U.S., where marijuana is not even federally legal? Management said it expects to be EBITDA positive in the first half of fiscal 2023 through this acquisition. |
36562.0 | 2022-04-20 00:00:00 UTC | 3 Reasons to Buy Curaleaf Stock on the Dip | ACB | https://www.nasdaq.com/articles/3-reasons-to-buy-curaleaf-stock-on-the-dip | nan | nan | Marijuana stocks have been on a downward trend for the past couple of months, mostly because of a lack of positive movement toward U.S. federal legalization. But that doesn't change the fact that some of the domestic multistate players (MSO)s are excellent growth stocks that could bring huge returns once the industry matures.
One such company is Massachusetts-based Curaleaf Holdings (OTC: CURLF), which is outshining its peers. Curaleaf proved yet again how capable it is with its strong end to 2021. Let's take a look at its fourth-quarter results and determine why now is the best time to buy this pot stock.
Image source: Getty Images.
Smart and timely growth strategies
It is important for an evolving company's management to adopt smart growth strategies without wasting money. We saw what happened with wildly popular Canadian pot company Aurora Cannabis. Driven by the rise in pot demand, Aurora went on a haphazard acquisition spree and burdened its balance sheet -- the effect of which the company is still bearing.
Curaleaf also made a lot of acquisitions in the last two years, but those were timely and strategically planned. Some of them include various cannabis products, manufacturers, and dispensaries -- like Select, Curaleaf NJ, Arrow, MEOT, Remedy, Blue Kudu, Alternative Therapies Group, Grassroots, and more -- that have worked in its favor. In its fourth quarter, revenue jumped 39% year over year to $320 million. For the full year, total revenue surged a whopping 93% to $1.2 billion.
The company has been profiting from these acquisitions, but some have yet to show their full potential. In the fourth quarter alone, Curaleaf entered into agreements to acquire another MSO, Tryke Companies, and Natural Remedy Patient Center. The company ended the year with a total of 117 dispensaries.
Curaleaf has also started 2022 on a strong note. The company opened many new dispensaries this year, bringing its total to 126 as of March 3.
Closer to profitability than ever
Despite having a remarkable growth in revenue, Curaleaf is not profitable yet. The company saw a 48% year-over-year growth in Q4 adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) to $80 million. For the full year, adjusted EBITDA jumped 107% to $298 million.
Peer Trulieve Cannabis acquired Harvest Health last year, while Cresco Labs recently announced the acquisition of New York-based MSO Columbia Care.
Now that these two have some strong cannabis companies in their portfolio, the pressure is more on Curaleaf to achieve profitability. The company has earned $1.2 billion in revenue over the trailing 12 months compared to Trulieve's $938 million and Cresco's $821 million, respectively.
From just $19 million in revenue in fiscal 2017 to $1.2 billion in 2021, Curaleaf has come a long way. I believe it won't be long before Curaleaf sees green in its bottom line. The company ended the year with $299 million in cash and $436 million in outstanding debt (net of unamortized debt discounts).
International exposure
Very few domestic MSOs have been able to expand to the international markets, the European market in particular. Experts predict this market could grow at a compound annual rate of 29.6% through 2027 to $37 billion.
After establishing a solid footprint in the United States with 126 stores, Curaleaf is spreading its roots to the European market. Last year, it completed the acquisition of EMMAC Life Sciences Group, also completing its successful rebranding to Curaleaf International. This acquisition gives Curaleaf access to "key medical cannabis markets, including the UK, Germany, Italy, Spain, and Portugal."
While the company has shown that it can do wonders even in a limited market, if and when legalization happens, more opportunities will arise for Curaleaf in the U.S. Should that happen, the stock will get more expensive.
Market pessimism, due to a lack of movement toward positive cannabis reforms, has affected marijuana stock prices. But Wall Street analysts are optimistic about pot stocks and see upsides of 125% for this MSO in the next 12 months. Curaleaf's stock is trading more than 50% below its 52-week high of $15.47 now. That makes now is the right time to buy onthe dip and hold it for the long haul.
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 – 18 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 owns 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. | But that doesn't change the fact that some of the domestic multistate players (MSO)s are excellent growth stocks that could bring huge returns once the industry matures. Some of them include various cannabis products, manufacturers, and dispensaries -- like Select, Curaleaf NJ, Arrow, MEOT, Remedy, Blue Kudu, Alternative Therapies Group, Grassroots, and more -- that have worked in its favor. Peer Trulieve Cannabis acquired Harvest Health last year, while Cresco Labs recently announced the acquisition of New York-based MSO Columbia Care. | In its fourth quarter, revenue jumped 39% year over year to $320 million. For the full year, adjusted EBITDA jumped 107% to $298 million. The company has earned $1.2 billion in revenue over the trailing 12 months compared to Trulieve's $938 million and Cresco's $821 million, respectively. | Now that these two have some strong cannabis companies in their portfolio, the pressure is more on Curaleaf to achieve profitability. While the company has shown that it can do wonders even in a limited market, if and when legalization happens, more opportunities will arise for Curaleaf in the U.S. Should that happen, the stock will get more expensive. 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 company has earned $1.2 billion in revenue over the trailing 12 months compared to Trulieve's $938 million and Cresco's $821 million, respectively. From just $19 million in revenue in fiscal 2017 to $1.2 billion in 2021, Curaleaf has come a long way. 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. |
36563.0 | 2022-04-20 00:00:00 UTC | Is It Too Late to Buy Tilray Stock? | ACB | https://www.nasdaq.com/articles/is-it-too-late-to-buy-tilray-stock | nan | nan | The 2021 merger between two strong cannabis companies, Tilray (NASDAQ: TLRY) and Aphria, is turning out to be fruitful. Since the deal was completed, Tilray has reported impressive quarterly results.
Its recent third quarter (ended Feb. 28) report had some brights spots for investors. Revenue keeps growing, which is driving earnings before interest, tax, depreciation, and amortization (EBITDA) profitability. It also made a splash by forming a strategic alliance with fellow Canadian pot grower Hexo. Let's take a look at this standout pot stock and consider if the time is right to buy it.
Image source: Getty Images.
A stronger company since joining hands with Aphria
Aphria was already a robust, profitable pot company. Under new CEO Irwin Simon, Tilray is on the path to reaching new heights in the Canadian cannabis space and the merger has extended its horizons globally. Cultivation facilities in Portugal and Germany will help strengthen its position in the European markets.
A merger this big will take a while to show its full potential. But Tilray has already realized cost synergies of $76 million to date. Management expects to earn an $80 million synergy target (ahead of schedule) by May 31 and an additional $20 million in fiscal 2023.
Cost synergies are the reductions in cost that a company achieves from a merger. These efficiencies include high-class production facilities, competitive innovative products, growth strategies, the scale of operations, and more to generate higher sales. These efficiency targets do not include revenue synergies that will be generated.
Tilray's consistent performance is impressive
Tilray's third quarter marked the 12th consecutive quarter of positive adjusted EBITDA. This is impressive considering how its peers Aurora Cannabis, Canopy Growth, and Hexo are struggling to grow revenue and be EBITDA positive. A net revenue jump of 23% year over year to $152 million contributed to this performance.
Tilray's acquisition of craft beer maker SweetWater Brewing and hemp-based foods maker Manitoba Harvest contributed a significant amount to total revenue.
Management credited the following factors for adding to the total revenue surge:
32% growth in cannabis revenue (medical and recreational) to $55 million from the year-ago period.
Net beverage alcohol revenue of $19.5 million from SweetWater, a growth of 63%.
Wellness segment revenue (includes hemp foods and cannabidiol products) of $14.6 million from Manitoba Harvest.
The Canadian medical cannabis business boomed while recreational sales dipped a little in the third quarter. But according to management, Tilray still maintained the No. 1 leadership position in Canada with 10.2% market share.
On the downside, Tilray reported free cash flow of negative $35.6 million in the third quarter, a trend that continued from the prior two quarters. But management assured investors that the company is still "working toward sustaining positive free cash flow generation and view achieving it consistently as a priority for this business."
Even though distribution revenue dipped 11% year over year to $63 million, most of which is generated by German subsidiary CC Pharma, the slowdown was the result of currency translation. Distribution revenue contributed to 41% of total revenue.
Is Tilray the only Canadian pot stock to invest in now?
In fact, this is the right time to buy Tilray stock, which is trading more than 50% below its 52-week high. Unlike Aurora Cannabis, Tilray has more chances of establishing a strong position in the U.S. market (if and when federal legalization happens). Simon stated SweetWater Brewing, Breckenridge Distillery, and Manitoba Harvest are EBITDA profitable and will help the company build a stronger business in the U.S. The company is also on a path to achieving $4 billion in revenue by fiscal 2024, while peers are struggling to even grow revenue.
Tilray also entered into a strategic alliance with Hexo to pay off its $193 million in convertible debt, earning the right to own a substantial stake in Hexo at a later date. Tilray will also benefit with $18 million annually for "advisory services" and 5% annual interest on said debt to be paid by Hexo. Both companies also aim to save up to $80 million in cost synergies annually between them, within two years of completion of the deal.
This is not exactly a merger, but we can expect this deal to form a joint venture of two strong cannabis companies from which Tilray will ultimately benefit in the form of less competition and better marijuana prices.
Investors who can wait for Tilray to reap the benefits of the Aphria merger and the strategic deal with Hexo can buy the stock on the dip now to hold it for the long haul. Analysts see an average upside of 163% for this pot stock for the next 12 months. This may be the only Canadian pot stock to invest in right now.
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 – 18 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 recommends HEXO 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. | Under new CEO Irwin Simon, Tilray is on the path to reaching new heights in the Canadian cannabis space and the merger has extended its horizons globally. But management assured investors that the company is still "working toward sustaining positive free cash flow generation and view achieving it consistently as a priority for this business." Investors who can wait for Tilray to reap the benefits of the Aphria merger and the strategic deal with Hexo can buy the stock on the dip now to hold it for the long haul. | Tilray's acquisition of craft beer maker SweetWater Brewing and hemp-based foods maker Manitoba Harvest contributed a significant amount to total revenue. The Canadian medical cannabis business boomed while recreational sales dipped a little in the third quarter. But management assured investors that the company is still "working toward sustaining positive free cash flow generation and view achieving it consistently as a priority for this business." | Tilray's consistent performance is impressive Tilray's third quarter marked the 12th consecutive quarter of positive adjusted EBITDA. This is not exactly a merger, but we can expect this deal to form a joint venture of two strong cannabis companies from which Tilray will ultimately benefit in the form of less competition and better marijuana prices. Investors who can wait for Tilray to reap the benefits of the Aphria merger and the strategic deal with Hexo can buy the stock on the dip now to hold it for the long haul. | Is Tilray the only Canadian pot stock to invest in now? Unlike Aurora Cannabis, Tilray has more chances of establishing a strong position in the U.S. market (if and when federal legalization happens). Investors who can wait for Tilray to reap the benefits of the Aphria merger and the strategic deal with Hexo can buy the stock on the dip now to hold it for the long haul. |
36564.0 | 2022-04-20 00:00:00 UTC | This Cannabis Company Just Pulled Off a Miracle | ACB | https://www.nasdaq.com/articles/this-cannabis-company-just-pulled-off-a-miracle | nan | nan | In an industry that sometimes seems like it is full of disappointment with continuous losses and lackluster growth numbers, cannabis investors received a welcome surprise last week from OrganiGram (NASDAQ: OGI). The marijuana company reported its latest quarterly numbers, and they were full of positives.
OrganiGram grew its sales and improved on its margins. By the marijuana industry's standards in Canada, that's definitely a small miracle, one that investors may not have been expecting. Let's take a closer look at the numbers and see if OrganiGram is a pot stock worth buying today.
Image source: Getty Images.
Sales soared 128% year over year
For the period ending Feb. 28, OrganiGram reported gross sales of 43.9 million Canadian dollars, more than double the CA$19.3 million it generated in the prior-year period. After excise taxes, net revenue was still CA$31.8 million and up an impressive 117%. What's even more surprising is that the company's market share in Canada was 8.2% in February, and for the second straight month, it was the No. 3 licensed producer in the country. And it's also in the leading position in the dried flower category, which accounts for half of the entire market.
One of the ways the company has been growing its sales is by launching new products. OrganiGram said it introduced 18 new products during the period, bringing its total core SKUs to 69.
OrganiGram's margins improved along with revenue
What made the quarter a shocking one was that in addition to some solid sales growth, OrganiGram improved on its margins. Normally, when a company puts out more SKUs and tries to be more aggressive on the top line, it's the margins that suffer. But OrganiGram's adjusted gross margin of 26% was a big improvement from the negative 5% margin that it reported a year earlier.
Furthermore, it reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profit of CA$1.6 million, versus a loss of CA$7.8 million a year earlier. For comparison's sake, rival producer Aurora Cannabis continues to work toward positive adjusted EBITDA, and it recently shrank its quarterly loss to below CA$10 million in the period ending Dec. 31. But unlike OrganiGram, its revenue declined by 10% on a year-over-year basis to CA$60.6 million.
OrganiGram may not be generating as much in revenue (Aurora's business is broader and more geographically diverse), but the company is generating growth and improving its bottom line, which makes it a more sound investment overall.
Is OrganiGram a buy?
Although the results initially buoyed OrganiGram's stock, it is still down 34% over the past 12 months. However, that's still better than the Horizons Marijuana Life Sciences ETF, which has fallen 52% during the same period. The cannabis industry hasn't been a popular place to invest in of late, especially with legalization in the U.S. not making any meaningful progress, which may be frustrating growth-oriented investors. Relative to what the industry is facing as a whole, OrganiGram's stock has done reasonably well.
The big question for investors about whether the stock is still a buy right now is in determining if it's worth a premium, as it currently trades at a higher price-to-sales (P/S) ratio than its peers.
OGI PS Ratio data by YCharts
If the company can continue to make improvements in future quarters, not only will its P/S multiple get better, but there will also be a greater justification to pay a premium for this promising growth stock.
For investors wanting exposure to the Canadian cannabis market, OrganiGram may be one of the better options to buy today. More conservative investors, however, may want to wait at least another quarter or two to confirm that its No. 3 position in the market is sustainable for more than just a couple of months.
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 – 18 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 owns 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. | In an industry that sometimes seems like it is full of disappointment with continuous losses and lackluster growth numbers, cannabis investors received a welcome surprise last week from OrganiGram (NASDAQ: OGI). For comparison's sake, rival producer Aurora Cannabis continues to work toward positive adjusted EBITDA, and it recently shrank its quarterly loss to below CA$10 million in the period ending Dec. 31. OGI PS Ratio data by YCharts If the company can continue to make improvements in future quarters, not only will its P/S multiple get better, but there will also be a greater justification to pay a premium for this promising growth stock. | In an industry that sometimes seems like it is full of disappointment with continuous losses and lackluster growth numbers, cannabis investors received a welcome surprise last week from OrganiGram (NASDAQ: OGI). Sales soared 128% year over year For the period ending Feb. 28, OrganiGram reported gross sales of 43.9 million Canadian dollars, more than double the CA$19.3 million it generated in the prior-year period. Furthermore, it reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profit of CA$1.6 million, versus a loss of CA$7.8 million a year earlier. | Sales soared 128% year over year For the period ending Feb. 28, OrganiGram reported gross sales of 43.9 million Canadian dollars, more than double the CA$19.3 million it generated in the prior-year period. OrganiGram's margins improved along with revenue What made the quarter a shocking one was that in addition to some solid sales growth, OrganiGram improved on its margins. OrganiGram may not be generating as much in revenue (Aurora's business is broader and more geographically diverse), but the company is generating growth and improving its bottom line, which makes it a more sound investment overall. | In an industry that sometimes seems like it is full of disappointment with continuous losses and lackluster growth numbers, cannabis investors received a welcome surprise last week from OrganiGram (NASDAQ: OGI). The marijuana company reported its latest quarterly numbers, and they were full of positives. Sales soared 128% year over year For the period ending Feb. 28, OrganiGram reported gross sales of 43.9 million Canadian dollars, more than double the CA$19.3 million it generated in the prior-year period. |
36565.0 | 2022-04-18 00:00:00 UTC | Aurora Cannabis: Interest for the Cannabis Stock Far-Fetched From Popping Up | ACB | https://www.nasdaq.com/articles/aurora-cannabis%3A-interest-for-the-cannabis-stock-far-fetched-from-popping-up | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Aurora Cannabis (NASDAQ:ACB) has been an awful investment this year. ACB stock dipped 39.6% year-to-date to $3.43 per share. The bearish pattern has however slowed in the past month, after the announcement of TerraFarma’s acquisition, a high margin recreational cannabis firm.
Interest for cannabis stocks took a hit this year, as investors refuged into valuable assets that tend to minimize the effect of rising inflation and interest rates. While TerraFarma’s integration will improve Aurora’s profitability in the medium term, the company has a poor track record. The pot company missed earnings per share (EPS) expectations in three of the last four quarters. After the transaction, ACB expects to reach Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability in the first half of fiscal 2023. While this bodes well for its financial outlook, the recreational cannabis company is not expected to turn a profit in the next two years.
In addition, ACB’s top-line growth rate steadied in the past few quarters. After decreasing 12.2% to 245 million CAD in 2021, net sales are projected to decline 3.7% this year to 236 million CAD. On the other hand, Aurora’s net loss is estimated to contract this year, posting an annual net loss of 165 million CAD versus a deficit of 695 million CAD in 2021.
Meanwhile, free cash flow is forecasted to enhance this year, posting a deficit of 90.9 million CAD compared to a negative figure of 264 million CAD in 2021. Despite this improving financials, Aurora had a fragile cash position of 21.9 million CAD at the end of 2021, indicating that it will have to raise additional capital to honor its engagements. Moreover and even if ACB stock lost nearly 40% of its market capitalization over the year, its valuation multiples remain overstretched, exchanging at 4.45x 2022e EV/ Revenue.
Cannabis stocks underperformed equity markets, providing attractive entry points for long-term investors. Besides, most cannabis stocks are nearing profitability, a strong catalyst for this emerging industry. The recent acquisition of TerraFarma is constructive for ACB’s equity story. Nevertheless, Aurora’s bearish momentum is not ready for a reversal, given the challenging market environment, defined by high inflation and rising interest rates.
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On the date of publication, Cristian Docan 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.
Cristian Docan, a contributor for InvestorPlace.com, has been writing stock market-related articles for Seeking Alpha, Stocknews, and Wealthpop since 2017. He takes a fundamental and technical approach in evaluating stocks for readers, focusing on momentum investing and macro-driven strategies.
The post Aurora Cannabis: Interest for the Cannabis Stock Far-Fetched From Popping Up 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. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (NASDAQ:ACB) has been an awful investment this year. ACB stock dipped 39.6% year-to-date to $3.43 per share. After the transaction, ACB expects to reach Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability in the first half of fiscal 2023. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (NASDAQ:ACB) has been an awful investment this year. ACB stock dipped 39.6% year-to-date to $3.43 per share. After the transaction, ACB expects to reach Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability in the first half of fiscal 2023. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (NASDAQ:ACB) has been an awful investment this year. ACB stock dipped 39.6% year-to-date to $3.43 per share. After the transaction, ACB expects to reach Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability in the first half of fiscal 2023. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aurora Cannabis (NASDAQ:ACB) has been an awful investment this year. ACB stock dipped 39.6% year-to-date to $3.43 per share. After the transaction, ACB expects to reach Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability in the first half of fiscal 2023. |
36566.0 | 2022-04-18 00:00:00 UTC | CANADA STOCKS-Resource shares lift Toronto index higher | ACB | https://www.nasdaq.com/articles/canada-stocks-resource-shares-lift-toronto-index-higher | nan | nan | By Amal S
April 18 (Reuters) - Canada's main stock index rose on Monday as higher commodity prices bolstered the energy and materials sectors, although concerns around rising U.S. bond yields kept sentiment in check.
At 9:39 a.m. ET (13:39 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 54.39 points, or 0.25%, at 21,910.09.
Meanwhile, U.S. stocks inched lower at open as Treasury yields continued to rise on expectations of a tighter monetary policy.
"Markets are a little bit soft and that's around the world, not specific to Canada. The one thing that helped Canada is climbing commodity prices," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
The energy sector .SPTTEN was up 1.2%, supported by higher oil prices as outages in Libya deepened concern over tight global supply and the Ukraine crisis dragged on. O/R
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.1% as gold prices jumped to a more than one-month high over the economic fallout from the Russia-Ukraine war and surging inflation.GOL/
"Gold once again is approaching $2,000/oz... suggesting some investors are positioning defensively," Cieszynski added.
While most stock markets are rattled with a surge in inflation and a possible economic slowdown, the TSX hit a record high earlier this month supported by surging commodity prices.
Among the sectors that lost ground was technology .SPTTTK, down 1.4%, tracking weakness in the U.S. tech-heavy Nasdaq index.
While healthcare .GSPTTHC shed 2.2% with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O, and Aurora Cannabis ACB.TO among the top decliners.
HIGHLIGHTS
The TSX posted 26 new 52-week highs and two new lows.
Across all Canadian issues there were 68 new 52-week highs and 38 new lows, with total volume of 28.99 million shares.
(Reporting by Amal S in Bengaluru; Editing by Shailesh Kuber)
((Amal.S@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 3677;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | While healthcare .GSPTTHC shed 2.2% with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O, and Aurora Cannabis ACB.TO among the top decliners. By Amal S April 18 (Reuters) - Canada's main stock index rose on Monday as higher commodity prices bolstered the energy and materials sectors, although concerns around rising U.S. bond yields kept sentiment in check. The one thing that helped Canada is climbing commodity prices," said Colin Cieszynski, chief market strategist at SIA Wealth Management. | While healthcare .GSPTTHC shed 2.2% with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O, and Aurora Cannabis ACB.TO among the top decliners. By Amal S April 18 (Reuters) - Canada's main stock index rose on Monday as higher commodity prices bolstered the energy and materials sectors, although concerns around rising U.S. bond yields kept sentiment in check. The energy sector .SPTTEN was up 1.2%, supported by higher oil prices as outages in Libya deepened concern over tight global supply and the Ukraine crisis dragged on. | While healthcare .GSPTTHC shed 2.2% with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O, and Aurora Cannabis ACB.TO among the top decliners. By Amal S April 18 (Reuters) - Canada's main stock index rose on Monday as higher commodity prices bolstered the energy and materials sectors, although concerns around rising U.S. bond yields kept sentiment in check. O/R The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.1% as gold prices jumped to a more than one-month high over the economic fallout from the Russia-Ukraine war and surging inflation.GOL/ "Gold once again is approaching $2,000/oz... suggesting some investors are positioning defensively," Cieszynski added. | While healthcare .GSPTTHC shed 2.2% with pot producers including Canopy Growth WEED.TO, Tilray Brands TLRY.O, and Aurora Cannabis ACB.TO among the top decliners. By Amal S April 18 (Reuters) - Canada's main stock index rose on Monday as higher commodity prices bolstered the energy and materials sectors, although concerns around rising U.S. bond yields kept sentiment in check. While most stock markets are rattled with a surge in inflation and a possible economic slowdown, the TSX hit a record high earlier this month supported by surging commodity prices. |
36567.0 | 2022-04-15 00:00:00 UTC | Is Aurora Cannabis Repeating Its Mistakes With This Acquisition? | ACB | https://www.nasdaq.com/articles/is-aurora-cannabis-repeating-its-mistakes-with-this-acquisition | nan | nan | Canadian pot stocks had a disappointing 2021, but this year doesn't look rosy either. Recently, popular cannabis players Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) reported dismal quarterly results. Aurora Cannabis, in particular, has been unprofitable for quite a while now with declining revenue and ineffective cost management strategies.
Soon after the results, Aurora announced that it is acquiring Ontario-based Thrive Cannabis. An acquisition at this point doesn't seem to be a wise idea. Let's take a look at this in more detail and determine whether this acquisition will be good for Aurora or if it is just digging its grave deeper.
Image source: Getty Images.
Self-inflicted wounds
When demand soared in Canada after marijuana legalization, Aurora Cannabis went on an acquisition spree and burdened its balance sheet. When it failed to grow revenue to match its production, it had to shut down most of its larger production facilities through what it called a "cost rationalization" process. It has helped Aurora to some extent in saving money. As per its recent fiscal 2022 second-quarter results, for the period ended Dec. 31, 2021, Aurora has managed to realize annualized run-rate cost savings of $60 million and expects to hit its original target of $80 million by the first half of fiscal 2023.
Its second-quarter results weren't encouraging. Total revenue declined 10% year over year to 60 million Canadian dollars in the quarter. Aurora's cost savings have helped the company reduce its earnings before interest, tax, depreciation and amortization (EBITDA) losses from $80 million Canadian dollars in the second quarter of fiscal 2020 to CA$9 million in fiscal Q2 2022.
Wounds haven't healed yet
While the company is still struggling, it recently announced the acquisition of TerraFarma, the parent company of Thrive Cannabis. Management's intention behind this is simple: Thrive has been EBITDA positive for the last 12 months and has an award-winning innovative products portfolio that will be helpful to Aurora. It is a "margin accretive transaction," meaning the transaction of CA$38 million in cash, Aurora's common shares, and two earnout amounts, (either in cash or Aurora shares whichever the company decides) will be based on if Thrive achieves certain revenue targets within two years of the closing. The deal is expected to close in Aurora's fiscal fourth quarter of 2022.
Even though Aurora's cost-cutting strategies seem to be working for now, until the company manages to grow revenue, profitability is still a long shot. Aurora's management expects that when both companies combine their resources, strategies, and products, they could create something better. I see both positives and negatives in this acquisition. Aurora expects cost synergies from the acquisition to drive the company toward positive EBITDA by the first half of fiscal 2023.
Cost synergies are cost reductions that the company achieves from a merger by taking advantage of each company's efficiencies. These efficiencies usually include high-class production facilities, competitive innovative products, growth strategies, the scale of operations, and more to generate higher sales. But this could take a while. A merger usually takes longer to show its true potential. Given Aurora's current financial situation, it would weigh more on its balance sheet. The company has already been raising money through excessive share dilution, which doesn't sit well with investors.
On the plus side, Thrive may be able to help Aurora with its recreational cannabis business. Lack of capital didn't allow the company to develop any new recreational products -- high-margin derivatives in particular. Derivatives are additional recreational products that Canada legalized in October 2019 as part of "Cannabis 2.0" legalization. With Thrive's already established Greybeard brand, Aurora might be able to grow its Canadian recreational business. Management stated with this acquisition the focus is to now develop "innovative premium products including dried flower, pre-rolls, vapor products, and concentrates."
Only time will tell
If Aurora management's predictions are correct, then Thrive Cannabis could help boost the company's revenue and help it achieve profitability. We will have to wait and see whether this acquisition will help Aurora rebound sooner.
ACB data by YCharts
While Canopy and Tilray are getting ready to take advantage of the U.S. cannabis market, which is burgeoning right now, Aurora has a lot to deal with. Financially it is not sound or stable enough to expand into a highly competitive U.S. market. Aurora's stock is down 32% so far this year, compared to the S&P 500's fall of 7%. Until Aurora shows some robust growth numbers, it might be wise to steer clear of this stock and consider other outstanding marijuana stocks.
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 – 18 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. | ACB data by YCharts While Canopy and Tilray are getting ready to take advantage of the U.S. cannabis market, which is burgeoning right now, Aurora has a lot to deal with. Recently, popular cannabis players Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) reported dismal quarterly results. Self-inflicted wounds When demand soared in Canada after marijuana legalization, Aurora Cannabis went on an acquisition spree and burdened its balance sheet. | Recently, popular cannabis players Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) reported dismal quarterly results. ACB data by YCharts While Canopy and Tilray are getting ready to take advantage of the U.S. cannabis market, which is burgeoning right now, Aurora has a lot to deal with. Total revenue declined 10% year over year to 60 million Canadian dollars in the quarter. | Recently, popular cannabis players Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) reported dismal quarterly results. ACB data by YCharts While Canopy and Tilray are getting ready to take advantage of the U.S. cannabis market, which is burgeoning right now, Aurora has a lot to deal with. Aurora's cost savings have helped the company reduce its earnings before interest, tax, depreciation and amortization (EBITDA) losses from $80 million Canadian dollars in the second quarter of fiscal 2020 to CA$9 million in fiscal Q2 2022. | Recently, popular cannabis players Canopy Growth (NASDAQ: CGC) and Aurora Cannabis (NASDAQ: ACB) reported dismal quarterly results. ACB data by YCharts While Canopy and Tilray are getting ready to take advantage of the U.S. cannabis market, which is burgeoning right now, Aurora has a lot to deal with. On the plus side, Thrive may be able to help Aurora with its recreational cannabis business. |
36568.0 | 2022-04-11 00:00:00 UTC | Why Tilray, Canopy Growth, and Aurora Cannabis Stocks Dropped Early Monday | ACB | https://www.nasdaq.com/articles/why-tilray-canopy-growth-and-aurora-cannabis-stocks-dropped-early-monday | nan | nan | What happened
Many Canadian cannabis stocks have been on the upswing over the past month as hope increased that the U.S. could be moving further along the path to legalizing marijuana. But this week started off with several of these names reversing course. Early Monday, the stocks of Tilray (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped about 5%. As of 11:48 a.m. ET, these names have pared those losses, however, and are all down about 1%.
So what
The U.S. House of Representatives passed the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act on April 1, 2022. Mostly along party lines, that House vote effectively agreed to legalize marijuana by removing it from the list of federally banned drugs under the Controlled Substances Act. That moves the issue to further consideration by the Senate. That progress toward legalization in the U.S., along with some positive earnings news, helped bolster shares of marijuana stocks in recent weeks.
Image source: Getty Images.
Since mid-March, Tilray stock has jumped 23%. Canopy Growth and Aurora stocks have both moved up about 9%. But the realization that the MORE Act has a big hurdle to clear in passing the Senate to become law has some cannabis investors taking profits from the recent run-up. Today, political website The Hill highlighted the struggles that Senate Majority Leader Charles Schumer will have to undergo to pass any marijuana reform bill in his chamber.
Now what
Some recent gains in cannabis shares came from positive earnings news, exclusive of any U.S. reform. Tilray announced its quarterly results last week, surprising investors with positive net income of $52.5 million when analysts had expected a loss. Its cannabis revenue increased 32%, while beverage alcohol revenue soared 64% compared to the year-ago period.
Tilray has been increasing its presence in the United States through acquisitions and investments. It said its U.S. subsidiaries, including hemp producer Manitoba Harvest, craft brewer SweetWater Brewing, and Breckenridge Distillery, are all profitable. Those businesses will be part of its distribution infrastructure should federal legalization pass.
Canopy Growth also has a presence in the U.S. through several multistate operators (MSOs). In a recent conference call with investors, large Canopy investor Constellation Brands' CEO, Bill Newlands, made a point of saying the company is happy with its investment because Canopy has achieved profitability in Canada and improved its position in the U.S. market. He added, "In the U.S., Canopy's THC strategy is anchored by strategic relationships with two profitable MSOs, Acreage and TerrAscend, both of which are positioned in high-growth Northeastern markets."
Legalization in the U.S. is a catalyst many cannabis investors are hoping for. The stocks are volatile as progress ebbs and flows toward that goal and investors watch to see how the Senate progresses on the issue. After a recent surge, today has been another volatile day in the sector.
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 – 18 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 owns Tilray, Inc. The Motley Fool owns 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. | Early Monday, the stocks of Tilray (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped about 5%. Mostly along party lines, that House vote effectively agreed to legalize marijuana by removing it from the list of federally banned drugs under the Controlled Substances Act. Today, political website The Hill highlighted the struggles that Senate Majority Leader Charles Schumer will have to undergo to pass any marijuana reform bill in his chamber. | Early Monday, the stocks of Tilray (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped about 5%. That progress toward legalization in the U.S., along with some positive earnings news, helped bolster shares of marijuana stocks in recent weeks. In a recent conference call with investors, large Canopy investor Constellation Brands' CEO, Bill Newlands, made a point of saying the company is happy with its investment because Canopy has achieved profitability in Canada and improved its position in the U.S. market. | Early Monday, the stocks of Tilray (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped about 5%. That progress toward legalization in the U.S., along with some positive earnings news, helped bolster shares of marijuana stocks in recent weeks. In a recent conference call with investors, large Canopy investor Constellation Brands' CEO, Bill Newlands, made a point of saying the company is happy with its investment because Canopy has achieved profitability in Canada and improved its position in the U.S. market. | Early Monday, the stocks of Tilray (NASDAQ: TLRY), Canopy Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ: ACB) all dropped about 5%. What happened Many Canadian cannabis stocks have been on the upswing over the past month as hope increased that the U.S. could be moving further along the path to legalizing marijuana. That progress toward legalization in the U.S., along with some positive earnings news, helped bolster shares of marijuana stocks in recent weeks. |
36569.0 | 2022-04-09 00:00:00 UTC | Thinking About Buying Cannabis Stocks? Use This Benchmark to Find Winners | ACB | https://www.nasdaq.com/articles/thinking-about-buying-cannabis-stocks-use-this-benchmark-to-find-winners | nan | nan | If you want to be a discerning investor, you'll need to know what benchmarks matter for the various kinds of stocks you might be interested in purchasing or selling. In the context of pure-play cannabis companies, one of the most important metrics to understand is the cost of cultivating one pound of marijuana.
Per-pound cultivation expenses aren't as easy to analyze as they might seem, though. As it turns out, there's more than one important wrinkle to be aware of, so let's dive in and investigate in more detail so that you'll get a new analytical tool for your cannabis investor's toolkit.
Image source: Getty Images.
Production costs are the name of the game
Though the exact cost will vary from business to business, the setting where cannabis is cultivated makes a huge impact, as it's much cheaper to grow it outdoors than in greenhouses or fully indoor facilities.
The chart above shows how businesses spend more than twice the amount per pound when they have their growing operation in a warehouse setting than when they grow it in fields. And once you're armed with this information, you also have a benchmark for comparing one company's cultivation costs to the industry median.
If it takes a business less money than the median to foster a pound of marijuana for the growing locations that it uses, that's a preliminary sign that it might be a decent investment.
There's more to picking winners than picking outdoor growers
The trouble with this method is that it's often hard to determine how a company grows the majority of its cannabis.
Thankfully, there's another metric which is useful in understanding cultivation efficiency: The cost of goods sold (COGS). Though COGS doesn't specifically take the growing location into account, it's a great measure for how much it costs a company to get its products into the hands of consumers.
TCNNF Cost of Goods Sold (% of Quarterly Revenues) data by YCharts
By depicting the COGS as a percentage of quarterly revenue, it's easy to see that Trulieve Cannabis (OTC: TCNNF) and Cresco Labs probably have more favorable unit economics than Aurora Cannabis. They spend less of their income on cultivating, harvesting, processing, and distributing their marijuana. They also have fatter gross margins, so it's no surprise that their shares tend to perform better over time, too. And all of the above means that Trulieve and Cresco Labs are probably more attractive for investment.
TCNNF data by YCharts
But successful investors make purchases of shares based on their judgments about the future performance of companies rather than their past exploits. Doing this is far easier than it might seem.
For example, when Trulieve recently announced its acquisition of 64,000 square feet of indoor cultivation space in Arizona, we should also be aware that the cannabis produced from there might be on the expensive side. Therefore, in future quarters, we might expect its COGS to slightly rise as a percentage of revenue as a result.
On the other hand, if a few quarters pass and its COGS as a percentage of revenue hasn't budged, we can infer that the cost to produce the marijuana that Trulieve is growing at the new facility isn't significantly different from its norm. And because it's a profitable company, we have another piece of evidence showing that growth in its revenue is indeed favorable for its long-term health. After all, if per-pound production costs keep rising at the same time as sales, it's entirely possible for a business to grow itself into becoming unprofitable.
In closing, be sure to keep an eye on cultivation expenses in comparison to the industry's median, and don't forget to use wider benchmarks like COGS to evaluate cannabis stocks. If you can understand what determines a company's unit economics, you're a long way toward understanding whether it's worth investing in.
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 – 18 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 owns 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. | TCNNF data by YCharts But successful investors make purchases of shares based on their judgments about the future performance of companies rather than their past exploits. For example, when Trulieve recently announced its acquisition of 64,000 square feet of indoor cultivation space in Arizona, we should also be aware that the cannabis produced from there might be on the expensive side. In closing, be sure to keep an eye on cultivation expenses in comparison to the industry's median, and don't forget to use wider benchmarks like COGS to evaluate cannabis stocks. | Thankfully, there's another metric which is useful in understanding cultivation efficiency: The cost of goods sold (COGS). TCNNF Cost of Goods Sold (% of Quarterly Revenues) data by YCharts By depicting the COGS as a percentage of quarterly revenue, it's easy to see that Trulieve Cannabis (OTC: TCNNF) and Cresco Labs probably have more favorable unit economics than Aurora Cannabis. TCNNF data by YCharts But successful investors make purchases of shares based on their judgments about the future performance of companies rather than their past exploits. | Production costs are the name of the game Though the exact cost will vary from business to business, the setting where cannabis is cultivated makes a huge impact, as it's much cheaper to grow it outdoors than in greenhouses or fully indoor facilities. TCNNF Cost of Goods Sold (% of Quarterly Revenues) data by YCharts By depicting the COGS as a percentage of quarterly revenue, it's easy to see that Trulieve Cannabis (OTC: TCNNF) and Cresco Labs probably have more favorable unit economics than Aurora Cannabis. On the other hand, if a few quarters pass and its COGS as a percentage of revenue hasn't budged, we can infer that the cost to produce the marijuana that Trulieve is growing at the new facility isn't significantly different from its norm. | In the context of pure-play cannabis companies, one of the most important metrics to understand is the cost of cultivating one pound of marijuana. TCNNF Cost of Goods Sold (% of Quarterly Revenues) data by YCharts By depicting the COGS as a percentage of quarterly revenue, it's easy to see that Trulieve Cannabis (OTC: TCNNF) and Cresco Labs probably have more favorable unit economics than Aurora Cannabis. After all, if per-pound production costs keep rising at the same time as sales, it's entirely possible for a business to grow itself into becoming unprofitable. |
36570.0 | 2022-04-07 00:00:00 UTC | Why Marijuana Stocks Dropped on Thursday | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-dropped-on-thursday-0 | nan | nan | What happened
Less than a week after the U.S. House of Representatives voted to legalize marijuana -- for only the second time ever in history -- enthusiasm for marijuana stocks is disappearing like smoke with both the door and windows open.
Since the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act was passed, shares of Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) have all headed in just one direction -- down. Today marks the third straight day of selling. Here's how things stand as of 12:50 p.m. ET:
Sundial Growers stock is down 8.1%.
Aurora Cannabis shares have lost 8.2%.
Canopy Growth stock is leading the whole sector lower with a 9.1% loss.
Image source: Getty Images.
So what
What's got marijuana investors so bummed out today? In a word: The U.S. Senate.
The U.S. House may have passed the MORE Act, you see, but it did that in 2020 as well -- only to see the bill die in the Senate. This time around, chances for Senate passage of a cannabis reform bill look somewhat brighter due to:
An election year where a new Pew poll shows 60% of voters favoring outright legalization of cannabis, and 91% favoring at least legalizing medicinal marijuana.
A year of budget deficits, where the latest data shows that marijuana taxes pumped up state budgets to the tune of $3.7 billion in extra tax revenue last year.
That being said, passage still isn't certain. And even if legalization does happen, investors may still be upset at the speed at which legalization is (not yet) moving. As MarijuanaMoment.net points out today, Senate Majority Leader Chuck Schumer originally promised to introduce the Cannabis Administration & Opportunity Act (CAOA -- the Senate's version of the House's MORE Act) in April -- and that may have led investors to hope for quick passage of a Senate bill to match the bill passed in the House.
But in his latest statement on the matter, Schumer clarified that he actually wants to introduce the bill "toward the end of April" (emphasis added).
Now what
Again, even assuming this target date gets met, legalization won't happen immediately thereafter. First, the CAOA must run through Senate committees as it's prepared for a vote. Then the vote must happen (and 60 "yea" votes will be needed to overcome a filibuster; Senate passage isn't certain).
Even then, the process isn't ended, because while the CAOA resembles the MORE Act in some respects, it's not a direct copy, and the Senate and House will need to reconcile their two passed bills into a single, final bill legalizing marijuana to send to the president. And then that bill will still need to win the President's approval. And the president may oppose legalization!
Long story short, last week marked a victory for advocates of legalizing marijuana, but there's still a long road ahead before marijuana investors reach the (presumed) bonanza of sales growth that legalization will bring. As investors begin to realize how far off full legalization may remain, the initial euphoria over House passage appears to be wearing off 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. | Since the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act was passed, shares of Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) have all headed in just one direction -- down. This time around, chances for Senate passage of a cannabis reform bill look somewhat brighter due to: An election year where a new Pew poll shows 60% of voters favoring outright legalization of cannabis, and 91% favoring at least legalizing medicinal marijuana. But in his latest statement on the matter, Schumer clarified that he actually wants to introduce the bill "toward the end of April" (emphasis added). | Since the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act was passed, shares of Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) have all headed in just one direction -- down. As MarijuanaMoment.net points out today, Senate Majority Leader Chuck Schumer originally promised to introduce the Cannabis Administration & Opportunity Act (CAOA -- the Senate's version of the House's MORE Act) in April -- and that may have led investors to hope for quick passage of a Senate bill to match the bill passed in the House. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | Since the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act was passed, shares of Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) have all headed in just one direction -- down. This time around, chances for Senate passage of a cannabis reform bill look somewhat brighter due to: An election year where a new Pew poll shows 60% of voters favoring outright legalization of cannabis, and 91% favoring at least legalizing medicinal marijuana. As MarijuanaMoment.net points out today, Senate Majority Leader Chuck Schumer originally promised to introduce the Cannabis Administration & Opportunity Act (CAOA -- the Senate's version of the House's MORE Act) in April -- and that may have led investors to hope for quick passage of a Senate bill to match the bill passed in the House. | Since the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act was passed, shares of Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) have all headed in just one direction -- down. As MarijuanaMoment.net points out today, Senate Majority Leader Chuck Schumer originally promised to introduce the Cannabis Administration & Opportunity Act (CAOA -- the Senate's version of the House's MORE Act) in April -- and that may have led investors to hope for quick passage of a Senate bill to match the bill passed in the House. Even then, the process isn't ended, because while the CAOA resembles the MORE Act in some respects, it's not a direct copy, and the Senate and House will need to reconcile their two passed bills into a single, final bill legalizing marijuana to send to the president. |
36571.0 | 2022-04-01 00:00:00 UTC | Why Marijuana Stocks Popped on Friday | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-popped-on-friday | nan | nan | What happened
This is it -- the day the U.S. House of Representatives votes on legalizing marijuana.
As we've been discussing all week long (and even back into late last week), the House has been gearing up for today's vote on the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, and floor discussion of the bill to legalize marijuana at the federal level actually began yesterday. Today, assuming no hiccups, discussion will wrap up and the bill will receive a vote by the full House.
It's assumed the MORE Act will pass today (it passed by a huge margin two years ago, after all). And marijuana investors are enthusiastic heading into the vote, bidding up shares of Canopy Growth (NASDAQ: CGC) by 2.6%, Sundial Growers (NASDAQ: SNDL) by 3.3%, and Aurora Cannabis (NASDAQ: ACB) by 3.5% -- all numbers as of 11:50 a.m. ET.
Image source: Getty Images.
So what
House Speaker Nancy Pelosi says she's "all for" passing the MORE Act today, and even opponents of the bill expect it to pass. As MarijuanaMoment.net observed this morning, "Rep. Cliff Bentz (R-OR), who managed floor time in opposition to the reform bill, acknowledged that it has been 'obvious for years that at some point marijuana was going to be formerly legalized.'"
As we've discussed previously, the bigger question is how the MORE Act will be reconciled -- after passing -- with competing bills such as Congresswoman Nancy Mace's "States Reform Act" in the House (which will be voted on later) and the Cannabis Administration & Opportunity Act (CAOA), due to be voted on in the Senate in April.
And that remains to be seen.
Now what
In the meantime, though, let's consider another reason why legislators in both the House and the Senate might be inclined to compromise and ensure that the several competing marijuana legalization bills get integrated into a single final bill -- and passed.
As CNBC points out today, making marijuana legal won't make marijuana free -- the opposite is more accurate. Under the MORE Act, legal weed will be sold with a 5% federal tax, on top of any state taxes levied -- and over time, that federal tax will rise to 8%. MarijuanaMoment notes that a Congressional Budget Office (CBO) report released Wednesday predicts legalizing weed will contribute "billions in revenues" for the IRS.
So revenue-hungry legislators may be more inclined to vote for the MORE Act, and that's a good reason to be optimistic about passage. That being said, another thing investors in marijuana stocks need to consider is the potential depressive effect that added federal taxes will have on marijuana sales in states where the drug is already legal. In states where marijuana is state-legal, but federally illegal at present, "20%" appears to be the most common tax rate on retail sales of marijuana -- but in extreme cases, rates actually rise as high as 43% and more. Throw an 8% federal tax on top of that, and we're talking all-in tax rates in excess of 50%.
At prices that high, it's an open question whether even federal legalization will significantly increase marijuana sales.
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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. | And marijuana investors are enthusiastic heading into the vote, bidding up shares of Canopy Growth (NASDAQ: CGC) by 2.6%, Sundial Growers (NASDAQ: SNDL) by 3.3%, and Aurora Cannabis (NASDAQ: ACB) by 3.5% -- all numbers as of 11:50 a.m. As we've been discussing all week long (and even back into late last week), the House has been gearing up for today's vote on the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, and floor discussion of the bill to legalize marijuana at the federal level actually began yesterday. As MarijuanaMoment.net observed this morning, "Rep. Cliff Bentz (R-OR), who managed floor time in opposition to the reform bill, acknowledged that it has been 'obvious for years that at some point marijuana was going to be formerly legalized.'" | And marijuana investors are enthusiastic heading into the vote, bidding up shares of Canopy Growth (NASDAQ: CGC) by 2.6%, Sundial Growers (NASDAQ: SNDL) by 3.3%, and Aurora Cannabis (NASDAQ: ACB) by 3.5% -- all numbers as of 11:50 a.m. As we've discussed previously, the bigger question is how the MORE Act will be reconciled -- after passing -- with competing bills such as Congresswoman Nancy Mace's "States Reform Act" in the House (which will be voted on later) and the Cannabis Administration & Opportunity Act (CAOA), due to be voted on in the Senate in April. As CNBC points out today, making marijuana legal won't make marijuana free -- the opposite is more accurate. | And marijuana investors are enthusiastic heading into the vote, bidding up shares of Canopy Growth (NASDAQ: CGC) by 2.6%, Sundial Growers (NASDAQ: SNDL) by 3.3%, and Aurora Cannabis (NASDAQ: ACB) by 3.5% -- all numbers as of 11:50 a.m. As we've been discussing all week long (and even back into late last week), the House has been gearing up for today's vote on the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, and floor discussion of the bill to legalize marijuana at the federal level actually began yesterday. As we've discussed previously, the bigger question is how the MORE Act will be reconciled -- after passing -- with competing bills such as Congresswoman Nancy Mace's "States Reform Act" in the House (which will be voted on later) and the Cannabis Administration & Opportunity Act (CAOA), due to be voted on in the Senate in April. | And marijuana investors are enthusiastic heading into the vote, bidding up shares of Canopy Growth (NASDAQ: CGC) by 2.6%, Sundial Growers (NASDAQ: SNDL) by 3.3%, and Aurora Cannabis (NASDAQ: ACB) by 3.5% -- all numbers as of 11:50 a.m. Today, assuming no hiccups, discussion will wrap up and the bill will receive a vote by the full House. As we've discussed previously, the bigger question is how the MORE Act will be reconciled -- after passing -- with competing bills such as Congresswoman Nancy Mace's "States Reform Act" in the House (which will be voted on later) and the Cannabis Administration & Opportunity Act (CAOA), due to be voted on in the Senate in April. |
36572.0 | 2022-04-01 00:00:00 UTC | CANADA STOCKS-Toronto index up as energy, mining stocks gain | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-up-as-energy-mining-stocks-gain | nan | nan | By Amal S
April 1 (Reuters) - Canada's main stock index rose on Friday as heavyweight energy and mining stocks gained, while cybersecurity firm BlackBerry dived to the bottom of the index after its revenue missed market estimates.
At 9:53 a.m. ET (13:53 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 94.2 points, or 0.43%, at 21,984.36. The index was up 0.03% so far this week.
The energy sector .SPTTEN climbed 1.6%, while the materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 1.1%.
Both sectors are down 1.75% and 0.3% respectively so far this week and are among the top drags on the index, tracking a pullback in commodity prices, amid signs of progress in Russia-Ukraine peace talks and plans to release crude reserves. O/R
"It's certainly been an up and down week as the market has been optimistic on numerous occasions about hostilities in Ukraine ending, and then seeing those hopes dashed," said Stuart Cole, head macro economist at Equiti Capital.
The healthcare sector .GSPTTHC rose 0.8% with pot producers Canopy Growth WEED.TO, Tilray Brands TLRY.TO, Aurora Cannabis ACB.TO up between 3.2% and 4.5%.
Adding further gains were Toronto-listed tech stocks .SPTTTK, up 0.3%, tracking gains in U.S. tech-heavy Nasdaq index. Shopify Inc SHOP.TO, Canada's third-biggest company by market value, rose 1.8%.
The financials sector .SPTTFS gained 0.2%, while the industrials sector .GSPTTIN fell 0.6%.
Despite the recent market volatility caused by the Ukraine war and rising inflation, the TSX has outperformed many global peers thanks to surging commodity prices.
Among individual stocks, BlackBerry Ltd BB.TO fell 9.8% after the company missed fourth-quarter revenue estimates as growth at its cybersecurity business, its biggest, was flat due to increased competition.
HIGHLIGHTS
The TSX posted 12 new 52-week highs and two new lows.
Across Canadian issues, there were 36 new 52-week highs and 16 new lows, with total volume of 51.47 million shares.
(Reporting by Amal S in Bengaluru; Editing by Vinay Dwivedi)
((Amal.S@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 3677;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The healthcare sector .GSPTTHC rose 0.8% with pot producers Canopy Growth WEED.TO, Tilray Brands TLRY.TO, Aurora Cannabis ACB.TO up between 3.2% and 4.5%. Both sectors are down 1.75% and 0.3% respectively so far this week and are among the top drags on the index, tracking a pullback in commodity prices, amid signs of progress in Russia-Ukraine peace talks and plans to release crude reserves. O/R "It's certainly been an up and down week as the market has been optimistic on numerous occasions about hostilities in Ukraine ending, and then seeing those hopes dashed," said Stuart Cole, head macro economist at Equiti Capital. | The healthcare sector .GSPTTHC rose 0.8% with pot producers Canopy Growth WEED.TO, Tilray Brands TLRY.TO, Aurora Cannabis ACB.TO up between 3.2% and 4.5%. By Amal S April 1 (Reuters) - Canada's main stock index rose on Friday as heavyweight energy and mining stocks gained, while cybersecurity firm BlackBerry dived to the bottom of the index after its revenue missed market estimates. Adding further gains were Toronto-listed tech stocks .SPTTTK, up 0.3%, tracking gains in U.S. tech-heavy Nasdaq index. | The healthcare sector .GSPTTHC rose 0.8% with pot producers Canopy Growth WEED.TO, Tilray Brands TLRY.TO, Aurora Cannabis ACB.TO up between 3.2% and 4.5%. By Amal S April 1 (Reuters) - Canada's main stock index rose on Friday as heavyweight energy and mining stocks gained, while cybersecurity firm BlackBerry dived to the bottom of the index after its revenue missed market estimates. Both sectors are down 1.75% and 0.3% respectively so far this week and are among the top drags on the index, tracking a pullback in commodity prices, amid signs of progress in Russia-Ukraine peace talks and plans to release crude reserves. | The healthcare sector .GSPTTHC rose 0.8% with pot producers Canopy Growth WEED.TO, Tilray Brands TLRY.TO, Aurora Cannabis ACB.TO up between 3.2% and 4.5%. By Amal S April 1 (Reuters) - Canada's main stock index rose on Friday as heavyweight energy and mining stocks gained, while cybersecurity firm BlackBerry dived to the bottom of the index after its revenue missed market estimates. The index was up 0.03% so far this week. |
36573.0 | 2022-03-31 00:00:00 UTC | Why Marijuana Stocks Dropped on Thursday | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-dropped-on-thursday | nan | nan | What happened
"Buy the rumor, sell the news" goes the old stock market maxim. But what do you do when there's new news that just keeps coming -- as is the case with marijuana stocks this week?
Apparently, you buy, then sell, then buy again, then sell again -- over and over and over again, as each successive headline rolls out. Today appears to be one of the selling days, as shares of Aurora Cannabis (NASDAQ: ACB) slid 3.1%, Tilray (NASDAQ: TLRY) tanked 3.4%, and Canopy Growth (NASDAQ: CGC) led the sector lower with a 3.6% loss as of 12:20 p.m. ET.
Image source: Getty Images.
So what
News today on the marijuana legalization front is actually pretty positive, with the Rules Committee of the U.S. House of Representatives having just voted to allow the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act to proceed to the House floor for a full vote on Friday.
As MJBizDaily.com reports, the comprehensive marijuana legalization bill is expected to sail through its House vote tomorrow, with D.C.-based think tank The Liaison Group predicting a tally similar to the one that passed this same law two years ago -- about 228 for legalization, and 164 against. Indeed, given the popularity of the idea of legalizing cannabis, it's possible we'll see even more representatives vote in favor of legalization this time around, as it will play well among voters in an election year.
Now what
And granted, there's still a Senate vote to survive, and President Biden to convince after that. But the point about this being an election year (the last MORE Act vote took place right after an election) could be important.
As you may recall, it was the U.S. Senate that killed the MORE Act the last time around, but with one-third of Senate seats up for election this year, there's likely going to be more pressure for "yay" votes in the Senate this time. In 2020, only 11 states (and the District of Columbia) had legalized marijuana entirely, and legalization was supported by 65% of voters. Today, 18 states (and D.C. and Guam, too) have legalized weed -- and a recent Pew poll found an astonishing 91% of Americans think marijuana should be legal (at least for medicinal purposes).
Long story short, while many pundits still believe the MORE Act will fail in the Senate, strong support among voters could result in a surprise vote to legalize the drug in both houses of Congress this year. It's still anybody's guess, of course, how investors would respond to such a surprise (if there was no rumor, would you still "sell the news?").
One thing is certain, though: If legalization does happen, it will take away marijuana stocks' final excuse for failing to turn a profit from selling a finally legal drug. Neither Aurora nor Tilray has earned any profit from selling cannabis since 2018, after all, and Canopy Growth has been losing money even longer. Once marijuana finally does get legalized, they're going to want to fix that situation, and quick, or suffer the consequences when investors decide these companies simply aren't capable of earning a profit.
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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. | Today appears to be one of the selling days, as shares of Aurora Cannabis (NASDAQ: ACB) slid 3.1%, Tilray (NASDAQ: TLRY) tanked 3.4%, and Canopy Growth (NASDAQ: CGC) led the sector lower with a 3.6% loss as of 12:20 p.m. Long story short, while many pundits still believe the MORE Act will fail in the Senate, strong support among voters could result in a surprise vote to legalize the drug in both houses of Congress this year. Neither Aurora nor Tilray has earned any profit from selling cannabis since 2018, after all, and Canopy Growth has been losing money even longer. | Today appears to be one of the selling days, as shares of Aurora Cannabis (NASDAQ: ACB) slid 3.1%, Tilray (NASDAQ: TLRY) tanked 3.4%, and Canopy Growth (NASDAQ: CGC) led the sector lower with a 3.6% loss as of 12:20 p.m. What happened "Buy the rumor, sell the news" goes the old stock market maxim. One thing is certain, though: If legalization does happen, it will take away marijuana stocks' final excuse for failing to turn a profit from selling a finally legal drug. | Today appears to be one of the selling days, as shares of Aurora Cannabis (NASDAQ: ACB) slid 3.1%, Tilray (NASDAQ: TLRY) tanked 3.4%, and Canopy Growth (NASDAQ: CGC) led the sector lower with a 3.6% loss as of 12:20 p.m. So what News today on the marijuana legalization front is actually pretty positive, with the Rules Committee of the U.S. House of Representatives having just voted to allow the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act to proceed to the House floor for a full vote on Friday. One thing is certain, though: If legalization does happen, it will take away marijuana stocks' final excuse for failing to turn a profit from selling a finally legal drug. | Today appears to be one of the selling days, as shares of Aurora Cannabis (NASDAQ: ACB) slid 3.1%, Tilray (NASDAQ: TLRY) tanked 3.4%, and Canopy Growth (NASDAQ: CGC) led the sector lower with a 3.6% loss as of 12:20 p.m. What happened "Buy the rumor, sell the news" goes the old stock market maxim. Long story short, while many pundits still believe the MORE Act will fail in the Senate, strong support among voters could result in a surprise vote to legalize the drug in both houses of Congress this year. |
36574.0 | 2022-03-31 00:00:00 UTC | CANADA STOCKS-Toronto index set for best monthly gain in five | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-set-for-best-monthly-gain-in-five | nan | nan | By Amal S
March 31 (Reuters) - Canada's commodity-heavy main stock index hit a record high on Thursday and was on track for its best monthly performance in five, as a rally in gold prices lifted precious metal miners.
At 9:41 a.m. ET (13:41 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 78.12 points, or 0.35%, at 22,154.08..
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 0.8% as gold futures GCc1 rose 0.2% to $1,937.1 an ounce. GOL/
The renewed interest in safe-haven gold came after Ukrainian President Volodymyr Zelenskiy said the country was prepared for new Russian attacks and that no quick resolution to the conflict was expected. Both the countries will, however, resume their peace talks online on April 1.
"Being the last day of the month and the last day of the quarter, so far equities in general are pretty quiet around the world," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Despite the recent market gyrations caused by the Ukraine war and unruly inflation, the TSX was set to post its biggest monthly gain since October thanks to surging commodity prices.
The index was also on track for its second quarter of gains, outperforming U.S. stocks which were eyeing their worst quarter since the pandemic crash in 2020.
"It is not unusual in this kind of an environment where commodity prices are stronger and equities are weakened," Cieszynski said, referring to the TSX outperformance.
Capping further advances on Thursday, the healthcare sector .GSPTTHC fell more than 1% on weakness in pot stocks such as Tilray Inc TLRY.O, Canopy Growth WEED.TO and Aurora Cannabis ACB.TO.
The energy sector .SPTTEN inched higher despite a slump in oil prices, taking its gains for this month to 7.5%.O/R
On the economic front, data showed the Canadian economy grew for a ninth consecutive month in February, following a January gain that met expectations.
(Reporting by Amal S in Bengaluru; Editing by Aditya Soni)
((Amal.S@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 3677;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Capping further advances on Thursday, the healthcare sector .GSPTTHC fell more than 1% on weakness in pot stocks such as Tilray Inc TLRY.O, Canopy Growth WEED.TO and Aurora Cannabis ACB.TO. By Amal S March 31 (Reuters) - Canada's commodity-heavy main stock index hit a record high on Thursday and was on track for its best monthly performance in five, as a rally in gold prices lifted precious metal miners. GOL/ The renewed interest in safe-haven gold came after Ukrainian President Volodymyr Zelenskiy said the country was prepared for new Russian attacks and that no quick resolution to the conflict was expected. | Capping further advances on Thursday, the healthcare sector .GSPTTHC fell more than 1% on weakness in pot stocks such as Tilray Inc TLRY.O, Canopy Growth WEED.TO and Aurora Cannabis ACB.TO. By Amal S March 31 (Reuters) - Canada's commodity-heavy main stock index hit a record high on Thursday and was on track for its best monthly performance in five, as a rally in gold prices lifted precious metal miners. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, added 0.8% as gold futures GCc1 rose 0.2% to $1,937.1 an ounce. | Capping further advances on Thursday, the healthcare sector .GSPTTHC fell more than 1% on weakness in pot stocks such as Tilray Inc TLRY.O, Canopy Growth WEED.TO and Aurora Cannabis ACB.TO. By Amal S March 31 (Reuters) - Canada's commodity-heavy main stock index hit a record high on Thursday and was on track for its best monthly performance in five, as a rally in gold prices lifted precious metal miners. The index was also on track for its second quarter of gains, outperforming U.S. stocks which were eyeing their worst quarter since the pandemic crash in 2020. | Capping further advances on Thursday, the healthcare sector .GSPTTHC fell more than 1% on weakness in pot stocks such as Tilray Inc TLRY.O, Canopy Growth WEED.TO and Aurora Cannabis ACB.TO. By Amal S March 31 (Reuters) - Canada's commodity-heavy main stock index hit a record high on Thursday and was on track for its best monthly performance in five, as a rally in gold prices lifted precious metal miners. ET (13:41 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 78.12 points, or 0.35%, at 22,154.08.. |
36575.0 | 2022-03-28 00:00:00 UTC | Why Marijuana Stocks Dropped on Monday | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-dropped-on-monday | nan | nan | What happened
This is it -- the week that marijuana takes its next step toward legalization. The House Rules Committee is scheduled to take up the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act today, and prepare it for a floor vote later in the week.
But if that's true, why are marijuana stocks going down today? As of 10 a.m. ET, not only is Sundial Growers (NASDAQ: SNDL) stock down 7.6%, but Aurora Cannabis (NASDAQ: ACB) is down 9.1%, and Canopy Growth (NASDAQ: CGC) stock is leading the whole cannabis sector lower with a 10.5% loss!
So what
The Hill reports today that the MORE Act "has near-uniform support among Democrats and a top ally in Senate Majority Leader Charles Schumer," whose chamber "unanimously passed a bill to expand scientific and medical research on marijuana and its compounds" on Thursday.
Yet supporters may still be nervous. The Rules Committee meeting scheduled for Wednesday was originally planned for today. It's unclear what this means, if anything, but supporters of marijuana legalization have been disappointed before. In fact, this same MORE Act passed a House vote in December 2020 -- only to die later in the Senate.
Image source: Getty Images.
Now what
Should this delay worry advocates of marijuana legalization? I don't think so.
The unexpected two-day delay notwithstanding, a 483-page report prepared by the House Judiciary Committee for use by legislators voting on the MORE Act makes a compelling case for passing the law. The report points out how "public support for making marijuana legal has increased over the past two decades," how the trend of increasing "state-level legalization of marijuana has placed states in apparent conflict with federal law" and made it hard for federal law enforcement to do its job, even as cannabis companies struggle to do business without access to financial services (because banks don't want to run afoul of federal law).
A report today by MarijuanaMoment.net -- run by Tom Angell, a longtime legalization activist -- argues that "the MORE Act presents solutions to these challenges and would help align federal policy with [laws] that have been enacted in a majority of states as the legalization movement continues to expand."
Simply put, it makes sense that this law should pass this week -- probably by Friday.
But given how powerfully marijuana stocks performed last week -- with Canopy stock up 22%, Aurora Cannabis rising 26%, and Sundial shares notching a 56% gain -- investors may be thinking that discretion is the better part of value here.
That's probably why they're selling off marijuana stocks today -- just in case history repeats itself.
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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, not only is Sundial Growers (NASDAQ: SNDL) stock down 7.6%, but Aurora Cannabis (NASDAQ: ACB) is down 9.1%, and Canopy Growth (NASDAQ: CGC) stock is leading the whole cannabis sector lower with a 10.5% loss! The House Rules Committee is scheduled to take up the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act today, and prepare it for a floor vote later in the week. So what The Hill reports today that the MORE Act "has near-uniform support among Democrats and a top ally in Senate Majority Leader Charles Schumer," whose chamber "unanimously passed a bill to expand scientific and medical research on marijuana and its compounds" on Thursday. | ET, not only is Sundial Growers (NASDAQ: SNDL) stock down 7.6%, but Aurora Cannabis (NASDAQ: ACB) is down 9.1%, and Canopy Growth (NASDAQ: CGC) stock is leading the whole cannabis sector lower with a 10.5% loss! But given how powerfully marijuana stocks performed last week -- with Canopy stock up 22%, Aurora Cannabis rising 26%, and Sundial shares notching a 56% gain -- investors may be thinking that discretion is the better part of value here. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | ET, not only is Sundial Growers (NASDAQ: SNDL) stock down 7.6%, but Aurora Cannabis (NASDAQ: ACB) is down 9.1%, and Canopy Growth (NASDAQ: CGC) stock is leading the whole cannabis sector lower with a 10.5% loss! The report points out how "public support for making marijuana legal has increased over the past two decades," how the trend of increasing "state-level legalization of marijuana has placed states in apparent conflict with federal law" and made it hard for federal law enforcement to do its job, even as cannabis companies struggle to do business without access to financial services (because banks don't want to run afoul of federal law). But given how powerfully marijuana stocks performed last week -- with Canopy stock up 22%, Aurora Cannabis rising 26%, and Sundial shares notching a 56% gain -- investors may be thinking that discretion is the better part of value here. | ET, not only is Sundial Growers (NASDAQ: SNDL) stock down 7.6%, but Aurora Cannabis (NASDAQ: ACB) is down 9.1%, and Canopy Growth (NASDAQ: CGC) stock is leading the whole cannabis sector lower with a 10.5% loss! It's unclear what this means, if anything, but supporters of marijuana legalization have been disappointed before. The unexpected two-day delay notwithstanding, a 483-page report prepared by the House Judiciary Committee for use by legislators voting on the MORE Act makes a compelling case for passing the law. |
36576.0 | 2022-03-28 00:00:00 UTC | CANADA STOCKS-Toronto index down as energy, pot stocks fall | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-down-as-energy-pot-stocks-fall | nan | nan | By Amal S
March 28 (Reuters) - Canada's commodity-heavy main stock index fell on Monday, as energy stocks tracked oil prices that declined on concerns over demand from major consumer China, while weakness in pot producers weighed on healthcare shares.
At 9:50 a.m. ET (13:50 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 70.77 points, or 0.32%, at 21,935.17, after marking its longest weekly winning streak since December in the last session.
The energy shares .SPTTEN dropped 2.6% as oil prices tumbled more than $6 on fears over weaker fuel demand in China following lockdown measures in the country's financial hub, Shanghai, aimed at curbing a surge in COVID-19 infections. However, the sub-index was set for its fourth consecutive monthly gain.O/R
"The two-day restrictions imposed in Shanghai are evidence that the pandemic is not yet over and inevitably, given the implications for global growth, have put oil prices under pressure," said Russ Mould, director at AJ Bell.
The ongoing Russia-Ukraine war, concerns around soaring inflation have roiled global markets in recent months, however, the TSX was set for its best monthly gain since Oct. 2021, buoyed by surging commodity prices.
The healthcare sub-index fell 5.5%, retreating from over a month high hit in the prior session, as pot producers including Tilray Brands TLRY.O, Aurora Cannabis ACB.TO, Canopy Growth WEED.TO and Cronos Group CRON.TO fell between 5.8% and 8.2%.
Investors awaited a hearing on cannabis decriminalization bill by the U.S. House of Representatives due later in the day.
The financial sector .SPTTFS, which accounts for nearly 30% of the Toronto market's value, fell 0.1%, while the industrial sector .GSPTTIN rose 0.4%.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 2.0% as a spike in U.S. Treasury yields, a stronger dollar and hopes of progress in Russia-Ukraine peace talks dented demand for bullion. GOL/
(Reporting by Amal S in Bengaluru; Editing by Vinay Dwivedi)
((Amal.S@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 3677;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The healthcare sub-index fell 5.5%, retreating from over a month high hit in the prior session, as pot producers including Tilray Brands TLRY.O, Aurora Cannabis ACB.TO, Canopy Growth WEED.TO and Cronos Group CRON.TO fell between 5.8% and 8.2%. The energy shares .SPTTEN dropped 2.6% as oil prices tumbled more than $6 on fears over weaker fuel demand in China following lockdown measures in the country's financial hub, Shanghai, aimed at curbing a surge in COVID-19 infections. However, the sub-index was set for its fourth consecutive monthly gain.O/R "The two-day restrictions imposed in Shanghai are evidence that the pandemic is not yet over and inevitably, given the implications for global growth, have put oil prices under pressure," said Russ Mould, director at AJ Bell. | The healthcare sub-index fell 5.5%, retreating from over a month high hit in the prior session, as pot producers including Tilray Brands TLRY.O, Aurora Cannabis ACB.TO, Canopy Growth WEED.TO and Cronos Group CRON.TO fell between 5.8% and 8.2%. By Amal S March 28 (Reuters) - Canada's commodity-heavy main stock index fell on Monday, as energy stocks tracked oil prices that declined on concerns over demand from major consumer China, while weakness in pot producers weighed on healthcare shares. The energy shares .SPTTEN dropped 2.6% as oil prices tumbled more than $6 on fears over weaker fuel demand in China following lockdown measures in the country's financial hub, Shanghai, aimed at curbing a surge in COVID-19 infections. | The healthcare sub-index fell 5.5%, retreating from over a month high hit in the prior session, as pot producers including Tilray Brands TLRY.O, Aurora Cannabis ACB.TO, Canopy Growth WEED.TO and Cronos Group CRON.TO fell between 5.8% and 8.2%. By Amal S March 28 (Reuters) - Canada's commodity-heavy main stock index fell on Monday, as energy stocks tracked oil prices that declined on concerns over demand from major consumer China, while weakness in pot producers weighed on healthcare shares. However, the sub-index was set for its fourth consecutive monthly gain.O/R "The two-day restrictions imposed in Shanghai are evidence that the pandemic is not yet over and inevitably, given the implications for global growth, have put oil prices under pressure," said Russ Mould, director at AJ Bell. | The healthcare sub-index fell 5.5%, retreating from over a month high hit in the prior session, as pot producers including Tilray Brands TLRY.O, Aurora Cannabis ACB.TO, Canopy Growth WEED.TO and Cronos Group CRON.TO fell between 5.8% and 8.2%. By Amal S March 28 (Reuters) - Canada's commodity-heavy main stock index fell on Monday, as energy stocks tracked oil prices that declined on concerns over demand from major consumer China, while weakness in pot producers weighed on healthcare shares. However, the sub-index was set for its fourth consecutive monthly gain.O/R "The two-day restrictions imposed in Shanghai are evidence that the pandemic is not yet over and inevitably, given the implications for global growth, have put oil prices under pressure," said Russ Mould, director at AJ Bell. |
36577.0 | 2022-03-25 00:00:00 UTC | Stock Market Today: Major Indexes Post Weekly Gains | ACB | https://www.nasdaq.com/articles/stock-market-today%3A-major-indexes-post-weekly-gains | nan | nan | U.S. equities slipped into the weekend on a quiet note, especially compared to how much noise the market has been making of late.
Traders finished the week's heavy menu of Fed rate-hike talk and developments in Ukraine with just a bite of economic news and little else to digest Friday.
SEE MORE The 15 Best Growth Stocks to Buy for 2022
Among the data, the University of Michigan Index of Consumer Sentiment declined for a third straight month in March. At 59.4, it was the survey's lowest reading in more than a decade.
Meanwhile, a combination of low inventories, higher prices and rising mortgage rates caused pending home sales to drop by 4.1% in February, surprising economists who forecast a gain of 1.0%. The reading took a toll on homebuilders and housing-related stocks, including PulteGroup (PHM, -1.7%), Lowe’s (LOW, -2.9%) and Pool Corp. (POOL, -4.3%).
The Dow Jones Industrial Average (+0.4% to 34,861) logged a modest increase, putting it 0.3% higher for the week. The S&P 500 (+0.5% to 4,543) and the Nasdaq Composite (-0.2% to 14,169) closed the week more solidly in the green, up 1.8% and 2.0%, respectively.
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YCharts
Other news in thestock market today
The small-cap Russell 2000 finished with a 0.1% gain to 2,077.
U.S. crude futures rose 1.4% to settle at $113.90 per barrel amid reports of a Yemen rebel attack on a Saudi Arabia oil facility, bringing their weekly advance to 10.5%.
Gold futures slipped 0.4% to finish at $1,954.20 an ounce. For the week, gold futures gained 1.3%.
Bitcoin continued its advance, up 1.2% Friday to bring its gains since Monday morning to 7.8%. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
News that the House of Representatives will vote next week on a bill that would remove cannabis from the list of federally controlled substances and end criminal measures associated with it lit a fire under marijuana stocks today. The House passed a similar bill in December 2020, though it did not advance in the Senate. Among the day's big gainers were Aurora Cannabis (ACB, +10.4%), Canopy Growth (CGC, +10.0%) and Tilray Brands (TLRY, +22.8%).
Tesla (TSLA, -0.3%) rival Nio (NIO) fell 9.4% after the company reported earnings. In its fourth quarter, the Chinese electric vehicle maker reported higher-than-expected revenue of $1.55 billion and deliveries of 25,034. However, NIO guided for current-quarter revenue to arrive between $1.51 billion and $1.57 billion, lower than the $1.66 billion analysts, on average, are expecting. The firm's first-quarter delivery guidance also came in below the consensus estimate. Still, Mizuho Securities analyst Vijay Rakesh says Nio is "is positioned well for the long-term with solid roadmap execution and new launches," and maintained a Buy rating on the stock.
Two Fresh Faces in the Kip 25
The pros largely remain bullish despite potential near-term turbulence.
SEE MORE 2022's Best Mutual Funds in 401(k) Retirement Plans
We mentioned yesterday that we’ve begun the third year of the post-COVID-19 bull market, and year threes have historically been rocky. Earnings guidance for the current quarter could be a sign of what’s to come.
As of today, 95 S&P 500 firms have issued first-quarter earnings per share (EPS) guidance, says John Butters, senior earnings analyst for FactSet. Of those, 66 issued negative guidance (higher than the five-year average of 59), while just 29 issued positive guidance (well below the five-year average of 40).
That could make for a tumultuous Q1 earnings season ahead, though pros looking out across the full year are still optimistic. Butters says analysts’ S&P 500 price targets imply a 16.8% gain for the index over the next 12 months.
Investors looking to maintain their sanity until the proverbial storm clouds lift might find comfort in placing their capital in skilled and experienced hands. A small but growing group of actively managed exchange-traded funds (ETFs) can be a great place to start, and new options are emerging by the day. Just look at Capital Group's recent entry into the space for proof.
As for folks looking to invest anywhere – be it through their brokerages, IRAs or 401(k)s – they might want to pay attention to our recently updated Kip 25. Kiplinger’s 25 favorite low-fee mutual funds fill just about every portfolio need. From core stock funds to tactical products to fixed-income offerings, each and every fund features human portfolio managers, low annual fees and zero sales charges.
SEE MORE Hedge Funds' 25 Top Blue-Chip Stocks to Buy Now
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the day's big gainers were Aurora Cannabis (ACB, +10.4%), Canopy Growth (CGC, +10.0%) and Tilray Brands (TLRY, +22.8%). Meanwhile, a combination of low inventories, higher prices and rising mortgage rates caused pending home sales to drop by 4.1% in February, surprising economists who forecast a gain of 1.0%. U.S. crude futures rose 1.4% to settle at $113.90 per barrel amid reports of a Yemen rebel attack on a Saudi Arabia oil facility, bringing their weekly advance to 10.5%. | Among the day's big gainers were Aurora Cannabis (ACB, +10.4%), Canopy Growth (CGC, +10.0%) and Tilray Brands (TLRY, +22.8%). Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice. As of today, 95 S&P 500 firms have issued first-quarter earnings per share (EPS) guidance, says John Butters, senior earnings analyst for FactSet. | Among the day's big gainers were Aurora Cannabis (ACB, +10.4%), Canopy Growth (CGC, +10.0%) and Tilray Brands (TLRY, +22.8%). Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.) News that the House of Representatives will vote next week on a bill that would remove cannabis from the list of federally controlled substances and end criminal measures associated with it lit a fire under marijuana stocks today. | Among the day's big gainers were Aurora Cannabis (ACB, +10.4%), Canopy Growth (CGC, +10.0%) and Tilray Brands (TLRY, +22.8%). For the week, gold futures gained 1.3%. Butters says analysts’ S&P 500 price targets imply a 16.8% gain for the index over the next 12 months. |
36578.0 | 2022-03-25 00:00:00 UTC | 5 Top Marijuana Stocks To Watch Amid Potential Legalization Vote Next Week | ACB | https://www.nasdaq.com/articles/5-top-marijuana-stocks-to-watch-amid-potential-legalization-vote-next-week | nan | nan | Are These The Best Marijuana Stocks To Buy In The Stock Market Today?
As the Congress votes on legalizing marijuana in the country next week, marijuana stocks could be in focus once again. After all, in recent years, marijuana has begun to see wider acceptance in a growing number of regions for medical or recreational use. As such, it is now an industry that has recorded $24 billion in sales last year. By legalizing marijuana throughout the country, it could likely propel marijuana sales further. And by extension, this would mean higher valuations for cannabis companies in the stock market.
If you have not been keeping up with the industry, Cresco Labs (OTCMKTS: CRLBF) has recently been making headlines. This is thanks to the company’s announcement on Tuesday to acquire Columbia Care (OTCMKTS: CCHWF). The acquisition, valued at a whopping $2 billion, will bring the two companies together to create the largest U.S. multistate operator by revenue. Next to that, we also have Green Thumb (OTCMKTS: GTBIF) which reported a 60.5% year-over-year increase in revenue for the full year of 2021. This growth is driven by the increased scale in the company’s Consumer Packaged Goods and retail businesses. And on that note, watch out for these top marijuana stocks in the stock market today.
Top Marijuana Stocks To Watch Today
Canopy Growth Corporation (NASDAQ: CGC)
Aurora Cannabis Inc. (NASDAQ: ACB)
Tilray Brands Inc. (NASDAQ: TLRY)
GrowGeneration Corporation (NASDAQ: GRWG)
High Tide Inc. (NASDAQ: HITI)
Canopy Growth
For starters, we will be looking at the Canopy Growth Corporation, or CGC for short. In brief, CGC is a Canada-based cannabis cultivator and provider of cannabinoid-based consumer products. In detail, the company offers weed enthusiasts a wide array of offerings worldwide. This ranges from high-quality dried flowers, cannabis oils, infused beverages, edibles, and vaporizers among other things. CGC brands include Tweed, DOJA, Martha Stewart CBD, and First & Free among many others.
On Tuesday, the company announced positive results from its clinical trial that studied the effects of cannabidiol (CBD) on menstrual-related symptoms. Evidently, the findings showed that CBD improves a variety of physical and psychological symptoms associated with menstruation. Apart from this, CGC’s Martha Stewart CBD last week announced new flavors of its CBD wellness gummies. Namely, these flavors are Alphonso Mango, Coconut, and Pineapple. The new flavors are made with CGC’s high-quality, U.S.-grown CBD isolate, the purest and most potent form of CBD. As such, consumers can expect a consistent and great-tasting experience. With these developments, should you invest in CGC stock?
Source: TD Ameritrade TOS
Aurora Cannabis
Aurora Cannabis is a licensed producer of medical and consumer cannabis. It has sales and operations in more than 25 countries worldwide. The company is a leading integrated cannabis company with a robust network of subsidiaries and strategic partnerships. Boasting state-of-the-art production facilities, the company continues to be one of the fastest-growing cannabis companies in the world. Over the past week, ACB stock has risen by over 17%.
Earlier this week, the company announced that it will be acquiring TerraFarma, the parent company of vertically integrated cannabis company Thrive Cannabis. Thrive is mostly known for its award-winning flagship recreational brand, Greybeard Cannabis. In addition to Greybeard, Aurora will also be adding Being to its portfolio. Being is a wellness-oriented brand known for its sublingual THC and CBD strips. With this acquisition in place, do you have ACB stock on your watchlist?
Source: TD Ameritrade TOS
[Read More] Stock Market Today: Dow Jones, S&P 500 Opens Higher; Cannabis Stocks On The Rise
Tilray
Following that, we have Tilray, a leading name in the global cannabis market. The company is in the cannabis lifestyle and consumer packaged goods business. For a sense of scale, it currently operates across Canada, the U.S., Europe, Australia, and Latin America. Through its extensive work in the fields of weed research, cultivation, and distribution, Tilray supports its extensive portfolio of brands. Given the scale and reach of Tilray’s operations, I could see why investors may be looking to invest in TLRY stock.
On March 17, Tilray announced that its medical cannabis division, Tilray Medical, has expanded its medical cannabis offerings in Malta. Specifically, the company has launched the first EU GMP-certified medical cannabis oil products in the country. This builds upon the company’s penetration into the Maltese market last month with the first sale of medical cannabis. As it stands, Tilray’s EU GMP medical cannabis products are now readily available in pharmacies across Malta. As Tilray continues to expand its business, will you be watching TLRY stock?
Source: TD Ameritrade TOS
GrowGeneration
GrowGeneration is the largest specialty retailer of hydroponic and organic gardening equipment in the U.S. To date, the company boasts a network of 63 stores located throughout U.S. states where cannabis is legal. For the most part, it is a pick-and-shovel play company for the cannabis industry that sells thousands of products. Namely, this would include organic nutrients and soils, advanced lighting technology, and state-of-the-art hydroponics equipment that is used by both commercial and home growers.
Earlier this month, the company reported its fourth-quarter and full-year financials. For starters, revenues for the quarter came in at $90.6 million for the quarter, up by 46% from the same period last year. Financials aside, the GrowGeneration also plans to open 15 to 20 new garden centers in 2022, further expanding its footprint in the marijuana industry. As such, do you believe that GRWG stock has more room to run?
Source: TD Ameritrade TOS
[Read More] Top Stock Market News For Today March 24, 2022
High Tide
With over a decade of experience in the industry, High Tide is a retail-focused cannabis company that operates across Canada, Europe, and the U.S. Furthermore, the company’s portfolio includes a Canadian cannabis retail chain, a global manufacturer, and a distributor of cutting-edge consumption accessories. Also, it has some of the most popular accessories e-commerce platforms in the world. Notably, it says that its online platforms saw almost 100 million site visits in 2020 alone.
On Thursday, High Tide reported financial results for its first fiscal quarter of 2022. In brief, revenue came in at $72.2 million this quarter, nearly doubling from $38.3 million in the same quarter last year. Additionally, gross profit increased to $23 million this quarter, up by 56% year-over-year. Along with that, the company opened 6 new Canna Cabana locations across Canada. Considering the strong quarter, would you add HITI stock to your portfolio?
Source: TD Ameritrade TOS
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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. | Top Marijuana Stocks To Watch Today Canopy Growth Corporation (NASDAQ: CGC) Aurora Cannabis Inc. (NASDAQ: ACB) Tilray Brands Inc. (NASDAQ: TLRY) GrowGeneration Corporation (NASDAQ: GRWG) High Tide Inc. (NASDAQ: HITI) Canopy Growth For starters, we will be looking at the Canopy Growth Corporation, or CGC for short. Over the past week, ACB stock has risen by over 17%. With this acquisition in place, do you have ACB stock on your watchlist? | Top Marijuana Stocks To Watch Today Canopy Growth Corporation (NASDAQ: CGC) Aurora Cannabis Inc. (NASDAQ: ACB) Tilray Brands Inc. (NASDAQ: TLRY) GrowGeneration Corporation (NASDAQ: GRWG) High Tide Inc. (NASDAQ: HITI) Canopy Growth For starters, we will be looking at the Canopy Growth Corporation, or CGC for short. Over the past week, ACB stock has risen by over 17%. With this acquisition in place, do you have ACB stock on your watchlist? | Top Marijuana Stocks To Watch Today Canopy Growth Corporation (NASDAQ: CGC) Aurora Cannabis Inc. (NASDAQ: ACB) Tilray Brands Inc. (NASDAQ: TLRY) GrowGeneration Corporation (NASDAQ: GRWG) High Tide Inc. (NASDAQ: HITI) Canopy Growth For starters, we will be looking at the Canopy Growth Corporation, or CGC for short. Over the past week, ACB stock has risen by over 17%. With this acquisition in place, do you have ACB stock on your watchlist? | Top Marijuana Stocks To Watch Today Canopy Growth Corporation (NASDAQ: CGC) Aurora Cannabis Inc. (NASDAQ: ACB) Tilray Brands Inc. (NASDAQ: TLRY) GrowGeneration Corporation (NASDAQ: GRWG) High Tide Inc. (NASDAQ: HITI) Canopy Growth For starters, we will be looking at the Canopy Growth Corporation, or CGC for short. Over the past week, ACB stock has risen by over 17%. With this acquisition in place, do you have ACB stock on your watchlist? |
36579.0 | 2022-03-25 00:00:00 UTC | Why Aurora Cannabis Stock Kept Going Up Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-stock-kept-going-up-today | nan | nan | What happened
Shares of Aurora Cannabis (NASDAQ: ACB) were glowing green again Friday, up 4.4% as of 12:20 p.m. EDT, on the day after the website Marijuana Moment reported that Congress will vote on the legalization of marijuana next week.
It's not surprising that investors in marijuana stocks would be optimistic about this development. But didn't all the gains come already, when the news first broke yesterday?
Image source: Getty Images.
So what
Not necessarily. Marijuana Moment isn't one of the most widely read websites among stock market investors, but Barron's magazine is. And this morning, Barron's picked up the Marijuana Moment report, confirming that the House of Representatives said it would consider a bill to decriminalize marijuana next week.
That sounds pretty optimistic, and it explains why some investors might still be buying Aurora Cannabis stock today. But Barron's also said it expects the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) to clear the House once again, but still have no viable path to passage by the Senate, according to an analyst at the investment firm BTIG.
And that could actually be bad news for Aurora Cannabis stock.
Now what
Throw in the fact that President Joe Biden has said numerous times that he's not a fan of legalizing cannabis, and we're still potentially quite far away from actually seeing marijuana legalized at the federal level. It's for this reason that BTIG and Barron's doubt that the Senate will even try very hard to pass the MORE Act. In which case, investors might need to wait another year or more to see cannabis legalized at the federal level.
Aurora Cannabis stock is up today, but don't be surprised if it goes right back down next week.
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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 Shares of Aurora Cannabis (NASDAQ: ACB) were glowing green again Friday, up 4.4% as of 12:20 p.m. EDT, on the day after the website Marijuana Moment reported that Congress will vote on the legalization of marijuana next week. Marijuana Moment isn't one of the most widely read websites among stock market investors, but Barron's magazine is. That sounds pretty optimistic, and it explains why some investors might still be buying Aurora Cannabis stock today. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) were glowing green again Friday, up 4.4% as of 12:20 p.m. EDT, on the day after the website Marijuana Moment reported that Congress will vote on the legalization of marijuana next week. Marijuana Moment isn't one of the most widely read websites among stock market investors, but Barron's magazine is. That sounds pretty optimistic, and it explains why some investors might still be buying Aurora Cannabis stock today. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) were glowing green again Friday, up 4.4% as of 12:20 p.m. EDT, on the day after the website Marijuana Moment reported that Congress will vote on the legalization of marijuana next week. * 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 March 3, 2022 Rich Smith has no position in any of the stocks mentioned. | What happened Shares of Aurora Cannabis (NASDAQ: ACB) were glowing green again Friday, up 4.4% as of 12:20 p.m. EDT, on the day after the website Marijuana Moment reported that Congress will vote on the legalization of marijuana next week. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. * 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! |
36580.0 | 2022-03-25 00:00:00 UTC | Pre-Market Most Active for Mar 25, 2022 : TLRY, ZH, DIDI, SQQQ, TQQQ, NIO, ACB, CGC, PDD, BABA, GSK, TME | ACB | https://www.nasdaq.com/articles/pre-market-most-active-for-mar-25-2022-%3A-tlry-zh-didi-sqqq-tqqq-nio-acb-cgc-pdd-baba-gsk | nan | nan | The NASDAQ 100 Pre-Market Indicator is up 39.62 to 14,805.31. The total Pre-Market volume is currently 39,023,629 shares traded.
The following are the most active stocks for the pre-market session:
Tilray Brands, Inc. (TLRY) is +1.09 at $8.06, with 12,028,718 shares traded. TLRY's current last sale is 94.82% of the target price of $8.5.
Zhihu Inc. (ZH) is -0.14 at $2.69, with 5,614,377 shares traded. ZH's current last sale is 27.17% of the target price of $9.9.
DiDi Global Inc. (DIDI) is -0.27 at $3.53, with 3,213,311 shares traded. DIDI's current last sale is 22.63% of the target price of $15.6.
ProShares UltraPro Short QQQ (SQQQ) is -0.44 at $34.15, with 2,314,449 shares traded. This represents a 21.31% increase from its 52 Week Low.
ProShares UltraPro QQQ (TQQQ) is +0.77 at $57.79, with 1,928,157 shares traded. This represents a 46.08% increase from its 52 Week Low.
NIO Inc. (NIO) is -1.13 at $20.85, with 1,884,828 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range".
Aurora Cannabis Inc. (ACB) is +0.49 at $4.53, with 1,219,474 shares traded. ACB's current last sale is 86.04% of the target price of $5.265.
Canopy Growth Corporation (CGC) is +0.77 at $8.67, with 1,094,083 shares traded. As reported in the last short interest update the days to cover for CGC is 8.877878; this calculation is based on the average trading volume of the stock.
Pinduoduo Inc. (PDD) is -2.585 at $42.36, with 864,760 shares traded. PDD's current last sale is 47.06% of the target price of $90.
Alibaba Group Holding Limited (BABA) is -3.55 at $111.60, with 823,905 shares traded. As reported by Zacks, the current mean recommendation for BABA is in the "buy range".
GlaxoSmithKline PLC (GSK) is -0.05 at $43.25, with 588,301 shares traded. GSK's current last sale is 84.8% of the target price of $51.
Tencent Music Entertainment Group (TME) is -0.24 at $4.98, with 361,907 shares traded. TME's current last sale is 54.13% of the target price of $9.2.
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) is +0.49 at $4.53, with 1,219,474 shares traded. ACB's current last sale is 86.04% of the target price of $5.265. ProShares UltraPro Short QQQ (SQQQ) is -0.44 at $34.15, with 2,314,449 shares traded. | Aurora Cannabis Inc. (ACB) is +0.49 at $4.53, with 1,219,474 shares traded. ACB's current last sale is 86.04% of the target price of $5.265. The total Pre-Market volume is currently 39,023,629 shares traded. | Aurora Cannabis Inc. (ACB) is +0.49 at $4.53, with 1,219,474 shares traded. ACB's current last sale is 86.04% of the target price of $5.265. The total Pre-Market volume is currently 39,023,629 shares traded. | Aurora Cannabis Inc. (ACB) is +0.49 at $4.53, with 1,219,474 shares traded. ACB's current last sale is 86.04% of the target price of $5.265. TLRY's current last sale is 94.82% of the target price of $8.5. |
36581.0 | 2022-03-25 00:00:00 UTC | Pre-market Movers: CLVR, JWEL, HNST, CVM, AMPS… | ACB | https://www.nasdaq.com/articles/pre-market-movers%3A-clvr-jwel-hnst-cvm-amps... | nan | nan | (RTTNews) - The following are some of the stocks making big moves in Friday's pre-market trading (as of 07.25 A.M. ET).
In the Green
Clever Leaves Holdings Inc. (CLVR) is up over 37% at $2.18 CEL-SCI Corporation (CVM) is up over 19% at $4.80 Mercurity Fintech Holding Inc. (MFH) is up over 16% at $3.20 Tilray Brands, Inc. (TLRY) is up over 15% at $8.08 Aurora Cannabis Inc. (ACB) is up over 13% at $4.60 AMTD International Inc. (AMTD) is up over 12% at $2.83 IM Cannabis Corp. (IMCC) is up over 11% at $2.21 PolyMet Mining Corp. (PLM) is up over 6% at $3.57
In the Red
Jowell Global Ltd. (JWEL) is down over 20% at $2.05 The Honest Company, Inc. (HNST) is down over 19% at $4.85 Altus Power, Inc. (AMPS) is down over 16% at $6.50 NetSol Technologies, Inc. (NTWK) is down over 16% at $3.36 Orion Office REIT Inc. (ONL) is down over 13% at $15.50 Cyren Ltd. (CYRN) is down over 12% at $6.57 SmartRent, Inc. (SMRT) is down over 9% at $5.72 HireRight Holdings Corporation (HRT) is down over 7% at $15.22 Pear Therapeutics, Inc. (PEAR) is down over 7% at $4.10 DiDi Global Inc. (DIDI) is down over 7% at $3.52 GDS Holdings Limited (GDS) is down over 6% at $39.98 CuriosityStream Inc. (CURI) is down over 5% at $3.45 Imperial Petroleum Inc. (IMPP) is down over 5% at $1.69
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In the Green Clever Leaves Holdings Inc. (CLVR) is up over 37% at $2.18 CEL-SCI Corporation (CVM) is up over 19% at $4.80 Mercurity Fintech Holding Inc. (MFH) is up over 16% at $3.20 Tilray Brands, Inc. (TLRY) is up over 15% at $8.08 Aurora Cannabis Inc. (ACB) is up over 13% at $4.60 AMTD International Inc. (AMTD) is up over 12% at $2.83 IM Cannabis Corp. (IMCC) is up over 11% at $2.21 PolyMet Mining Corp. (PLM) is up over 6% at $3.57 In the Red Jowell Global Ltd. (JWEL) is down over 20% at $2.05 The Honest Company, Inc. (HNST) is down over 19% at $4.85 Altus Power, Inc. (AMPS) is down over 16% at $6.50 NetSol Technologies, Inc. (NTWK) is down over 16% at $3.36 Orion Office REIT Inc. (ONL) is down over 13% at $15.50 Cyren Ltd. (CYRN) is down over 12% at $6.57 SmartRent, Inc. (SMRT) is down over 9% at $5.72 HireRight Holdings Corporation (HRT) is down over 7% at $15.22 Pear Therapeutics, Inc. (PEAR) is down over 7% at $4.10 DiDi Global Inc. (DIDI) is down over 7% at $3.52 GDS Holdings Limited (GDS) is down over 6% at $39.98 CuriosityStream Inc. (CURI) is down over 5% at $3.45 Imperial Petroleum Inc. (IMPP) is down over 5% at $1.69 The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. (RTTNews) - The following are some of the stocks making big moves in Friday's pre-market trading (as of 07.25 A.M. ET). | In the Green Clever Leaves Holdings Inc. (CLVR) is up over 37% at $2.18 CEL-SCI Corporation (CVM) is up over 19% at $4.80 Mercurity Fintech Holding Inc. (MFH) is up over 16% at $3.20 Tilray Brands, Inc. (TLRY) is up over 15% at $8.08 Aurora Cannabis Inc. (ACB) is up over 13% at $4.60 AMTD International Inc. (AMTD) is up over 12% at $2.83 IM Cannabis Corp. (IMCC) is up over 11% at $2.21 PolyMet Mining Corp. (PLM) is up over 6% at $3.57 In the Red Jowell Global Ltd. (JWEL) is down over 20% at $2.05 The Honest Company, Inc. (HNST) is down over 19% at $4.85 Altus Power, Inc. (AMPS) is down over 16% at $6.50 NetSol Technologies, Inc. (NTWK) is down over 16% at $3.36 Orion Office REIT Inc. (ONL) is down over 13% at $15.50 Cyren Ltd. (CYRN) is down over 12% at $6.57 SmartRent, Inc. (SMRT) is down over 9% at $5.72 HireRight Holdings Corporation (HRT) is down over 7% at $15.22 Pear Therapeutics, Inc. (PEAR) is down over 7% at $4.10 DiDi Global Inc. (DIDI) is down over 7% at $3.52 GDS Holdings Limited (GDS) is down over 6% at $39.98 CuriosityStream Inc. (CURI) is down over 5% at $3.45 Imperial Petroleum Inc. (IMPP) is down over 5% at $1.69 The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. (RTTNews) - The following are some of the stocks making big moves in Friday's pre-market trading (as of 07.25 A.M. ET). | In the Green Clever Leaves Holdings Inc. (CLVR) is up over 37% at $2.18 CEL-SCI Corporation (CVM) is up over 19% at $4.80 Mercurity Fintech Holding Inc. (MFH) is up over 16% at $3.20 Tilray Brands, Inc. (TLRY) is up over 15% at $8.08 Aurora Cannabis Inc. (ACB) is up over 13% at $4.60 AMTD International Inc. (AMTD) is up over 12% at $2.83 IM Cannabis Corp. (IMCC) is up over 11% at $2.21 PolyMet Mining Corp. (PLM) is up over 6% at $3.57 In the Red Jowell Global Ltd. (JWEL) is down over 20% at $2.05 The Honest Company, Inc. (HNST) is down over 19% at $4.85 Altus Power, Inc. (AMPS) is down over 16% at $6.50 NetSol Technologies, Inc. (NTWK) is down over 16% at $3.36 Orion Office REIT Inc. (ONL) is down over 13% at $15.50 Cyren Ltd. (CYRN) is down over 12% at $6.57 SmartRent, Inc. (SMRT) is down over 9% at $5.72 HireRight Holdings Corporation (HRT) is down over 7% at $15.22 Pear Therapeutics, Inc. (PEAR) is down over 7% at $4.10 DiDi Global Inc. (DIDI) is down over 7% at $3.52 GDS Holdings Limited (GDS) is down over 6% at $39.98 CuriosityStream Inc. (CURI) is down over 5% at $3.45 Imperial Petroleum Inc. (IMPP) is down over 5% at $1.69 The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. (RTTNews) - The following are some of the stocks making big moves in Friday's pre-market trading (as of 07.25 A.M. ET). | In the Green Clever Leaves Holdings Inc. (CLVR) is up over 37% at $2.18 CEL-SCI Corporation (CVM) is up over 19% at $4.80 Mercurity Fintech Holding Inc. (MFH) is up over 16% at $3.20 Tilray Brands, Inc. (TLRY) is up over 15% at $8.08 Aurora Cannabis Inc. (ACB) is up over 13% at $4.60 AMTD International Inc. (AMTD) is up over 12% at $2.83 IM Cannabis Corp. (IMCC) is up over 11% at $2.21 PolyMet Mining Corp. (PLM) is up over 6% at $3.57 In the Red Jowell Global Ltd. (JWEL) is down over 20% at $2.05 The Honest Company, Inc. (HNST) is down over 19% at $4.85 Altus Power, Inc. (AMPS) is down over 16% at $6.50 NetSol Technologies, Inc. (NTWK) is down over 16% at $3.36 Orion Office REIT Inc. (ONL) is down over 13% at $15.50 Cyren Ltd. (CYRN) is down over 12% at $6.57 SmartRent, Inc. (SMRT) is down over 9% at $5.72 HireRight Holdings Corporation (HRT) is down over 7% at $15.22 Pear Therapeutics, Inc. (PEAR) is down over 7% at $4.10 DiDi Global Inc. (DIDI) is down over 7% at $3.52 GDS Holdings Limited (GDS) is down over 6% at $39.98 CuriosityStream Inc. (CURI) is down over 5% at $3.45 Imperial Petroleum Inc. (IMPP) is down over 5% at $1.69 The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. (RTTNews) - The following are some of the stocks making big moves in Friday's pre-market trading (as of 07.25 A.M. ET). |
36582.0 | 2022-03-24 00:00:00 UTC | Markets Jumped Thursday, and These Hard-Hit Stocks Might Finally Have Their Day in the Sun | ACB | https://www.nasdaq.com/articles/markets-jumped-thursday-and-these-hard-hit-stocks-might-finally-have-their-day-in-the-sun | nan | nan | The stock market continued its volatile week on Thursday, but investors were pleased to see major market benchmarks regain their losses from Wednesday. Most of the factors affecting market sentiment aren't going to change quickly, and with earnings season still a couple of weeks away, many traders are using technical measures and other short-term strategies to guide their decisions. Gains for the S&P 500 (SNPINDEX: ^GSPC), Dow Jones Industrial Average (DJINDICES: ^DJI), and Nasdaq Composite (NASDAQINDEX: ^IXIC) were between 1% and 2%.
INDEX
DAILY PERCENTAGE CHANGE
DAILY POINT CHANGE
Dow
+1.02%
+349
S&P
+1.43%
+64
Nasdaq
+1.93%
+269
Data source: Yahoo! Finance.
The market sector that got the most attention from investors today was one that has been struggling for a very long time. Marijuana stocks have gotten hit hard over the past year, but news from Washington could point to a long-awaited milestone that would transform the nature of the business.
Yes, cannabis can
The big moment for marijuana stocks came mid-afternoon, when reports confirmed earlier rumors that the U.S. House of Representatives would put a bill on the floor for a vote next week.
The legislation would decriminalize cannabis at the federal level. Even though the Department of Justice has largely been willing to allow states to regulate medical and recreational cannabis within their borders without much in the way of federal enforcement, the status of marijuana on the list of federally controlled substances has had other impacts that have limited the growth of the industry. For instance, it's been difficult for cannabis cultivators and retailers to get access to traditional financial services like banking because of concerns that financial institutions would be breaking the terms of their charters if they worked with businesses that were technically violating federal law.
Image source: Getty Images.
In addition, the proposed bill would impose taxes that would go toward funding community support programs for areas that have suffered disproportionate impacts from drug enforcement measures. It would also expunge criminal convictions retroactively for those charged with federal crimes related to marijuana possession.
Big moves for pot stocks -- but will they stick?
The news definitely helped beaten-down marijuana stocks perk up. By the end of the regular session, Tilray (NASDAQ: TLRY) had jumped 22%, while Canopy Growth and Aurora Cannabis had both risen 11%. Smaller cannabis cultivators also saw big gains, helping to send the ETFMG Alternative Harvest ETF up 8% on the day.
The gains continued in after-hours trading. Alternative Harvest ETF picked up another 5%, while Tilray added another 16% gain, and Canopy rose another 11%. Aurora picked up 12% after hours as of 5:30 p.m. ET.
Despite the big rise in marijuana stocks, investors should remember that the industry has gone down this road once before. The House actually approved a bill similar to this one in the past, only to have it voted down in the Senate. There are also some questions about whether President Joe Biden would sign a bill into law even if it made it through both chambers of Congress.
Even with the gains, many marijuana stocks are still down 50% to 75% or more from where they traded just a year ago and even further below their all-time highs. That might have made them due for some relief on this news, but long-term investors still need to tread carefully in the space.
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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. | Most of the factors affecting market sentiment aren't going to change quickly, and with earnings season still a couple of weeks away, many traders are using technical measures and other short-term strategies to guide their decisions. Yes, cannabis can The big moment for marijuana stocks came mid-afternoon, when reports confirmed earlier rumors that the U.S. House of Representatives would put a bill on the floor for a vote next week. In addition, the proposed bill would impose taxes that would go toward funding community support programs for areas that have suffered disproportionate impacts from drug enforcement measures. | By the end of the regular session, Tilray (NASDAQ: TLRY) had jumped 22%, while Canopy Growth and Aurora Cannabis had both risen 11%. Smaller cannabis cultivators also saw big gains, helping to send the ETFMG Alternative Harvest ETF up 8% on the day. Alternative Harvest ETF picked up another 5%, while Tilray added another 16% gain, and Canopy rose another 11%. | Yes, cannabis can The big moment for marijuana stocks came mid-afternoon, when reports confirmed earlier rumors that the U.S. House of Representatives would put a bill on the floor for a vote next week. Despite the big rise in marijuana stocks, investors should remember that the industry has gone down this road once before. See the 10 stocks *Stock Advisor returns as of March 3, 2022 Dan Caplinger has no position in any of the stocks mentioned. | The stock market continued its volatile week on Thursday, but investors were pleased to see major market benchmarks regain their losses from Wednesday. The news definitely helped beaten-down marijuana stocks perk up. Despite the big rise in marijuana stocks, investors should remember that the industry has gone down this road once before. |
36583.0 | 2022-03-24 00:00:00 UTC | Why Marijuana Stocks Lit Up on Thursday | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-lit-up-on-thursday | nan | nan | What happened
Marijuana stocks exploded higher in late-day trading Thursday, with Aurora Cannabis (NASDAQ: ACB) closing the day up 11%, Canopy Growth (NASDAQ: CGC) gaining 11.4%, and Tilray (NASDAQ: TLRY) tacking on an astounding 21.8%.
It's no great secret why: Federal marijuana legalization is getting a vote in Congress.
Image source: Getty Images.
So what
As all-things-cannabis news source MarijuanaMoment.net reported Thursday afternoon, the U.S. House of Representatives has scheduled a vote on marijuana legalization for next week -- only the second time in history that such a bill has made it to the House floor for a vote.
Officially titled the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, the legislation "would remove cannabis from the list of federally controlled substances and promote social equity in the industry," notes MarijuanaMoment.net. The House Rules Committee will begin preparing the bill for floor action on Monday, including figuring out any amendments that might be voted upon.
That accomplished, the bill will move to the floor for a vote by the full House. The exact date for the vote has not yet been determined.
Assuming the bill passes (as it did the last time it came up for a vote, in December 2020, by a vote of 228 to 164), it will move to the Senate for consideration.
Now what
Success is not assured. Last time the MORE Act made it to the Senate, it died there. Also worth noting is that the Senate is working on its own marijuana legalization bill, the Cannabis Administration & Opportunity Act (CAOA), and if it passes that one, then the two legislative bodies would need to reconcile their two bills and create one final compromise bill to send to President Biden.
Even then, success would not be assured, as -- at last report -- the president was himself personally opposed to legalizing cannabis.
That being said, hope springs eternal for marijuana sector investors, and at the very least, the fact that a bill is moving forward in the House means that there's some forward momentum here. The more votes marijuana legalization wins in whichever house chooses to pass it, the better the odds that at some point in the not-too-distant future, the stars will align and a bill of this type will become law.
Once that happens, cannabis companies can finally get to work on transforming legal sales of marijuana into actual cash profits for their shareholders.
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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 stocks exploded higher in late-day trading Thursday, with Aurora Cannabis (NASDAQ: ACB) closing the day up 11%, Canopy Growth (NASDAQ: CGC) gaining 11.4%, and Tilray (NASDAQ: TLRY) tacking on an astounding 21.8%. Officially titled the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, the legislation "would remove cannabis from the list of federally controlled substances and promote social equity in the industry," notes MarijuanaMoment.net. The more votes marijuana legalization wins in whichever house chooses to pass it, the better the odds that at some point in the not-too-distant future, the stars will align and a bill of this type will become law. | What happened Marijuana stocks exploded higher in late-day trading Thursday, with Aurora Cannabis (NASDAQ: ACB) closing the day up 11%, Canopy Growth (NASDAQ: CGC) gaining 11.4%, and Tilray (NASDAQ: TLRY) tacking on an astounding 21.8%. Also worth noting is that the Senate is working on its own marijuana legalization bill, the Cannabis Administration & Opportunity Act (CAOA), and if it passes that one, then the two legislative bodies would need to reconcile their two bills and create one final compromise bill to send to President Biden. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | What happened Marijuana stocks exploded higher in late-day trading Thursday, with Aurora Cannabis (NASDAQ: ACB) closing the day up 11%, Canopy Growth (NASDAQ: CGC) gaining 11.4%, and Tilray (NASDAQ: TLRY) tacking on an astounding 21.8%. So what As all-things-cannabis news source MarijuanaMoment.net reported Thursday afternoon, the U.S. House of Representatives has scheduled a vote on marijuana legalization for next week -- only the second time in history that such a bill has made it to the House floor for a vote. Also worth noting is that the Senate is working on its own marijuana legalization bill, the Cannabis Administration & Opportunity Act (CAOA), and if it passes that one, then the two legislative bodies would need to reconcile their two bills and create one final compromise bill to send to President Biden. | What happened Marijuana stocks exploded higher in late-day trading Thursday, with Aurora Cannabis (NASDAQ: ACB) closing the day up 11%, Canopy Growth (NASDAQ: CGC) gaining 11.4%, and Tilray (NASDAQ: TLRY) tacking on an astounding 21.8%. So what As all-things-cannabis news source MarijuanaMoment.net reported Thursday afternoon, the U.S. House of Representatives has scheduled a vote on marijuana legalization for next week -- only the second time in history that such a bill has made it to the House floor for a vote. That accomplished, the bill will move to the floor for a vote by the full House. |
36584.0 | 2022-03-24 00:00:00 UTC | CANADA STOCKS-Toronto index slips on weakness in tech, healthcare stocks | ACB | https://www.nasdaq.com/articles/canada-stocks-toronto-index-slips-on-weakness-in-tech-healthcare-stocks | nan | nan | By Amal S
March 24 (Reuters) - Canada's main stock index reversed from early gains to trade lower on Thursday as weakness in technology and healthcare stocks countered a rise in miners fueled by higher gold prices.
At 10:22 a.m. ET (14:22 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 52.66 points, or 0.24%, at 21,879.52.
The technology sector fell 1.5%, with e-commerce company Shopify Inc SHOP.TO down 3.0%.
Healthcare stocks .GSPTTHC shed 1.4%, with pot producers Aurora Cannabis Inc ACB.TO, Canopy Growth CorpWEED.TO, Cronos Group Inc CRON.TO losing between 1.8% and 2.8%.
The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, gained 0.4% as concerns around the Ukraine crisis lifted prices of safe-haven gold. GOL/
"Its just kind of a quit day where things are just kind of bouncing back and forth," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
The energy sector .SPTTEN dropped 0.8% as U.S. crude CLc1 prices were down 1.4% a barrel, while Brent crude LCOc1 lost 1.3%. O/R
Among individual shares, Brookfield BAMa.TO fell 0.2%. A unit of the company and fund manager Morrison & Co have entered an exclusivity deed with Uniti Group UWL.AX, after a Macquarie-led MQG.AX consortium offered A$5 per share ($3.73) for the Australian telecom firm.
HIGHLIGHTS
The TSX posted four new 52-week highs and no new lows.
Across all Canadian issues there were 22 new 52-week highs and 22 new lows, with total volume of 75.49 million shares.
(Reporting by Amal S in Bengaluru; Editing by Aditya Soni )
((Amal.S@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 3677;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Healthcare stocks .GSPTTHC shed 1.4%, with pot producers Aurora Cannabis Inc ACB.TO, Canopy Growth CorpWEED.TO, Cronos Group Inc CRON.TO losing between 1.8% and 2.8%. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, gained 0.4% as concerns around the Ukraine crisis lifted prices of safe-haven gold. A unit of the company and fund manager Morrison & Co have entered an exclusivity deed with Uniti Group UWL.AX, after a Macquarie-led MQG.AX consortium offered A$5 per share ($3.73) for the Australian telecom firm. | Healthcare stocks .GSPTTHC shed 1.4%, with pot producers Aurora Cannabis Inc ACB.TO, Canopy Growth CorpWEED.TO, Cronos Group Inc CRON.TO losing between 1.8% and 2.8%. By Amal S March 24 (Reuters) - Canada's main stock index reversed from early gains to trade lower on Thursday as weakness in technology and healthcare stocks countered a rise in miners fueled by higher gold prices. The technology sector fell 1.5%, with e-commerce company Shopify Inc SHOP.TO down 3.0%. | Healthcare stocks .GSPTTHC shed 1.4%, with pot producers Aurora Cannabis Inc ACB.TO, Canopy Growth CorpWEED.TO, Cronos Group Inc CRON.TO losing between 1.8% and 2.8%. By Amal S March 24 (Reuters) - Canada's main stock index reversed from early gains to trade lower on Thursday as weakness in technology and healthcare stocks countered a rise in miners fueled by higher gold prices. The materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, gained 0.4% as concerns around the Ukraine crisis lifted prices of safe-haven gold. | Healthcare stocks .GSPTTHC shed 1.4%, with pot producers Aurora Cannabis Inc ACB.TO, Canopy Growth CorpWEED.TO, Cronos Group Inc CRON.TO losing between 1.8% and 2.8%. By Amal S March 24 (Reuters) - Canada's main stock index reversed from early gains to trade lower on Thursday as weakness in technology and healthcare stocks countered a rise in miners fueled by higher gold prices. The technology sector fell 1.5%, with e-commerce company Shopify Inc SHOP.TO down 3.0%. |
36585.0 | 2022-03-23 00:00:00 UTC | Consumer Sector Update for 03/23/2022: DSEY,GAN,ACB,ACB.TO,CREX | ACB | https://www.nasdaq.com/articles/consumer-sector-update-for-03-23-2022%3A-dseyganacbacb.tocrex | nan | nan | Consumer stocks were ending lower on Wednesday, with the SPDR Consumer Staples Select Sector ETF (XLP) dropping 0.7% and the SPDR Consumer Discretionary Select Sector ETF (XLY) retreating 1.1%.
In company news, Diversey (DSEY) climbed 3.5% after the cleaning and disinfection services company Wednesday said it will temporarily increase its product prices between 8% to 15% next month to offset rising energy prices and other inflationary effects. The higher prices will stay in effect until energy prices return to more normal levels, the company said.
Creative Realities (CREX) rose 8.9% after the digital signage company overnight reported FY21 net income of $232,000, reversing a $16.8 million net loss during the prior year, while revenue increased 5.6% compared with the year-ago period, rising to $18.4 million. Analyst estimates were not available.
On the losing side, Aurora Cannabis (ACB) was 1% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. The sellers also are eligible for unspecified earnout payments based on Thrive meeting certain revenue targets over the next two years.
GAN (GAN) dropped 12% after reporting a Q4 net loss of $0.20 per share, improving on its $0.27 per share loss during the same quarter in 2020 and missing the Capital IQ consensus expecting an $0.11 per share loss. Revenue for the internet gambling and sports betting software firm for the three months ended Dec. 31 and its projection for FY22 revenue also both lagged Wall Street estimates.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | On the losing side, Aurora Cannabis (ACB) was 1% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. Creative Realities (CREX) rose 8.9% after the digital signage company overnight reported FY21 net income of $232,000, reversing a $16.8 million net loss during the prior year, while revenue increased 5.6% compared with the year-ago period, rising to $18.4 million. The sellers also are eligible for unspecified earnout payments based on Thrive meeting certain revenue targets over the next two years. | On the losing side, Aurora Cannabis (ACB) was 1% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. Consumer stocks were ending lower on Wednesday, with the SPDR Consumer Staples Select Sector ETF (XLP) dropping 0.7% and the SPDR Consumer Discretionary Select Sector ETF (XLY) retreating 1.1%. Creative Realities (CREX) rose 8.9% after the digital signage company overnight reported FY21 net income of $232,000, reversing a $16.8 million net loss during the prior year, while revenue increased 5.6% compared with the year-ago period, rising to $18.4 million. | On the losing side, Aurora Cannabis (ACB) was 1% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. Consumer stocks were ending lower on Wednesday, with the SPDR Consumer Staples Select Sector ETF (XLP) dropping 0.7% and the SPDR Consumer Discretionary Select Sector ETF (XLY) retreating 1.1%. In company news, Diversey (DSEY) climbed 3.5% after the cleaning and disinfection services company Wednesday said it will temporarily increase its product prices between 8% to 15% next month to offset rising energy prices and other inflationary effects. | On the losing side, Aurora Cannabis (ACB) was 1% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. Consumer stocks were ending lower on Wednesday, with the SPDR Consumer Staples Select Sector ETF (XLP) dropping 0.7% and the SPDR Consumer Discretionary Select Sector ETF (XLY) retreating 1.1%. In company news, Diversey (DSEY) climbed 3.5% after the cleaning and disinfection services company Wednesday said it will temporarily increase its product prices between 8% to 15% next month to offset rising energy prices and other inflationary effects. |
36586.0 | 2022-03-23 00:00:00 UTC | Consumer Sector Update for 03/23/2022: GAN, ACB, ACB.TO, CREX | ACB | https://www.nasdaq.com/articles/consumer-sector-update-for-03-23-2022%3A-gan-acb-acb.to-crex | nan | nan | Consumer stocks were moderately lower during Wednesday trading, with the SPDR Consumer Staples Select Sector ETF (XLP) dropping 0.7% and the SPDR Consumer Discretionary Select Sector ETF (XLY) retreating 0.6%.
In company news, GAN (GAN) dropped almost 13% after reporting a Q4 net loss of $0.20 per share, improving on its $0.27 per share loss during the same quarter in 2020 and missing the Capital IQ consensus expecting an $0.11 per share loss. Revenue for the internet gambling and sports betting software firm for the three months ended Dec. 31 and its projection for FY22 revenue also both lagged Wall Street estimates.
Aurora Cannabis (ACB) was 0.4% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. The sellers also are eligible for unspecified earnout payments based on Thrive meeting certain revenue targets over the next two years.
Creative Realities (CREX) rose over 14% after the digital signage company overnight reported FY21 net income of $232,000, reversing a $16.8 million net loss during the prior year, while revenue increased 5.6% compared with the year-ago period, rising to $18.4 million. Analyst estimates were not available.
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 (ACB) was 0.4% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. The sellers also are eligible for unspecified earnout payments based on Thrive meeting certain revenue targets over the next two years. Creative Realities (CREX) rose over 14% after the digital signage company overnight reported FY21 net income of $232,000, reversing a $16.8 million net loss during the prior year, while revenue increased 5.6% compared with the year-ago period, rising to $18.4 million. | Aurora Cannabis (ACB) was 0.4% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. Consumer stocks were moderately lower during Wednesday trading, with the SPDR Consumer Staples Select Sector ETF (XLP) dropping 0.7% and the SPDR Consumer Discretionary Select Sector ETF (XLY) retreating 0.6%. In company news, GAN (GAN) dropped almost 13% after reporting a Q4 net loss of $0.20 per share, improving on its $0.27 per share loss during the same quarter in 2020 and missing the Capital IQ consensus expecting an $0.11 per share loss. | Aurora Cannabis (ACB) was 0.4% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. In company news, GAN (GAN) dropped almost 13% after reporting a Q4 net loss of $0.20 per share, improving on its $0.27 per share loss during the same quarter in 2020 and missing the Capital IQ consensus expecting an $0.11 per share loss. Revenue for the internet gambling and sports betting software firm for the three months ended Dec. 31 and its projection for FY22 revenue also both lagged Wall Street estimates. | Aurora Cannabis (ACB) was 0.4% lower, reversing from a nearly 10% morning gain that followed the Canadian recreational marijuana company announcing plans to acquire Thrive Cannabis for $38 million in upfront cash and stock. Consumer stocks were moderately lower during Wednesday trading, with the SPDR Consumer Staples Select Sector ETF (XLP) dropping 0.7% and the SPDR Consumer Discretionary Select Sector ETF (XLY) retreating 0.6%. In company news, GAN (GAN) dropped almost 13% after reporting a Q4 net loss of $0.20 per share, improving on its $0.27 per share loss during the same quarter in 2020 and missing the Capital IQ consensus expecting an $0.11 per share loss. |
36587.0 | 2022-03-23 00:00:00 UTC | Consumer Sector Update for 03/23/2022: XLP, XLY, BZ, ACB, POSH | ACB | https://www.nasdaq.com/articles/consumer-sector-update-for-03-23-2022%3A-xlp-xly-bz-acb-posh | nan | nan | Consumer stocks were retreating pre-bell Wednesday. The Consumer Staples Select Sector SPDR Fund (XLP) was down 0.2% and the Consumer Discretionary Select Sector SPDR Fund (XLY) was 0.5% lower.
Kanzhun (BZ) shares were 7.9% higher after it reported Q4 adjusted earnings of 0.76 renminbi ($0.12) per American depository share, compared with a loss of 0.35 renminbi a year earlier. Analysts polled by Capital IQ expected EPS of 0.71 renminbi.
Aurora Cannabis (ACB) on Tuesday reached an agreement to acquire Thrive Cannabis' TerraFarma unit in a cash-and-stock deal that includes initial consideration of $38 million. Aurora Cannabis shares rose 4.1%.
Poshmark (POSH) shares were declining more than 9% after it reported a Q4 net loss late Tuesday of $0.19 per diluted share, compared with a loss of $0.25 a year earlier. Analysts polled by Capital IQ expected a loss of $0.18 per share.
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 (ACB) on Tuesday reached an agreement to acquire Thrive Cannabis' TerraFarma unit in a cash-and-stock deal that includes initial consideration of $38 million. The Consumer Staples Select Sector SPDR Fund (XLP) was down 0.2% and the Consumer Discretionary Select Sector SPDR Fund (XLY) was 0.5% lower. Analysts polled by Capital IQ expected EPS of 0.71 renminbi. | Aurora Cannabis (ACB) on Tuesday reached an agreement to acquire Thrive Cannabis' TerraFarma unit in a cash-and-stock deal that includes initial consideration of $38 million. The Consumer Staples Select Sector SPDR Fund (XLP) was down 0.2% and the Consumer Discretionary Select Sector SPDR Fund (XLY) was 0.5% lower. Analysts polled by Capital IQ expected EPS of 0.71 renminbi. | Aurora Cannabis (ACB) on Tuesday reached an agreement to acquire Thrive Cannabis' TerraFarma unit in a cash-and-stock deal that includes initial consideration of $38 million. The Consumer Staples Select Sector SPDR Fund (XLP) was down 0.2% and the Consumer Discretionary Select Sector SPDR Fund (XLY) was 0.5% lower. Kanzhun (BZ) shares were 7.9% higher after it reported Q4 adjusted earnings of 0.76 renminbi ($0.12) per American depository share, compared with a loss of 0.35 renminbi a year earlier. | Aurora Cannabis (ACB) on Tuesday reached an agreement to acquire Thrive Cannabis' TerraFarma unit in a cash-and-stock deal that includes initial consideration of $38 million. Consumer stocks were retreating pre-bell Wednesday. The Consumer Staples Select Sector SPDR Fund (XLP) was down 0.2% and the Consumer Discretionary Select Sector SPDR Fund (XLY) was 0.5% lower. |
36588.0 | 2022-03-21 00:00:00 UTC | 2 Marijuana Stocks to Buy Hand Over Fist and 1 to Avoid Like the Plague | ACB | https://www.nasdaq.com/articles/2-marijuana-stocks-to-buy-hand-over-fist-and-1-to-avoid-like-the-plague | nan | nan | Although high-growth tech stocks get most of the glory on Wall Street, it's often overlooked that the cannabis industry is growing just as quickly, if not faster, than some of the most-popular tech trends.
According to a recently released report from cannabis-focused analytics company BDSA, U.S. weed sales tallied $24 billion in 2021 and are expected to vault to $46 billion by 2026. That's a healthy compound annual growth rate (CAGR) of 14% over five years. Globally, pot sales are forecast to hit $61 billion by 2026, representing a slightly more robust 16% CAGR, and more than doubling the $29 billion in worldwide revenue reported last year.
With most marijuana stocks mired in a 13-month downtrend, these fast-growing stocks are now priced very attractively given the industry's outlook. Then again, we also know that not every company in a fast-growing trend will be a winner.
Image source: Getty Images.
Below are two marijuana stocks investors can confidently buy hand over fist, as well as one pot stock to avoid like the plague.
The first pot stock to buy hand over fist: Trulieve Cannabis
What better way to begin than by focusing on the most nominally profitable marijuana stock in North America, Trulieve Cannabis (OTC: TCNNF).
Perhaps the biggest issue for U.S. multi-state operators (MSO) over the past year has been the lack of progress on Capitol Hill with regard to cannabis reform(s). The expectation had been that a Democrat-led Congress would quickly reform federal cannabis laws and clear a path for MSOs to thrive. However, other matters, such as COVID-19, have been more pressing. As a result, federal cannabis reform legislation has gone nowhere.
However, this shouldn't worry Trulieve's shareholders, or those of other U.S. MSOs. Nearly three-quarters of all states have legalized weed in some capacity, which is providing more than enough organic opportunity for MSOs to shine.
What's really allowed Trulieve Cannabis to stand out from its peers is the company's approach to expansion. While most MSOs were opening a handful of dispensaries and cultivation facilities in as many legalized markets as possible, Trulieve was laser-focused on medical marijuana-legal Florida. More than 110 of the companies approximately 160 operating dispensaries are located in the Sunshine State.
The allure of saturating the Florida market with dispensaries is twofold. First, the Sunshine State projects as one of the highest-dollar markets for pot sales by 2024. Second, saturating the state means not having to spend as much on marketing to build brand awareness. The end result is that Trulieve has gobbled up about half of Florida's dried cannabis flower and oils market share, and thanks to its low marketing expenses has reported recurring quarterly profits for more than three years.
Trulieve Cannabis also sent ripples throughout the pot industry when it completed the largest U.S. cannabis transaction in history last year. The acquisition of MSO Harvest Health & Recreation provides Trulieve a presence in the mid-Atlantic region of the country and, more importantly, gives it the leading share of the Arizona market, which Harvest Health called home. Arizona's residents voted to legalize adult-use weed in November 2020, with sales commencing two months later.
Trulieve can currently be scooped up for 20 times Wall Street's consensus earnings for 2022 despite the company being expected to sustain an annual double-digit growth rate until at least mid-decade.
Image source: Getty Images.
The second pot stock to buy hand over fist: Planet 13 Holdings
The second marijuana stock to buy hand over fist is small-cap MSO Planet 13 Holdings (OTC: PLNH.F). Planet 13 is a company I'm so confident in that I added it to my personal portfolio early last week.
As I noted, most MSOs have approached expansion in the U.S. as a numbers game -- i.e., open as many dispensaries in as many high-dollar legalized states as possible. It's a fine strategy, but standing out can be difficult. Then there's Planet 13, which has easily become the most unique of all MSOs.
At the moment, Planet 13 has only two operating dispensaries; but they're unlike anything else in the country. The flagship Las Vegas SuperStore spans 112,000 square feet and houses an events center, café, and consumer-facing processing center. For some added context, the average Walmart is only 105,000 square feet in size. Meanwhile, the July 2021-opened Orange County SuperStore spans 55,000 square feet, 30% of which is devoted to selling space.
The key point is that Planet 13 is focused just as much on the experience of its customers as it is on making a sale. There's simply not another MSO in the country that can offer the selection and nostalgia that Planet 13 can bring to the table.
But that's not all. Having visited the Las Vegas SuperStore a few years back, I was impressed with its incorporation of technology (e.g., self-pay kiosks for repeat customers), the availability of personal budtenders to guide customers throughout the store, and the layout, which funneled consumers to higher-margin derivative products near the front of the store and by checkout counters.
Planet 13's next step is to move into new tourist-heavy markets. The company plans to open six smaller neighborhood-style stores in Florida, and somewhat recently received a license to open a store in Chicago, Ill. Assuming it can duplicate its success in Las Vegas in new markets, Planet 13 shouldn't have any trouble pushing to recurring profitability in 2022.
Image source: Getty Images.
The marijuana stock to avoid: Aurora Cannabis
On the other end of the spectrum is the one marijuana stock investors should avoid at all cost: Canadian licensed producer Aurora Cannabis (NASDAQ: ACB).
Back in 2018-2019, Aurora Cannabis was the talk of the town on the cannabis circuit. It eventually accrued 15 production facilities that, if fully developed, could have produced more than 600,000 kilos of cannabis on an annual basis. The company expected to become a domestic powerhouse and an exporting maven, with cost efficiencies that would drive its production costs way down.
But it's 2022, and none of the company's prognostications came to fruition.
Aurora has been somewhat hamstrung by regulators in its own country. Federal regulators were initially slow to approve cultivation and sales licenses. However, the bigger issue has been a combination of COVID-19 and slow retail license issuance in Ontario, the most-populous province. And without federal cannabis legalization in the U.S., Aurora has no chance of pushing into the far more lucrative U.S. market.
Another issue Canadian pot stocks have run into is that consumers have gravitated toward value brands. The push to sell premium dried flower and derivatives has fallen flat. As a result, the average sales price per gram for most Canadian licensed producers has been falling for years.
Then there are the self-inflicted wounds. Aurora Cannabis grossly overpaid for more than a dozen acquisitions and has written down billions of dollars in value in the wake of those deals. It's also shuttered five of its smaller facilities and halted construction at other facilities in an effort to lower its expenses and shrink its ongoing cash burn.
Furthermore, Aurora Cannabis has made a habit of drowning its shareholders with dilution. Because the company isn't profitable, it's used share issuances to fund deals and its ongoing operations. Between mid-2014 and Dec. 31, 2021, Aurora's outstanding share count ballooned from about 1.3 million (reverse split-adjusted) to 198.4 million. Shareholders have virtually no chance to make money when a company is diluting its investors this badly.
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 – 18 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 owns Planet 13 Holdings. The Motley Fool owns and recommends Planet 13 Holdings 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. | The marijuana stock to avoid: Aurora Cannabis On the other end of the spectrum is the one marijuana stock investors should avoid at all cost: Canadian licensed producer Aurora Cannabis (NASDAQ: ACB). Perhaps the biggest issue for U.S. multi-state operators (MSO) over the past year has been the lack of progress on Capitol Hill with regard to cannabis reform(s). Trulieve can currently be scooped up for 20 times Wall Street's consensus earnings for 2022 despite the company being expected to sustain an annual double-digit growth rate until at least mid-decade. | The marijuana stock to avoid: Aurora Cannabis On the other end of the spectrum is the one marijuana stock investors should avoid at all cost: Canadian licensed producer Aurora Cannabis (NASDAQ: ACB). The first pot stock to buy hand over fist: Trulieve Cannabis What better way to begin than by focusing on the most nominally profitable marijuana stock in North America, Trulieve Cannabis (OTC: TCNNF). The second pot stock to buy hand over fist: Planet 13 Holdings The second marijuana stock to buy hand over fist is small-cap MSO Planet 13 Holdings (OTC: PLNH.F). | The marijuana stock to avoid: Aurora Cannabis On the other end of the spectrum is the one marijuana stock investors should avoid at all cost: Canadian licensed producer Aurora Cannabis (NASDAQ: ACB). The first pot stock to buy hand over fist: Trulieve Cannabis What better way to begin than by focusing on the most nominally profitable marijuana stock in North America, Trulieve Cannabis (OTC: TCNNF). The second pot stock to buy hand over fist: Planet 13 Holdings The second marijuana stock to buy hand over fist is small-cap MSO Planet 13 Holdings (OTC: PLNH.F). | The marijuana stock to avoid: Aurora Cannabis On the other end of the spectrum is the one marijuana stock investors should avoid at all cost: Canadian licensed producer Aurora Cannabis (NASDAQ: ACB). While most MSOs were opening a handful of dispensaries and cultivation facilities in as many legalized markets as possible, Trulieve was laser-focused on medical marijuana-legal Florida. And without federal cannabis legalization in the U.S., Aurora has no chance of pushing into the far more lucrative U.S. market. |
36589.0 | 2022-03-17 00:00:00 UTC | Why Marijuana Stocks Are Smoking Today | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-are-smoking-today | nan | nan | What happened
On what otherwise appears to be a slow news day for the sector, shares of marijuana stocks Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) are all on the upswing today.
As of 1:15 p.m. ET, Sundial stock is gaining 3.3%, Aurora is up 5.2%, and Canopy Growth is leading the sector higher with a 5.3% gain.
Image source: Getty Images.
So what
What's got investors feeling so high on weed stocks today? In the absence of any other big news, it would appear that the removal of the threat of competition from alternative drugs is enough. We're talking about psilocybin, also known as "magic mushrooms."
As the movement to legalize marijuana in America gains steam, there's been an unintended side effect for fans of the drug (and the stocks of the companies that sell it). Specifically, there's a parallel movement to legalize all drugs, especially psychedelics like psilocybin.
The problem is, however, if psychedelics get legalized at the same time as marijuana becomes legal -- or even just lag marijuana in legality by a year or three -- investors who are banking on legal weed turning into a growth industry could find their buy theses derailed by competition from all sorts of other drugs. Such an event would logically slow the growth rate of cannabis sales, therefore making cannabis companies like Sundial, Aurora Cannabis, and Canopy Growth less valuable.
That's the bad news. Now here's the good: The psilocybin legalization movement is getting off to a very slow start -- and just hit a new bump in the road in California.
According to Tripsitter.com, to date, only one state (Oregon) and one almost-state (Washington, D.C.) have fully decriminalized use and possession of magic mushrooms. California -- the most populous state in the nation and one where "selected municipalities" have decriminalized the drug -- was supposed to become the second state to legalize psilocybin statewide.
But as MarijuanaMoment.net reports today, an effort to gather signatures to put legalization of psilocybin on the ballot in California has fallen far short of getting the required 623,212 signatures. (In fact, it seems to have racked up less than half the John Hancocks needed).
Now what
What does this mean for marijuana investors? Well, it doesn't quite pluck out the threat of competition from magic mushrooms. But as MarijuanaMoment explains, it does mean that legalization of psilocybin now can't happen this year, next year, or any year before the November 2024 elections, at the earliest.
That pushes possible implementation of legalization even farther down the road -- probably 2025 in the best-case scenario -- and means that marijuana investors needn't fear competition from magic mushrooms in the largest state market in the U.S. for another three years.
No wonder marijuana investors are happy 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. | What happened On what otherwise appears to be a slow news day for the sector, shares of marijuana stocks Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) are all on the upswing today. As the movement to legalize marijuana in America gains steam, there's been an unintended side effect for fans of the drug (and the stocks of the companies that sell it). Now here's the good: The psilocybin legalization movement is getting off to a very slow start -- and just hit a new bump in the road in California. | What happened On what otherwise appears to be a slow news day for the sector, shares of marijuana stocks Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) are all on the upswing today. Such an event would logically slow the growth rate of cannabis sales, therefore making cannabis companies like Sundial, Aurora Cannabis, and Canopy Growth less valuable. That pushes possible implementation of legalization even farther down the road -- probably 2025 in the best-case scenario -- and means that marijuana investors needn't fear competition from magic mushrooms in the largest state market in the U.S. for another three years. | What happened On what otherwise appears to be a slow news day for the sector, shares of marijuana stocks Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) are all on the upswing today. The problem is, however, if psychedelics get legalized at the same time as marijuana becomes legal -- or even just lag marijuana in legality by a year or three -- investors who are banking on legal weed turning into a growth industry could find their buy theses derailed by competition from all sorts of other drugs. That pushes possible implementation of legalization even farther down the road -- probably 2025 in the best-case scenario -- and means that marijuana investors needn't fear competition from magic mushrooms in the largest state market in the U.S. for another three years. | What happened On what otherwise appears to be a slow news day for the sector, shares of marijuana stocks Sundial Growers (NASDAQ: SNDL), Aurora Cannabis (NASDAQ: ACB), and Canopy Growth (NASDAQ: CGC) are all on the upswing today. The problem is, however, if psychedelics get legalized at the same time as marijuana becomes legal -- or even just lag marijuana in legality by a year or three -- investors who are banking on legal weed turning into a growth industry could find their buy theses derailed by competition from all sorts of other drugs. That pushes possible implementation of legalization even farther down the road -- probably 2025 in the best-case scenario -- and means that marijuana investors needn't fear competition from magic mushrooms in the largest state market in the U.S. for another three years. |
36590.0 | 2022-03-13 00:00:00 UTC | Is Tilray Making a Colossal Mistake? | ACB | https://www.nasdaq.com/articles/is-tilray-making-a-colossal-mistake | nan | nan | Cannabis producer Tilray Brands (NASDAQ: TLRY) looked like a promising investment when it announced in 2020 that it was merging with then-rival Aphria. It was dubbed the "largest global cannabis company" at the time and it looked like it had a real chance of dominating the Canadian pot sector.
But since then, I've become less optimistic about the business. The company's overly aggressive expansion follows in the footsteps of notable failures in the cannabis industry. It makes me wonder whether the stock is simply too risky to invest in today.
Image source: Getty Images.
Tilray's recent deals make its business riskier
The reason I'm losing hope in Tilray is that it has been making aggressive moves that might jeopardize its overall operations. While the deal with Aphria was smart since the company was a low-cost producer, recent announcements involving MedMen and Hexo are less encouraging.
Although it hasn't formally acquired those businesses, it has made deals to potentially take an equity stake in them down the road. In August 2021, Tilray announced it had acquired convertible notes of multi-state marijuana operator MedMen. Due to the federal ban on marijuana in the U.S., Tilray can't take an equity stake in the business and continue trading on the Nasdaq. Such a transaction likely won't take place until legalization happens (or the laws change significantly enough that the transaction won't leave Tilray in violation of U.S. federal law.)
MedMen would give Tilray a fast footprint in the U.S. market, but at a big cost. MedMen's operations are unprofitable, incurring losses of $81 million over the six-month period ending Dec. 25, 2021. During that time, it burned through about $50 million over the course of its day-to-day operating activities.
With Hexo, Tilray has also acquired debt in the form of convertible notes. There's nothing stopping it from making that conversion now, and if it does, it could end up taking a 37% stake in Hexo. Like MedMen, Hexo is also unprofitable and continually burning through cash. The situation has been so troubling with Hexo that even auditors sounded warning bells about the company's future recently, stating on its most recent earnings report that there was "substantial doubt as to the ability of the company to meet its obligations as they come due."
Neither of these deals is terribly exciting, and both threaten to worsen Tilray in the long run. And this could all be due to the pressure Tilray has put on itself to reach aggressive sales targets.
A $4 billion sales projection has become an albatross
Last year, Tilray forecasted that it could top $4 billion in annual sales by 2024. The projection is based on incredibly favorable assumptions, including dominance in the Canadian pot market, strong international growth, and penetrating the U.S. market. And it expects all that to happen within just a few years. At its current run rate of about $620 million in annual revenue, the business has a long way to go in reaching that goal.
That's one of the reasons I expected there to be more acquisitions on the horizon, as adding more companies into the mix is the easiest and quickest way to grow revenue. The problem is that it may not make the business more investable in the end.
Tilray likes to boast about its streak of reporting positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) -- currently, it sits at 11 straight quarters. However, I don't expect that to continue if it's taking on exposure to troubled businesses like MedMen and Hexo. It's a recipe for disaster.
And that's why although Tilray's stock has fallen over 70% in the past year (more than the Horizons Marijuana Life Sciences ETF's decline of 55%), more losses may be inevitable for its shareholders.
Is Tilray too risky to invest in?
Previously, I would have said Tilray was one of the safest Canadian marijuana companies to invest in. But now, I see it following patterns other companies like Aurora Cannabis and Canopy Growth have fallen into, by being too aggressive on acquisitions and expanding, all in the name of market share and expanding sales. And that's why I would avoid this stock, as its business may be in rough shape in the years ahead if it continues on this path.
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 – 18 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 recommends HEXO 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. | Cannabis producer Tilray Brands (NASDAQ: TLRY) looked like a promising investment when it announced in 2020 that it was merging with then-rival Aphria. Tilray likes to boast about its streak of reporting positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) -- currently, it sits at 11 straight quarters. And that's why although Tilray's stock has fallen over 70% in the past year (more than the Horizons Marijuana Life Sciences ETF's decline of 55%), more losses may be inevitable for its shareholders. | Tilray's recent deals make its business riskier The reason I'm losing hope in Tilray is that it has been making aggressive moves that might jeopardize its overall operations. In August 2021, Tilray announced it had acquired convertible notes of multi-state marijuana operator MedMen. Due to the federal ban on marijuana in the U.S., Tilray can't take an equity stake in the business and continue trading on the Nasdaq. | Tilray's recent deals make its business riskier The reason I'm losing hope in Tilray is that it has been making aggressive moves that might jeopardize its overall operations. Due to the federal ban on marijuana in the U.S., Tilray can't take an equity stake in the business and continue trading on the Nasdaq. Previously, I would have said Tilray was one of the safest Canadian marijuana companies to invest in. | The problem is that it may not make the business more investable in the end. However, I don't expect that to continue if it's taking on exposure to troubled businesses like MedMen and Hexo. But now, I see it following patterns other companies like Aurora Cannabis and Canopy Growth have fallen into, by being too aggressive on acquisitions and expanding, all in the name of market share and expanding sales. |
36591.0 | 2022-03-11 00:00:00 UTC | Is Cronos a Buy After Reporting 51% Sales Growth in Q4? | ACB | https://www.nasdaq.com/articles/is-cronos-a-buy-after-reporting-51-sales-growth-in-q4 | nan | nan | Cronos Group (NASDAQ: CRON) hasn't been a really serious contender in the marijuana market. On the revenue front, it doesn't compare to the bigger vertically integrated cannabis businesses, and operationally, it struggles to turn a profit and continually burns through cash.
But it has been expanding its business and introducing new products, and based on the company's most recent quarterly results, those moves may be starting to pay off.
Image source: Getty Images.
Sales are up, but not in the U.S.
One of the things I've always found bizarre about Cronos' financials is management's choice to lump Canada -- its home base -- into a "rest of the world" segment, but separate out the U.S. market, where it generates minimal revenue, into a segment of its own. While Cronos obviously hopes the U.S. will become a much bigger piece of its business down the road, in the meantime, this choice only serves to emphasize that its U.S. sales -- mainly of hemp-derived cannabidiol products -- aren't doing all that well.
Data source: Company filings. Chart by author.
In the fourth quarter, Cronos' consolidated net sales were up an impressive 51% from the prior-year period to $25.8 million. And it was the "rest of the world" segment that carried the business, with sales up 68%. In the U.S., revenue actually fell by 11%. Cronos credited the Q4 growth primarily to gains in the Canadian (recreational) and Israeli (medical) marijuana markets.
Cronos' margins remain abysmal, but there are reasons for optimism
Revenue growth on its own doesn't tell investors if a business is on the right track. Gross profit and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) can often offer hints as to whether the business is growing sales at a profitable rate or not. And for Cronos, that isn't the case.
Data source: Company filings. Chart by author.
Without a stronger gross profit, the company's hopes of reaching positive adjusted EBITDA remain faint. But there is one wildcard that could make that a reality: cultured cannabis.
In October, Cronos launched its first cultured cannabis product: the Chill Bliss gummy, under its Spinach Feelz brand. Lab-made products could help bring the company's costs of production down significantly and improve its prospects for profitability. Plus, they would also help it bring more unusual products to market, ones that feature rare cannabinoids. While investors are likely well aware of cannabidiol (CBD) and tetrahydrocannabinol (THC), they may not have heard of cannabigerol (CBG). Cronos claims that its new gummy was the first of its kind sold in Canada to contain both THC and cultured CBG.
It's far too early to tell just how successful these types of products will be. And although Cronos is generating more in revenue, the answer to the question of whether the business is more investable will come down to whether its margins are improving.
Should you buy Cronos today?
There's potential for Cronos stock to soar if its cultivated products prove to be the difference-makers that management expects them to be. But for now, this pot stock remains an ultra-risky buy. It's down by 66% over the past year, an even deeper decline than the 58% drop in value for the industry benchmark Horizons Marijuana Life Sciences ETF.
And to make matters worse, Cronos still isn't cheap compared to its peers as measured by price-to-sales ratio.
SNDL PS Ratio data by YCharts
Instead of trading at a discount, Cronos continues to trade high relative to most other marijuana businesses -- and there simply isn't a reason to pay a premium for it right now. Cronos still has a lot to prove, and until it shows much more improvement on its gross margins, this is a stock I'd stay far away from, as its share price is likely to continue falling in the weeks and months ahead.
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 – 18 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. | On the revenue front, it doesn't compare to the bigger vertically integrated cannabis businesses, and operationally, it struggles to turn a profit and continually burns through cash. While Cronos obviously hopes the U.S. will become a much bigger piece of its business down the road, in the meantime, this choice only serves to emphasize that its U.S. sales -- mainly of hemp-derived cannabidiol products -- aren't doing all that well. Cronos still has a lot to prove, and until it shows much more improvement on its gross margins, this is a stock I'd stay far away from, as its share price is likely to continue falling in the weeks and months ahead. | Data source: Company filings. Without a stronger gross profit, the company's hopes of reaching positive adjusted EBITDA remain faint. | While Cronos obviously hopes the U.S. will become a much bigger piece of its business down the road, in the meantime, this choice only serves to emphasize that its U.S. sales -- mainly of hemp-derived cannabidiol products -- aren't doing all that well. SNDL PS Ratio data by YCharts Instead of trading at a discount, Cronos continues to trade high relative to most other marijuana businesses -- and there simply isn't a reason to pay a premium for it right now. 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. | Cronos' margins remain abysmal, but there are reasons for optimism Revenue growth on its own doesn't tell investors if a business is on the right track. Lab-made products could help bring the company's costs of production down significantly and improve its prospects for profitability. The Motley Fool has no position in any of the stocks mentioned. |
36592.0 | 2022-03-03 00:00:00 UTC | Has Aurora Cannabis Become a Better Buy Than Canopy Growth? | ACB | https://www.nasdaq.com/articles/has-aurora-cannabis-become-a-better-buy-than-canopy-growth | nan | nan | Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) are two of the top cannabis companies in Canada. But both businesses have struggled in recent years in growing their operations and staying out of the red.
In their most recent quarterly results, the two companies appeared to be moving in different directions. Aurora has been making significant progress in strengthening its bottom line while Canopy Growth remains nowhere near breakeven.
Image source: Getty Images.
Aurora looks to be on track to post a profit -- soon
Last month, Aurora reported its quarterly results through the end of December. The prevailing trend for the business is that it is getting leaner and cutting more costs in an effort to post a profit. In its second-quarter numbers, the company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss was 9 million Canadian dollars. That's a modest improvement from the CA$11.5 million loss it reported a period earlier. The company reaffirmed that it would be profitable by the first half of fiscal 2023. That means by this time next year, Aurora should be in black.
One of the reasons Aurora is hopeful about improving its prospects for profitability is that it is focusing more on its medical marijuana business, which enjoys higher margins than the recreational side. Of the CA$60.6 million in revenue it recorded in Q2, CA$45.7 million, or 75% of that, was from medical marijuana. A year ago, it was 57%.
Canopy Growth looks to be much further away
In its third-quarter results (which ended on Dec. 31), Canopy Growth's adjusted EBITDA loss of CA$67.4 million was only a CA$1 million improvement from a year ago. While the company noted that it reduced selling, general, and administration expenses, declining sales numbers and worsening gross margins offset many of those improvements.
On its earnings call, the company said it plans to focus on achieving profitability in Canada while also continuing to work on developing an ecosystem in the U.S. market. However, the company stopped short of offering any firm date as to when breakeven might happen, only that it continues to work toward that. CEO David Klein says the business has "a clear strategy that will deliver a path to profitability for Canada by focusing on areas where we have a right to win with premium brands backed by operational excellence and scale through unparalleled distribution."
Despite what management may say is happening, the numbers don't lie. The company's gross margin was a pitiful 7% in Q3, and even on an adjusted basis, was only 13%. This past quarter, its gross margin of CA$10 million was less than half of the CA$24.6 million Canopy Growth reported a year ago. Until it can improve on that (significantly), it'll be hard to see a clear path toward profitability for the business.
Is Aurora really the better buy?
In terms of valuation, Aurora is a cheaper stock than Canopy Growth, on a price-to-sales basis:
CGC PS Ratio data by YCharts.
Its business shows signs of improvement, even though revenue has been far from impressive; over the past four quarters, it has been within a fairly narrow range between CA$55 million and CA$61 million.
Canopy Growth is nowhere near profitability, and its top line has also been lackluster. Last quarter, net revenue of CA$141 million was down 8% year over year. While the business is positioning itself for an eventual move into the U.S. recreational pot market, it could be years before it opens up as legalization does not appear to be imminent.
Aurora does look like the better business today, although Canopy Growth may be better in the long run. But ultimately, cannabis investors will likely be focused on growth opportunities. Unfortunately, neither stock offers much of that today, which is why both have plummeted more than 60% in the past year. However, the cannabis sector as a whole hasn't fared well, with the Horizons Marijuana Life Sciences ETF also down by a similar percentage as investors have grown tired of waiting for progress on the legalization front in the U.S.
Unless you're willing to be incredibly patient and are OK with seeing significant losses in your portfolio, you may be better off avoiding these companies for now. A better move may be to go with a much safer growth stock instead.
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 – 18 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) and Canopy Growth (NASDAQ: CGC) are two of the top cannabis companies in Canada. One of the reasons Aurora is hopeful about improving its prospects for profitability is that it is focusing more on its medical marijuana business, which enjoys higher margins than the recreational side. CEO David Klein says the business has "a clear strategy that will deliver a path to profitability for Canada by focusing on areas where we have a right to win with premium brands backed by operational excellence and scale through unparalleled distribution." | Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) are two of the top cannabis companies in Canada. Canopy Growth looks to be much further away In its third-quarter results (which ended on Dec. 31), Canopy Growth's adjusted EBITDA loss of CA$67.4 million was only a CA$1 million improvement from a year ago. This past quarter, its gross margin of CA$10 million was less than half of the CA$24.6 million Canopy Growth reported a year ago. | Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) are two of the top cannabis companies in Canada. Canopy Growth looks to be much further away In its third-quarter results (which ended on Dec. 31), Canopy Growth's adjusted EBITDA loss of CA$67.4 million was only a CA$1 million improvement from a year ago. This past quarter, its gross margin of CA$10 million was less than half of the CA$24.6 million Canopy Growth reported a year ago. | Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) are two of the top cannabis companies in Canada. Canopy Growth looks to be much further away In its third-quarter results (which ended on Dec. 31), Canopy Growth's adjusted EBITDA loss of CA$67.4 million was only a CA$1 million improvement from a year ago. This past quarter, its gross margin of CA$10 million was less than half of the CA$24.6 million Canopy Growth reported a year ago. |
36593.0 | 2022-02-26 00:00:00 UTC | Why Are Dark Clouds Still Looming Over This Pot Stock? | ACB | https://www.nasdaq.com/articles/why-are-dark-clouds-still-looming-over-this-pot-stock | nan | nan | It doesn't come as a surprise anymore when Canadian cannabis grower Aurora Cannabis (NASDAQ: ACB) reports disappointing quarterly results. The company has been on a roller-coaster ride for the last few years, failing to rebound. This year doesn't look any different. Though there are external headwinds such as regulatory hold-ups that delayed the opening of legal stores impacting legal sales in Canada -- much of the trouble was due to Aurora's slip-ups.
Driven by the rise in demand after legalization in Canada, Aurora went on an acquisition and expansion spree, burdening its balance sheet. Aurora's shares have dipped 80% in the last two years compared to the S&P 500's gain of 31%. Let's dive into its second-quarter fiscal 2022 results and determine if the company is planning to do anything different this year to get back on track.
ACB data by YCharts
Consistent declining revenue is not a good sign
Declining revenue has become a regular occurrence for Aurora Cannabis. In its recent second quarter (ended Dec. 31, 2021), Aurora's total net revenue declined 10% year over year to 60 million Canadian dollars.
The company had an early-mover advantage in the Canadian medical cannabis market, which helped it establish a good market presence. It could be the reason why Aurora saw a jump of 18% year over year in medical cannabis revenue. Despite the growth in medical cannabis, its consumer cannabis revenue plunged 48% to $14 million from the year-ago period. Aurora has failed to take advantage of the recreational market and has hardly launched many derivatives products that Canada legalized in 2019.
It appears management has realized the importance of these high-margin derivatives, which is why it stated in theearnings callits plan of "introducing a new range of products set to launch this spring" in the recreational segment.
Profitability seems far-fetched for Aurora in the near future
Adjusted EBITDA losses for the quarter came in at CA$9 million, versus CA$11.2 million in the year-ago period, thanks to a dip of CA$3.1 million in selling, general, and administrative expenses.
Aurora has missed achieving its positive target for earnings before interest, taxes, depreciation, and amortization multiple times by now, making investors skeptical. This has also taken a toll on its stock price. It has also been raising capital by issuing new stock since it received a delisting warning letter from the New York Stock Exchange (Aurora's shares fell below $1, which is against the trading compliance rules.) But this kind of heavy dilution doesn't sit well with investors, which is evident from its declining stock price.
In its Q2 fiscal 2022, Aurora's management promised again to hit EBITDA profitability by the first half of fiscal 2023. Management believes the company will hit the higher end of its targeted CA$60 million to CA$80 million annual savings by the same time.
It is these cost savings that have helped the company reduce its EBITDA losses from CA$80 million in Q2 fiscal 2020 to CA$9 million in Q2 fiscal 2022, which is a good sign. But with it consistently missing its targets, it's hard to believe it will be EBITDA positive by next year.
Image source: Getty Images.
Is there any hope for Aurora in 2022?
Aurora's long-term peer, Canopy Growth, is very keen to enter the U.S. cannabis market. And why not -- it is a burgeoning market and Canopy has managed to obtain some strong partners in the U.S. to help it expand its presence there.
But I believe Aurora's strategy to focus more on the Canadian market will help it in the longer run. The company is also excited about its growth in the European medical cannabis market, which it believes to be worth $5 billion by 2025.
Until Aurora is profitable, it will be difficult to enter the U.S. markets, especially when it lacks a strong partner. Moreover, the U.S. multi-state players are tough competition; most of them are also profitable. 2022 might be another challenging year for Aurora until the regulatory situation in the Canadian legal market improves and the company manages to grow revenue. It could be a few years before Aurora can be considered a worthwhile pot stock. I would advise investors to put their money in some better cannabis stocks.
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 – 18 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. | It doesn't come as a surprise anymore when Canadian cannabis grower Aurora Cannabis (NASDAQ: ACB) reports disappointing quarterly results. ACB data by YCharts Consistent declining revenue is not a good sign Declining revenue has become a regular occurrence for Aurora Cannabis. It appears management has realized the importance of these high-margin derivatives, which is why it stated in theearnings callits plan of "introducing a new range of products set to launch this spring" in the recreational segment. | It doesn't come as a surprise anymore when Canadian cannabis grower Aurora Cannabis (NASDAQ: ACB) reports disappointing quarterly results. ACB data by YCharts Consistent declining revenue is not a good sign Declining revenue has become a regular occurrence for Aurora Cannabis. In its recent second quarter (ended Dec. 31, 2021), Aurora's total net revenue declined 10% year over year to 60 million Canadian dollars. | It doesn't come as a surprise anymore when Canadian cannabis grower Aurora Cannabis (NASDAQ: ACB) reports disappointing quarterly results. ACB data by YCharts Consistent declining revenue is not a good sign Declining revenue has become a regular occurrence for Aurora Cannabis. In its recent second quarter (ended Dec. 31, 2021), Aurora's total net revenue declined 10% year over year to 60 million Canadian dollars. | It doesn't come as a surprise anymore when Canadian cannabis grower Aurora Cannabis (NASDAQ: ACB) reports disappointing quarterly results. ACB data by YCharts Consistent declining revenue is not a good sign Declining revenue has become a regular occurrence for Aurora Cannabis. This year doesn't look any different. |
36594.0 | 2022-02-23 00:00:00 UTC | Got $5,000? Please Don't Put It in These 2 Cannabis Growth Stocks | ACB | https://www.nasdaq.com/articles/got-%245000-please-dont-put-it-in-these-2-cannabis-growth-stocks | nan | nan | Investing $5,000 in companies that compete in a growing industry like cannabis can be great for your portfolio. Assuming the stocks you buy actually provide a positive rate of return on your five grand, that is. Today, I'm going to discuss two which almost certainly won't.
Neither of the cannabis pure-play competitors are profitable, and both are increasingly indebted amid lackluster growth. Though it's unlikely that bankruptcy is in the near future of either company, you definitely shouldn't take a risk by investing in either of these stocks. Here's why.
Image source: Getty Images.
1. Aurora Cannabis
Down more than 94% in the last three years, things aren't looking up for Aurora Cannabis (NASDAQ: ACB).
Despite undergoing a business transformation plan over the last two years that was intended to right-size its production capacity relative to the level of demand in the Canadian market, there has only been 60 million Canadian dollars in cost savings so far. And management expects to only realize an additional CA$20 million in savings by the first half of 2023 for a total of CA$80 million. That won't do much of anything against its trailing-12-month net loss of CA$604.11 million.
Nor will growth be able to save the day, as its quarterly revenue has shrunk by 1.86% in the last three years. To make up for the shortfall between income and expenses, Aurora has been issuing new stock, diluting the value of its shareholders. In the fiscal second quarter of 2022, ended Dec. 31, 2021, it minted shares worth $89.7 million, and management has made clear that further dilution is possible.
In sum, the long shot of a turnaround happening in the next few years isn't enough of a reason to buy this stock when there are better alternatives out there. But, if growth accelerates -- which it hasn't so far -- the picture may change. So, if you're a deep-value investor who's comfortable with scraping the bottom of the barrel, it might be worth keeping an eye on Aurora.
2. Tilray
Tilray (NASDAQ: TLRY) claims to be Canada's largest marijuana company, though it also has a significant presence in the German medicinal cannabis market. With trailing revenue of $589.31 million, it also has a claim to being one of the world's leaders in the cannabis space. Unfortunately, none of those things make it a good investment, which I happen to know firsthand as a former shareholder.
Still, Tilray is a significantly stronger business than Aurora. Its quarterly revenue has risen by nearly 44% in the last two years, and its quarterly earnings before interest, taxes, depreciation, and amortization (EBITDA) have expanded by 72.2%. But its total expenses have ballooned by more than double in the same period. As a result, its gross profit margin has fallen, which means that it'll take the company even longer to reach a positive net margin.
Furthermore, Tilray's recent diversification into craft beer hasn't exactly juiced the stock. Its beer-selling subsidiary, SweetWater Brewing, brought in less than $14 million in the most recent quarter, accounting for only 9% of the company's revenue. In contrast, distribution operations accounted for 44% of revenue, which is even more than the 38% derived from selling cannabis.
In other words, for a cannabis business, Tilray sure does a lot of things that don't involve selling marijuana products to consumers. And it isn't as though those non-cannabis activities are powering growth on the bottom line. Nor will the anticipated $20 million in cost synergies left to be realized from last year's merger with Aphria make much of a difference. After all, Tilray's trailing net losses are in excess of $275 million.
While Tilray probably has a better chance of making a recovery than Aphria, there's really no reason to invest in it unless you're especially daring. Once its margin starts to improve, however, there just might be an opportunity.
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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 Down more than 94% in the last three years, things aren't looking up for Aurora Cannabis (NASDAQ: ACB). Its beer-selling subsidiary, SweetWater Brewing, brought in less than $14 million in the most recent quarter, accounting for only 9% of the company's revenue. In other words, for a cannabis business, Tilray sure does a lot of things that don't involve selling marijuana products to consumers. | Aurora Cannabis Down more than 94% in the last three years, things aren't looking up for Aurora Cannabis (NASDAQ: ACB). After all, Tilray's trailing net losses are in excess of $275 million. See the 10 stocks *Stock Advisor returns as of January 20, 2022 Alex Carchidi has no position in any of the stocks mentioned. | Aurora Cannabis Down more than 94% in the last three years, things aren't looking up for Aurora Cannabis (NASDAQ: ACB). * 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 January 20, 2022 Alex Carchidi has no position in any of the stocks mentioned. | Aurora Cannabis Down more than 94% in the last three years, things aren't looking up for Aurora Cannabis (NASDAQ: ACB). Nor will growth be able to save the day, as its quarterly revenue has shrunk by 1.86% in the last three years. Its beer-selling subsidiary, SweetWater Brewing, brought in less than $14 million in the most recent quarter, accounting for only 9% of the company's revenue. |
36595.0 | 2022-02-18 00:00:00 UTC | Why Marijuana Stocks Got Stubbed Out Today | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-got-stubbed-out-today | nan | nan | What happened
Marijuana stocks headed lower in late trading on Friday, with all the major names closing down for the day:
Tilray (NASDAQ: TLRY) stock closed down 4.8%.
Canopy Growth (NASDAQ: CGC) fell 5.5%.
Aurora Cannabis (NASDAQ: ACB) was down 5.7%.
And Hexo (NASDAQ: HEXO) brought up the rear with a 6.1% decline.
So what
What's up with all the marijuana stocks going down? Turns out, this may be a "be careful what you wish for, because you just might get it" kind of a story.
For years, marijuana investors have waited in hopes of seeing the U.S. federal government follow in Canada's footsteps, and legalize drugs -- or rather, one drug in particular: marijuana. (The assumption being that such a move would open up the floodgates on marijuana demand in a market nearly 10x the size of Canada's.)
Instead, marijuana legalization remains stalled here in the U.S. Meanwhile, up north of the border there's a movement afoot to legalize, well, everything really. Meth, cocaine, heroin -- you name it. As MarijuanaMoment.net reports today, across the length and breadth of Canada, from Vancouver in the west to Toronto in the east, cities are applying to Health Canada for an "exemption allowing the jurisdictions to decriminalize the possession of" all sorts of drugs.
Not only that, but Canada's New Democratic Party (NDP) has just floated a bill to decriminalize drug possession not only in individual cities, but nationwide.
Image source: Getty Images.
Now what
"It's time to truly end the failed war on drugs," said the bill's sponsor, NDP member of parliament Gord Johns, to MarijuanaMoment. And granted, NDP is only the fourth-largest political party in Canada, and not everyone's convinced this bill (C-216) has much of a chance of passing -- at least not immediately.
If it does pass, however, then not only will American investors be kept waiting for marijuana to become legal down here -- but up in Canada, legal marijuana will face more competition from other newly legalized drugs, cannibalizing existing sales for marijuana!
Remote as the risk might seem today, it's still a risk, and the last thing marijuana investors needed to hear this week was more bad news.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends HEXO 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. | Aurora Cannabis (NASDAQ: ACB) was down 5.7%. Not only that, but Canada's New Democratic Party (NDP) has just floated a bill to decriminalize drug possession not only in individual cities, but nationwide. Now what "It's time to truly end the failed war on drugs," said the bill's sponsor, NDP member of parliament Gord Johns, to MarijuanaMoment. | Aurora Cannabis (NASDAQ: ACB) was down 5.7%. What happened Marijuana stocks headed lower in late trading on Friday, with all the major names closing down for the day: Tilray (NASDAQ: TLRY) stock closed down 4.8%. Not only that, but Canada's New Democratic Party (NDP) has just floated a bill to decriminalize drug possession not only in individual cities, but nationwide. | Aurora Cannabis (NASDAQ: ACB) was down 5.7%. What happened Marijuana stocks headed lower in late trading on Friday, with all the major names closing down for the day: Tilray (NASDAQ: TLRY) stock closed down 4.8%. For years, marijuana investors have waited in hopes of seeing the U.S. federal government follow in Canada's footsteps, and legalize drugs -- or rather, one drug in particular: marijuana. | Aurora Cannabis (NASDAQ: ACB) was down 5.7%. So what What's up with all the marijuana stocks going down? Not only that, but Canada's New Democratic Party (NDP) has just floated a bill to decriminalize drug possession not only in individual cities, but nationwide. |
36596.0 | 2022-02-16 00:00:00 UTC | Better Buy: Aurora Cannabis vs. Canopy Growth | ACB | https://www.nasdaq.com/articles/better-buy%3A-aurora-cannabis-vs.-canopy-growth | nan | nan | Two of investors' all-time favorite cannabis companies released quarterly results last week. Canada-based Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have made investors rich in the past. Both had an early mover advantage in the Canadian medical cannabis market. However, the last couple of years have been a roller-coaster ride. Besides some of their own mistakes, external headwinds like regulatory challenges in Canada delayed the opening of legal stores, which slowed down growth for these cannabis specialists.
Both companies have been attempting to rebound through various cost-cutting strategies, but they don't appear to be working so well. Aurora Cannabis and Canapy Growth repeatedly missed achieving earnings before interest, tax, depreciation, and amortization (EBITDA) targets last year. Let's take a look at their recent quarterly results and determine which of these pot stocks is a better buy in 2022.
ACB data by YCharts.
Aurora Cannabis' quarterly results failed to impress yet again
Despite all of its cost-cutting strategies, Aurora has failed to achieve its EBITDA targets numerous times since last year. Its recent second-quarter fiscal 2022 results weren't a sight for sore eyes, either. Total net revenue declined 10% year over year to 60 million Canadian dollars. While medical cannabis revenue saw an 18% increase from the year-ago period, consumer cannabis revenue plunged 48% to $14 million from the year-ago period. The slump was a result of Aurora's lack of development in recreational cannabis products. However, management said it was "introducing a new range of products set to launch this spring" in the recreational segment. It will be interesting if these new products can help revive Aurora's revenue.
Even though Aurora managed to reduce its adjusted EBITDA losses to CA$9 million from CA$11 million in Q2 fiscal 2021, it is another quarter of losses. Management believes the company will be able to hit the upper end of the cost savings range of CA$60 to CA$80 million by the first half of 2023, thus achieving EBITDA profitability by then as well. But it is hard for investors to put faith in a company that has been consistently failing to keep its promises.
Canopy Growth could do better to rebound
Canopy saw a decline in net revenue yet again in the third quarter ended Dec. 31, 2021. According to management, a slump in Canadian cannabis sales caused an 8% drop in net revenue to CA$141 million for the period.
Canopy saw a 19% increase in its consumer products revenue to CA$58 million, most of which stemmed from its acquired businesses like Storz & Bickel, This Works, Bio Steel, and other U.S. CBD businesses. It is sad to see that despite having an early mover advantage, the company saw its Canadian medical cannabis revenue fall 21% year over year to CA$61 million. Canopy also was the first to launch a variety of high-margin derivatives after Canada legalized them -- still, its recreational cannabis revenue fell 25% from the year-ago period.
As a result, Canopy recorded an adjusted EBITDA loss of CA$67 million. Despite the losses, the company ended the quarter with cash and short-term investments of CA$1.4 billion, thanks to backing from Constellation Brands.
Image source: Getty Images.
Which is the better choice?
Both Aurora Cannabis and Canopy Growth are eager to enter the U.S. market. It is understandable why these companies are eyeing the U.S. market, as it is a much bigger and better opportunity than Canada. Even without federal legalization, the domestic growers are close to generating $1 billion in revenue (for 2021) just from the limited state markets. However, I believe until both companies achieve profitability from the Canadian market, it will be challenging to expand in the U.S.
While Canopy made no forecast of when it will hit positive EBITDA, Aurora again assured investors of doing so by the first half of 2023.
Wall Street analysts have hopes for both Canopy and Aurora shares this year; they see upsides of 39% and 43% respectively, for the next 12 months. I believe Canopy is the better marijuana stock to buy now. While Aurora's future looks bleak, prospects look better for Canopy in the U.S. a few years down the line. It has a portfolio of innovative products and some strong partners to establish a footprint in the U.S. market. But that could take a while. Investors who have the patience and the stomach to bear the risk can buy and hold Canopy for the long haul.
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 – 18 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
The Motley Fool owns 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. | Canada-based Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have made investors rich in the past. ACB data by YCharts. Besides some of their own mistakes, external headwinds like regulatory challenges in Canada delayed the opening of legal stores, which slowed down growth for these cannabis specialists. | Canada-based Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have made investors rich in the past. ACB data by YCharts. While medical cannabis revenue saw an 18% increase from the year-ago period, consumer cannabis revenue plunged 48% to $14 million from the year-ago period. | Canada-based Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have made investors rich in the past. ACB data by YCharts. Aurora Cannabis' quarterly results failed to impress yet again Despite all of its cost-cutting strategies, Aurora has failed to achieve its EBITDA targets numerous times since last year. | Canada-based Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have made investors rich in the past. ACB data by YCharts. Aurora Cannabis' quarterly results failed to impress yet again Despite all of its cost-cutting strategies, Aurora has failed to achieve its EBITDA targets numerous times since last year. |
36597.0 | 2022-02-15 00:00:00 UTC | Why Marijuana Stocks Like Aurora Cannabis Rose So Much Today | ACB | https://www.nasdaq.com/articles/why-marijuana-stocks-like-aurora-cannabis-rose-so-much-today | nan | nan | What happened
Marijuana stocks aren't an asset class that's been known for price pops lately. Yet on Tuesday, many weed titles did well by investors, even those companies based in the beleaguered Canadian market.
Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and OrganiGram Holdings (NASDAQ: OGI) enjoyed 6%-plus gains on the day. Meanwhile, fellow Canadian companies Canopy Growth (NASDAQ: CGC) and Sundial Growers (NASDAQ: SNDL) posted rises of almost 4% and nearly 2%, respectively. Not to be outdone, U.S. cannabidiol (CBD) products specialist Charlotte's Web Holdings (OTC: CWBHF) notched a 5% lift.
Image source: Getty Images.
So what
Of those half-dozen names, only one -- Charlotte's Web -- had any proprietary news of significance to report. The company announced Tuesday that it intends to produce and sell CBD-infused beverages, and is doing so "with new CBD social elixirs currently under development with an expected launch date later in the calendar year."
Since CBD drinks are hardly new to the market, this wasn't sufficient on its own to move Charlotte's Web stock, let alone marijuana titles. Rather, it seemed developments in U.S. legalization were the catalyst.
On Tuesday, the Virginia Senate passed a bill bringing forward the start of recreational cannabis sales in the state. If eventually signed into law, the recreational market would open for business on Sept. 15; the original law legalizing such products set 2024 as the start. The bill next goes to the state's House of Delegates for a vote.
Now what
Since marijuana is not yet legal (or decriminalized) at the U.S. federal level, Canadian companies cannot directly sell their product anywhere in this country.
But the latest development in Virginia indicates that American legalization continues to be a trend, albeit one developing in fits and starts. At some point, cannabis will likely be legal throughout the U.S., which will benefit all pot producers and distributors, whether American or not.
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 – 18 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 owns and recommends OrganiGram Holdings. The Motley Fool recommends Charlotte's Web and Charlotte's Web 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. | Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and OrganiGram Holdings (NASDAQ: OGI) enjoyed 6%-plus gains on the day. The company announced Tuesday that it intends to produce and sell CBD-infused beverages, and is doing so "with new CBD social elixirs currently under development with an expected launch date later in the calendar year." Since CBD drinks are hardly new to the market, this wasn't sufficient on its own to move Charlotte's Web stock, let alone marijuana titles. | Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and OrganiGram Holdings (NASDAQ: OGI) enjoyed 6%-plus gains on the day. Not to be outdone, U.S. cannabidiol (CBD) products specialist Charlotte's Web Holdings (OTC: CWBHF) notched a 5% lift. The Motley Fool recommends Charlotte's Web and Charlotte's Web Holdings. | Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and OrganiGram Holdings (NASDAQ: OGI) enjoyed 6%-plus gains on the day. 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 – 18 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. | Aurora Cannabis (NASDAQ: ACB), Tilray (NASDAQ: TLRY), and OrganiGram Holdings (NASDAQ: OGI) enjoyed 6%-plus gains on the day. Since CBD drinks are hardly new to the market, this wasn't sufficient on its own to move Charlotte's Web stock, let alone marijuana titles. Cannabis legalization is sweeping over North America – 18 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. |
36598.0 | 2022-02-11 00:00:00 UTC | Why Aurora Cannabis Stock Is Popping Today | ACB | https://www.nasdaq.com/articles/why-aurora-cannabis-stock-is-popping-today | nan | nan | What happened
Shares of leading marijuana stock Aurora Cannabis (NASDAQ: ACB) jumped in afternoon trading Friday, after the company beat analyst targets for fiscal second-quarter 2022 revenue and predicted it will achieve "adjusted EBITDA profitability" in the first half of next year. Aurora's good news is even lifting the shares of its fellow travelers in cannabis, Tilray (NASDAQ: TLRY) and Canopy Growth (NASDAQ: CGC).
As of 12:05 p.m. ET, Aurora Cannabis shares are up 3.5% -- but Tilray is up a respectable 2.9%, too, and Canopy Growth is actually surging most of all, up 7%!
Image source: Getty Images.
So what
What did Aurora Cannabis say last night that has investors feeling so optimistic today? Actually, the news was quite mixed.
On the one hand, yes, sales exceeded estimates slightly. On the other hand, total revenue for fiscal Q2 2022 declined 10% year over year to just 60.6 million Canadian dollars ($47.78 million). Despite medical marijuana sales rising 18% year over year, Aurora suffered a steep decline in recreational cannabis sales -- which were down 48% year over year. Management blamed this decline on "industrywide pricing pressures across our portfolio" and an 18% decrease in the volume of product sold.
Similarly, the company managed to dramatically lower the rate at which it lost money in Q2 2022 -- with net losses falling 75% in comparison to Q2 2021, to just CA$75.1 million. But it still lost money.
Now what
Nevertheless, hope springs eternal for Aurora Cannabis and its compatriots. Downplaying the loss calculated according to generally accepted accounting principles (GAAP), the company noted that its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss in Q2 was only CA$9 million. Furthermore, the company plans to cut another CA$20 million in operating costs through the end of fiscal first half of 2023, and it says it thinks these additional cost cuts -- on top of the CA$60 million in costs it has already cut -- should be enough to lift it over the edge and into adjusted EBITDA profitability at that point.
To be clear, this week's report covered the end of fiscal H1 2022, which coincided with the end of calendar year 2021. So what Aurora Cannabis is predicting is that by the end of calendar year 2022 -- the end of this year, that is to say -- it will finally be profitable.
Will it happen? Perhaps. Aurora does seem to have made significant progress at cutting costs. That being said, the continued declines in the price of marijuana -- down 10% year over year, according to the company -- are going to make achieving profitability increasingly hard for all players involved, be they named Aurora Cannabis or Canopy Growth or Tilray. Investors also need to bear in mind that the goal Aurora set for itself is only adjusted EBITDA profitability -- not true GAAP profitability.
By that latter and more commonly accepted definition, most marijuana stocks look as far away from profitability as ever.
10 stocks we like better than Aurora Cannabis Inc.
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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 Shares of leading marijuana stock Aurora Cannabis (NASDAQ: ACB) jumped in afternoon trading Friday, after the company beat analyst targets for fiscal second-quarter 2022 revenue and predicted it will achieve "adjusted EBITDA profitability" in the first half of next year. Management blamed this decline on "industrywide pricing pressures across our portfolio" and an 18% decrease in the volume of product sold. Similarly, the company managed to dramatically lower the rate at which it lost money in Q2 2022 -- with net losses falling 75% in comparison to Q2 2021, to just CA$75.1 million. | What happened Shares of leading marijuana stock Aurora Cannabis (NASDAQ: ACB) jumped in afternoon trading Friday, after the company beat analyst targets for fiscal second-quarter 2022 revenue and predicted it will achieve "adjusted EBITDA profitability" in the first half of next year. Aurora's good news is even lifting the shares of its fellow travelers in cannabis, Tilray (NASDAQ: TLRY) and Canopy Growth (NASDAQ: CGC). Despite medical marijuana sales rising 18% year over year, Aurora suffered a steep decline in recreational cannabis sales -- which were down 48% year over year. | What happened Shares of leading marijuana stock Aurora Cannabis (NASDAQ: ACB) jumped in afternoon trading Friday, after the company beat analyst targets for fiscal second-quarter 2022 revenue and predicted it will achieve "adjusted EBITDA profitability" in the first half of next year. Despite medical marijuana sales rising 18% year over year, Aurora suffered a steep decline in recreational cannabis sales -- which were down 48% year over year. That being said, the continued declines in the price of marijuana -- down 10% year over year, according to the company -- are going to make achieving profitability increasingly hard for all players involved, be they named Aurora Cannabis or Canopy Growth or Tilray. | What happened Shares of leading marijuana stock Aurora Cannabis (NASDAQ: ACB) jumped in afternoon trading Friday, after the company beat analyst targets for fiscal second-quarter 2022 revenue and predicted it will achieve "adjusted EBITDA profitability" in the first half of next year. That being said, the continued declines in the price of marijuana -- down 10% year over year, according to the company -- are going to make achieving profitability increasingly hard for all players involved, be they named Aurora Cannabis or Canopy Growth or Tilray. 10 stocks we like better than Aurora Cannabis Inc. |
36599.0 | 2022-02-11 00:00:00 UTC | Aurora Cannabis Inc. (ACB) Q2 2021 Earnings Call Transcript | ACB | https://www.nasdaq.com/articles/aurora-cannabis-inc.-acb-q2-2021-earnings-call-transcript | nan | nan | Image source: The Motley Fool.
Aurora Cannabis Inc. (NASDAQ: ACB)
Q2 2021 Earnings Call
Feb 10, 2022, 5:00 p.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Greetings, and welcome to Aurora Cannabis second quarter 2022 results conference call. [Operator instructions] Please note that this conference is being recorded. I will now turn the conference over to our host, Ananth Krishnan, vice president of strategic finance. Thank you.
You may begin.
Ananth Krishnan -- Vice President, Corporate Development and Investor Relations
Thank you, Diego. And we appreciate you all joining us this afternoon. With me today are CEO, Miguel Martin; and CFO, Glenn Ibbott. After the market close, Aurora issued a news release announcing our financial results for the second quarter of our fiscal 2022.
The release and accompanying financial statements and MD&A are available on our IR website and via SEDAR and EDGAR. In addition, you can 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 and are subject to risks and uncertainties related to our future 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 be accessed via SEDAR and EDGAR. Following prepared remarks by all and Glenn, we will conduct a question-and-answer session. For retail investors, we have compiled questions submitted to us prior to the call.
For street analysts, we will ask you to limit yourselves to one question and then get back in the queue. With that, I will turn over the call to Miguel. Please go ahead, Miguel.
Miguel Martin -- Chief Executive Officer
Thank you, Ananth. We're very pleased with our transformation plan, and we're tracking adjusted EBITDA profitability in the first half of fiscal 2023, and that's less than a year away. Here's why, first, we remain the No.1 Canadian LP in global medical cannabis with strong sequential sales growth and margins exceeding 60%, roughly twice that of our competition. We continue to see growth in a number of countries, including the U.K., Israel, Australia and Poland, and our experience and process-driven approach gives Aurora leg up to profit and a significant opportunity.
Second, and this is great news, we continue to rationalize our expenses to the current environment and manage the company with far greater efficiency. Through Q2, we achieved annualized run rate savings of $60 million that is nearly double the $33 million we referenced back in November. And I'm pleased to report that we now believe that we will achieve the higher end of our targeted $60 million to $80 million savings annually by the first half of fiscal '23. Importantly, none of these cost savings will impact planned growth investments.
Third, our balance sheet remains one of the strongest in the industry, and we continue to be smart in allocating capital. Moreover, our capital structure supports both organic growth and provides us with the resources to evaluate strategic M&A. Fourth, we recently launched our science and innovation business, known as OCO, which we intend to use to deliver a continuous stream of innovation to the market. This business already has one of the largest catalogs of high-quality and high potency genetics and IP and biosynthesis available for licensing.
We have already commercialized several cultivars with other LPs, as well as long as three under our own San Raf brand. We currently have more than 30 high-quality cultivars, not available anywhere else in the market that are ready for a media trial and exclusive licensing. Bottom line, this is a capital-light long-term revenue growth opportunity we're really excited about. Let's now discuss our medical business, which is No.
1 by revenue internationally and in Canada. I'm proud of the team for continuing to find ways to profitably grow the medical cannabis market globally. What sets us apart from the competition in international medical is our regulatory expertise supported by our compliance protocols, testing and science that are recognized and highly regarded worldwide. These attributes put us in the pole position for success when these markets open recreationally.
During Q2, we demonstrated exceptional growth of 24% in international medical revenue compared to Q1, with success stories in the EU, Israel and Australia. In Poland, we delivered a total of 290 kilograms in the quarter, which included the largest shipment of any LP into the country. To date, according to the chief pharmaceutical inspectorate. We expect for this success to continue as we look to launch new cultivars there in Q3, accompanied by a marketing push.
In Australia, our revenues have doubled year over year. Through our exclusive supply agreement with MedRelief Australia, we offer medical patients in EU GMP certified range of products, including dry flower, oils, softgels and plan to shortly expand our offering to include vapes and gummies. 2021 was an excellent year for the Australian market, driven by more mainstream acceptance from patients and doctors and ongoing growth in authorized prescribers. We anticipate continued growth in 2022 as Australia's strength and import requirements, which Aurora qualifies for and continues to ease patient access regulations.
In the U.K., we continue to surpass expectations with our revenues increasing more than fivefold compared to Q2 last year, with the growth driven by a rapid increase in patient numbers. We've already built a leading position in the flower segment and continue to see growth in patient numbers with no erosion in pricing. While the U.K., Australia and Poland are still in the earliest stages of development, we would expect all of these countries to bear more significant profit drivers for us in the future. In Germany, we have the No.
1 and No. 2 best-selling products in dry flower for all of the last calendar year and a growing share of its oil market following the recent launch of our balanced extract. While we did experience some softness in Q2 due to some competitive pressures and slower-than-expected market size growth, Germany remains the largest market in the EU with 83 million citizens, and we are extremely bullish on our future there. given the new coalitions plans to legalize adult rec cannabis and improve medical patient accessibility.
While the time lines and regulatory framework are yet to be announced, our leadership position in medical puts us in a very strong position when that milestone occurs. In France, we are preparing our third shipment for the pilot program, where we are the exclusive supplier of dry flower, having secured all three of the available dry flower tenders in the French medical cannabis pilot program. In the Netherlands, we invest in growery, one of 10 license holders involved in selling only legally produced cannabis and approximately 80 out of 60 -- 600 coffee shops in the country. We expect to recognize revenue beginning in calendar 2023.
And over time, this is predicted to be a $2.8 billion market. We continued our success in Israel by shipping over $10 million of cannabis to our partners there in Q2. As of today, we do not expect to recognize revenue from Israel in Q3, but we remain committed to the Israeli market and our partners there as they grow their business in the coming quarters. In these developing markets, predictability of revenue can be affected by regulatory complexities, such as timing of government approvals and import permits.
However, our reach in the multiple jurisdictions hedges us against us. I want to be clear here, we believe the growth story of the next several years in Canvas will be that of international medical and recreational, and we expect a domino-like effect as acceptance grows. Where there is money to be made in a federally regulated structure, Aurora will be there, and we will win because of our agility and unique set of capabilities, which I mentioned earlier. Some estimates put the cannabis market in the EU alone at $5 billion by 2025, and we expect to grab a sizable piece of this.
This will ultimately help drive us to sustain profitability and generate shareholder values as markets develop. Turning now to the Canadian medical market, which we see as a competitive advantage for Aurora and is our most profitable business segment. Our overall revenue was flat in Q2 compared to Q1 and although our market share expanded to 23.4%, up from 19.8% in the same period last year. Most importantly, our insured patients made up 72.7% of our domestic medical sales up to 7.6% in Q1.
We are excited to see some opportunities for growth in attracting medium groups, employee insurance programs as well as opportunities to pick up market share with our best-in-class patient experience. We have also launched a number of products and innovations that we believe will appeal to patients. Regarding Canadian adult rec, our Q2 revenue decline reflects the ongoing macro challenges. There's a lot of excess inventory and increased pressure on older SKUs, which together has resulted in price compression.
This irrational market is unsustainable in our view, and we're not going to chase unprofitable market share at any cost. Our focus is on how to maximize profitability by leveraging our low-cost production facilities and selectively entering categories that have higher margins. We have the scale and resources to outlast the current environment. And once the market consolidates, we will be in a strong position.
In Q3, our innovation pipeline consists of 25 new SKUs, which benefit both Rack and medical channels. Highlights include three new cultivars from our breeding program launched under our refreshed Drift brand, our first offering of infused pre-rolls in hash and a bevy of new vape edible and concentrate flavors which we expect to hit the market in March. Our full-year 2022 innovation calendar includes over 80 new and high potency SKUs, which would be our most significant and successful innovation push since legalization. I would now like to turn the call over to Glenn, so he can provide his financial review.
Glenn Ibbott -- Chief Financial Officer
Thanks, Miguel. Good afternoon, everyone. We'll now review our fiscal Q2 2022 financials. These results clearly demonstrate the inherent strength of our business model and how well we are executing our transformation program, which is ahead of schedule.
So let's begin with a few key highlights. We have one of the strongest balance sheets among Canadian LPs, including approximately $445 million in cash as of yesterday, no term debt and access to a USD 1 billion shelf perspective. This prospectus includes a USD 300 million ATM, from which we have recently drawn down nearly USD 90 million, meant to position us to take advantage of strategic M&A opportunities in the future. Our cash flow continues to improve with $20.3 million used in operating working capital in Q2 compared to $67.3 million in the same period of last year.
And we continue to progress toward our EBITDA-positive milestone, reducing our loss this quarter by over 20% from last quarter to $9 million, as we begin to see the cost savings from our business transformation plan flowing through the P&L. In short, we have more than sufficient cash on hand to fund operations, and we are moving closer to profitability. Q2 net cannabis revenue was $60.6 million, a slight increase from last quarter. Net revenue would have been 4% higher, but was reduced for a $2.4 million provision, reflecting past and current international shipments that had batches that were outside of targeted potency range.
This provision is not expected to recur regularly. Our leadership in medical cannabis continued to deliver robust overall growth, along with consistently strong margins above 60%. This enviable margin profile has held steady over the past few quarters and is a key gross-profit driver for our business that both distinguishes us from our competitors and is critical for us in reaching positive EBITDA during the first half of fiscal 2023. SG&A and R&D also remained well-controlled, down 10% quarter over quarter as we continue rightsizing costs.
These expenditures are already a fraction of what they were in years past and will be reduced further as we proceed through the implementation of our business transformation plan. Clearly, our overall Q2 results benefited from Aurora's broad diversification across the international medical, Canadian medical and adult rack segments. So now let me address each of our core businesses in a bit more detail. Our leading medical businesses in Canada and Europe continued to perform exceptionally well, generating $45.7 million in sales and a gross margin of 62%.
Medical represented about 75% of our Q2 revenue and about 89% of our gross profit. Canadian medical revenue was $26 million in Q2, up slightly but really reflecting a consistent performance compared to Q1 even as the consumer retail market continues to roll out. As we have said previously, our Canadian medical patients can be segmented into two groups: those with cost reimbursement coverage and those without a reimbursement program. Our success in Canadian medical cannabis is really driven by our insured patient groups, whose reimbursement makes them consistent and high-volume buyers.
While we have seen some migration of price-sensitive non-reimbursement patients from the medical channel to be our direct channel, we have been able to attract more insured patients, resulting in a steady sequential revenue and an overall market share increase. Our international medical revenue was $19.8 million and reflected 67% growth versus the prior year and 24% sequentially. Q2 revenue included slightly over $10 million in sales to Israel, and what is believed to be the largest export of medical cannabis seem to the Israeli market. Excluding the onetime $2.4 million provision, international medical revenue was up 87% year over year.
Sales to Israel do not recur every quarter, but to give you a sense of the underlying international business, excluding the impact of Israel sales in Q1 and Q2, international revenue was up 41% sequentially. Recall that BDS Analytics estimated a market size of about $3.2 billion by 2025 for just the medical markets in Germany, Poland, U.K., France and Israel. So clearly, Aurora's leadership internationally is an important driver of long-term shareholder value creation. Our Q2 consumer revenue was $14.8 million, which reflected a 22% decline compared to last quarter.
Consumer cannabis represented about 24% of our Q2 revenue and about 11% of our gross profit. The revenue decline is primarily attributed to price adjustments in our core and premium products, intended to improve sales velocity by reflecting the continuing price compression in the market. The average selling price decrease was partially offset by a 5% positive shift in the company's brand mix from daily special to San Rafael '71 as Aurora continues to pivot toward premium offerings. In fact, San Raf pre-roll and flower revenue is up 18% over the last two quarters, driven mainly by the new cultivars launched in our Q1.
While we saw an increase in mix toward our premium brands, our consumer gross margins declined to 24% in Q2 from 32% last quarter. This was driven by downward pricing pressure of 6%, partially offset by 2% improvement from the shift toward premium. Also negatively impacting margins this quarter were opportunistic bulk sales, which depressed margins in the quarter by 4%. Turning now to SG&A, which includes R&D.
It remains well-controlled coming in at $44.6 million in Q2, which included approximately $3.7 million in restructuring and other onetime costs. So SG&A is $40.9 million excluding those costs. We have already made progress in driving down SG&A, but are certainly not done. In fact, we expect our quarterly run rate will be well below $40 million by the time we exit this fiscal year.
In Q2, we also recorded a $31.6 million inventory provision as a result of facility consolidation and clearing out of obsolete inventory balances. This provision included a noncash net realizable value adjustment of $11.5 million, driven by price compression in the market. So pulling all of this together, we generated an adjusted EBITDA loss in Q2 2022 of $9 million. The $2.5 million improvement in adjusted EBITDA loss is compared to last quarter was primarily driven by the $3.1 million decrease in SG&A, while revenue and gross -- adjusted gross margins remained relatively steady on a consolidated basis.
Let's review our path to adjusted EBITDA profitability. Approximately 60% of cash savings under the business transformation program, now estimated to be close to $80 million, will be reflected within our cost of goods as inventory has drawn down following the implementation of our lower production cost structure. We would expect to see those savings in our gross margins and logistics costs beginning late fiscal 2022 and into next year. The remaining 40% of cash savings will show up in SG&A as they're executed, and we see that now beginning in Q2.
Overall, we executed Q2 having executed plans. We exited Q2 having executed plans that result in annualized run rate cash cost savings of $60 million. So we're well on our way. This concludes my remarks, there are three key takeaways from this financial review.
First, our balance sheet remains strong, supported by a healthy cash balance and improved working capital and cash flow. Second, our medical business is in Canada and internationally. So clearly differentiating us from our competitors are a critical part of Aurora's target of sustainable profitability, having delivered 89% of gross profit this quarter. And finally, we're ahead of schedule with the transformation plan and now expect to be at the high end of our $60 million to $80 million total annual cost savings range.
This reinforces our already clear path to adjusting positive adjusted EBITDA in the first half of fiscal 2023 and through actions that are within our control. Now I'll turn the call back to Miguel.
Miguel Martin -- Chief Executive Officer
Thanks, Glen. Before Q&A, let me share some final takeaways. Aurora is laser-focused on EBITDA profitability and long-term growth, and we're making significant progress on both. First, we're getting to the high end of our cost reductions, which is great news.
And our medical cannabis revenue growth globally shows tremendous promise given our regulatory expertise and the trend of medical converting to rec. In Canada, the rec market will eventually correct, likely with fewer players, which will provide us without an opportunity, and our science innovation program adds another capital-light opportunity to our portfolio. Lastly, our balance sheet is in the best place it has ever been, which positions us for continued organic growth and strategic M&A, and the transformation plan is firmly on track. We appreciate your interest and time today before we take questions from the analysts that cover our stock.
I'll turn the call over to Ananth, so we can ask a few questions from our retail shareholders. We're invited to submit questions at of today's call. Ananth, please go ahead.
Ananth Krishnan -- Vice President, Corporate Development and Investor Relations
Thanks, Miguel. Our first question is regarding the stock price. What are your plans to improve the stock price and perhaps reassure shareholders?
Miguel Martin -- Chief Executive Officer
Well, obviously, it's a question we get a lot. I think, first and foremost, you got to go back a little bit in time and understand that there was incredible exuberance about the growth of the global cannabis business. That starts with the U.S. We've been saying for a year that the U.S.
is a ways off. We also believe and strongly, and I spent my entire career working in the U.S. with regulated agencies that it's going to be a medical focus, with the FDA regulating the product with decriminalization and then we'll see a pathway toward RAF. That's what we're seeing in other markets, and we'll see it there.
Canada and the challenges in Canada around the rec business, I know many people are incredibly focused on the rec business as opposed to the medical business, which I'll talk about in a second. But the right business in Canada is only three years old. You've got roughly half of that business is still in the legacy market, and you've got international marketplaces we've spoken about. There's 250 LPs today that's twice as many as they were.
A year ago, you got excess inventories and people having negative gross margins on key products. That's not sustainable, and that's going to turn around. We, quicker than almost anybody else, rightsize that rec business so that we could be in a situation to not have that overstepped incredible success that we've had in medical. So I think first and foremost, for investors is really focusing on the long term versus the short term.
And the long term for cannabis is incredibly right. If you look at key markets such as Germany and France and the U.K. and Israel and on and on, those are big markets where you're seeing medical cannabis grow in a significant place. Also, you're seeing the same companies win time after time after time.
Secondly, we've done the things we said we were going to do. We are focused on shareholder value. We're focused on being profitable, and this was another good quarter of making progress. The EBITDA progress was a 22% improvement over last quarter, and we are reaffirming the guidance to be EBITDA positive by the second half of our fiscal 2023.
And things that we've done are setting up for shareholder value in the future. We've talked about the balance sheet. We talked about the cash position, and we are properly allocating the capital to high-growth, high-margin opportunities. And lastly, when you think about long-term benefits, Aurora has significant assets that haven't been monetized yet.
IP, biosynthetics, genetics, all of which play a significant role in agriculture products all around the world. So I understand the question, and I understand the history, but I think if you look forward and take a longer view, you see that there are a lot of things traditionally that you look at most companies that Aurora has.
Ananth Krishnan -- Vice President, Corporate Development and Investor Relations
Great. Thank you. Our next and last question pertains to our path to profitability, Miguel. What gives us -- what gives you confidence that we're on track to meet our stated EBITDA time-wise?
Miguel Martin -- Chief Executive Officer
Well, I think, John, you're looking at a company and seeing can you believe what they're saying it's what have they done? And if you look at our history of announcing additional $60 million to $80 million in cost efficiencies, we're already at 60%, and we're really commenting today that we're going to be a high side of that. Secondly, is there progress being made so far. EBITDA does not positive EBITDA doesn't happen overnight. And we've made progress once again this quarter.
When you look at aspects of what would be a drag on that projection, we quickly moved out of those less than profitable areas such as key components of the adult rec business in Canada, markets that we may have participated in that didn't have upside and yet still found the cash and the investment to do innovative deals such as the growery and Netherlands, where even though legally, we can have a majority position, we can consolidate and recognize the revenue as early as 2023. So we're on track. We've demonstrated that what we say we're going to do, we do, do. And I think we're always keeping the shareholders in mind as we make key decisions.
Ananth Krishnan -- Vice President, Corporate Development and Investor Relations
That's great, Miguel. Thank you. Operator, that concludes the retail Q&A session. You can turn it over to you to open up to the phone lines.
Questions & Answers:
Operator
Thank you. [Operator instructions] Our first question comes from Vivien Azer with Cowen. Please state your question.
Vivien Azer -- Cowen and Company -- Analyst
Hi, good evening.
Miguel Martin -- Chief Executive Officer
Good evening Vivien.
Vivien Azer -- Cowen and Company -- Analyst
So, I wanted to focus on medical, no surprise there, very strong results. But in particular, your Canadian medical business, Miguel, the call outs during the prepared remarks, around the benefit of insurance coverage were really interesting to me, and I would love for you and Glen to expand on that. So one question, two parts. First, you just level set on the scope of insurance reimbursement as it stands today? And then part two, what the opportunity is to expand patient coverage from a reimbursement standpoint? Thank you.
Miguel Martin -- Chief Executive Officer
Got it. So first, I'm going to talk more of sort of a macro level, and I'll address your point on opportunity. I'll let Glen walk you through the reimbursement numbers, the percentages and sort of the key stats, and we can obviously follow up for all about key components and that. In medical business in Canada is a really good business.
And again, remind people, I know it's a bit older than the rack business, but it really is starting to develop a sophistication. It really is a DTC business. It's the direct-to-consumer, and we've done a lot of things that I think most people would expect out of the customary DTC business, but it's harder to do in a medical cannabis. And all of these things and really been focused on not only increasing the basket size, but also acquiring new patients.
And while our overall revenue was flat, as we mentioned, we grew market share. We have almost 23.5 market share today of the medical business, up from '19, next closest is half of that. And after that, it gets pretty dilutive. First and foremost, we've added significantly to the portfolio of products and premium products, and we have found that our patients are particularly interested in premium cannabis products.
I think most people would understand that with medication, but it's coming a little bit later into the overall cannabis business. Secondly, the service for not only the patients, but the clinicians and the physicians has consistently improved. And so when you look at that, there are a lot of reasons to think that we will continue to grow share in that critical category. The other two points I'll make on that is that the infrastructure to service the medical patient both acquire, retain and move through that process is incredibly expensive, requires an incredible amount of effort, which is why you see so few competitors doing well.
The other part is, it is completely portable a lot of that same infrastructure and knowledge and experience with patients in the Canadian market is directly applicable, and why we are dominating in other key markets such as U.K. and Germany and France. The other point is the regulators have a common set of understanding. So Health Canada has an outweighed impact on the regulations in Western Europe, as well as in Israel and other markets.
So again, muscle memory, expertise, portability, all play in to grow the overall medical business, not only in Canada but internationally. Now in terms of growing the pie, I would mention a couple of things. You're just starting to see clinical trials, peer-reviewed science and many of the customary metrics that you would see in medications and prescriptions that expand the pie for medical cannabis companies. Clearly, like with other medications and the prescriptions, products that have been on the market for a longer period of time, and have a longer, what we call advocacy ladder would be advantages demands in that type of situation, so we think there's upside to that.
We talked a little bit about our genetics and science business, which clearly is of interest not only to our own patients, but those of other LPs that get there so we can grow the pie that way. And then lastly, you're seeing a growth in insurers and union groups and the overall portfolio of companies that are considering cannabis for those patients. Right now, it's 1% of the adult population in Canada participates in that system, that's quite low. And Germany just for perspective is 0.1.
So there's upside to grow the pie well in Canada internationally. Glen, maybe you can touch on some of the key metrics to answer this question.
Glenn Ibbott -- Chief Financial Officer
Thanks Miguel. Yes, it's a great question. Like first of all, I'd say a minority of our patients do the majority of the ordering and deliver the majority of the gross profit, and they're the reimbursed patients. Now there's a significant portion of our patients.
I think we've got the highest number of veterans and first responders in the country in their critical group. Obviously, this is a really important medical treatment for them if you give the PTSD, whether it's you've been in a war zone, you've been on the front lines of healthcare or in front lines of policing. This is a really important treatment for you. Through some of the coverage programs that some of these folks qualify for, they are reimbursed.
And what we're working on is that it's direct reimbursement they are reimbursed for up to high single digits per gram on cannabis. And so they become a little less price-sensitive and much more city in getting the right medicine which is a really critical component of this. So I think they're a great group. It's an important treatment for them, but it's strictly financially they really drive repeat orders at a high average dollar per gram.
For the growth that Miguel was alluding to, we've told you in the past that we've invested in technology to support our medical business. This is a key part of it as employee or employer benefit programs and some of the insurance providers that run those programs offer up medical cannabis as an option than you do under host bending accounts. We've got the infrastructure now to connect directly into their system. So a patient can order medical cannabis and not have to go out of pocket on it and be directly covered through the insurance program through their work.
So if you add $500 a year through a health spending account or alternative treatments account, we've become positioned as, I'd say, a supplier of choice. So that's an opportunity for us to continue to work on the reimbursed or the insured patient group, which we think probably provides the best stickiest highest-value patients and also, quite frankly, near and dear to our hearts, and that we actually are making a difference in their lives. Thanks for the question.
Operator
Thank you And our next question comes from Michael Lavery with Piper Sandler. Please state your question.
Mike Lavery -- Piper Sandler -- Analyst
Thank you. Good evening.
Miguel Martin -- Chief Executive Officer
Good evening Michael.
Mike Lavery -- Piper Sandler -- Analyst
You've touched before on how medical and international medical is attractive in part because of the high margins and price points. Can you just help me reconcile -- you talked about international sales were up 24% sequentially in the quarter, but then your companywide average selling price was down 10% sequentially, was any of that pressure from international? Or what are some of the pricing dynamics there? How should we understand what that looks like?
Miguel Martin -- Chief Executive Officer
Yes. I mean, Michael, the pressure was not international. It was domestic. We -- I'll let Glen walk you through the numbers, but we had pressure from some opportunistic wholesale selling, which as opposed to destroying product.
We sold it at a very low point. We also had some pressure in the rec business, and some of that was offset by mix. But the international margins are really haven't moved it all and they're incredibly strong. And so that's not there.
I mean, the reason why -- and I'm always surprised there's not more interest in it. medical cannabis is the fastest-growing segment of cannabis internationally. And you're seeing huge markets really being put on the path of thoughtful legislative process to bring cannabis forward, and we don't need to list of all the countries. We're in 12 countries and some big ones.
And the margin set up because it's really medications and runs through a federal construct does not have the same market pressures and clearly is a much more of a challenge to get into the business. So I mentioned that a year ago, in Canada, there were 125 LPs. Today, there's 250. There's only a handful of cannabis companies that can meet the incredibly strict requirements internationally.
I mean Germany, as an example, you have to be within 10% of spec for both potency and turf levels. And people will say, "Well, gees, that's pretty broad spec," but it's not when you have like a balanced product, it only has a 10% THC number, a 1% variance on agricultural products on a core item is really hard. So international is where the growth is. International is really hard to do well.
same companies are renting time after time. The margins are great. They're not moving and you're seeing steady progression and a consistency in how the countries look at it. I mean, Glen, anything I missed on the margin?
Glenn Ibbott -- Chief Financial Officer
No, great talking about the margins or insight into the margins, Mike, specifically about average selling price, yes, there is a little bit of pressure in the consumer market. Our average price in our Canadian medical market came down as we sort of actively adjusted a couple of key products down to that reimbursement level I talked about, just to make sure that there is no impediments to these first responders and veterans ordering. So we actually picked up the velocity even though the ASP was down slightly. I don't know overall.
Internationally, listen, we had some very high ASP markets come on this quarter. But the Israeli sales are bulk sales. And so the way they show up in our average selling prices, they may actually look like they're decreasing the ASP, but the margins are extremely high because we're just shipping a big bail of cannabis, there's no post-harvest handling, there's no bottling that stuff. So margin is great, even though the average selling price per gram, if you will, is down.
And I think for -- it's a great question because I think in the future, we'll have to peel that out a little bit for you to give you the transparency on the impact of large international bulk sales in our ASP because quite frankly, if we pull that out, you'll see our ASP going up.
Mike Lavery -- Piper Sandler -- Analyst
Thank you.
Operator
Our next question comes from Pablo Zuanic with Cantor Fitzgerald. Please state you question.
Pablo Zuanic -- Cantor Fitzgerald -- Analyst
Thank you. Congratulations on the quarter. Look, it's just along the same lines in terms of international markets. Can you talk more about the stickiness that you're talking about, right? Because when I hear bulk shipments to Israel, I wonder that buyer there could switch to another supplier next quarter, right? I'm sure they cannot buy from Colombia yet due to regulatory issues, but -- so I want to understand the control that you have of the supply chain there, whether are they selling your brand? Do you have your own salespeople on the ground? Or you're pretty much your shipping from Canada and then they take control of the value chain because that means that it will not be so sticky.
And then the second point, when you talk about this unique ability to navigate complex regulatory environments and quoting from the press release, that sounds great. But it's -- in Germany, when only 0.1% of population are patients, I wonder how unique is that really? I mean, I suppose other companies as domestic patients grow in Germany could also have that skill set. If you can expand on those two points. Thank you, Miguel.
Miguel Martin -- Chief Executive Officer
Sure, I'd be happy to. Israel is unique, and I've spent a lot of time with that situation. So what you have today in Israel is you've got roughly 100 local growers, including growers that are on the , and they hold really an outsized political influence. And the situation in Israel right now of a country of nine million people and a tremendous hub of all things, cannabis right now is that locally, they've not been able to grow the quality of cannabis that they need in that market.
And it's a very high-margin market. I mean, a 10-gram increment is going for about 360 shekels. So Pablo, what you're referencing is the least sticky of all the markets. And why is that? Because right now, Canadian LPs and others that can meet the spec.
Now the spec is incredibly hard to meet. CUM CS, the IMCA, which is the regulatory agency in Israel, a very thoughtful agency, led by a wonderful man, name Yuval Anchat, has created what may be 1 of the strictest of not the strictest barriers to get into pesticide testing that no one else sees. But if you can meet that standard, you can get your product in and import permits goes through of hot and cold. And because cannabis is so hot right now, there's not a lot of brands, what I would call equity.
With the possible exception of a local grower such as maybe InterCure, I'll let you benefit something like that. But there's not that much stickiness for the Canadian LPs because the brands haven't developed themselves if you can meet the standard, you can get your product in and because there's such demand, you can get there. I think over time, Israel will get stickier. I also think over time, the local growers who really are wonderful and are getting better each and every quarter, we'll have a larger percentage, if not the majority of the sales in Israel, which is why we talk a lot about to be successful internationally, you have to diversify your business.
In the early days, you're going to see quarters like we had this quarter where we shipped the largest shipment ever in Israel. We held the other record, too. And we're saying that in the quarter we're currently in, we're not going to have a shipment. So it's going to go hot and cold.
Now stickiness outside of Israel is absolutely sticky. Getting into Germany is a year-plus challenge, and it requires a significant investment in filings, in packaging and product production and naming conventions, and those clinicians are pretty steady with what they picked. Australia is another one. If you have a new SKU in Australia, it takes six to eight months even to get it registered.
That's not the case in Israel. France is going to be a very sort of thoughtful process. So Israel is unique. The other markets are absolutely sticky.
People cannot get in. And I think if you look at the concentration of those companies that are successful, it's the same companies, France, U.K., Germany, on and on and on, and they all have the same common elements. History in medical, strong product portfolio, exceptional regulatory excellence and a commitment to a significant amount of investment that takes a couple of years to return. And that's not unlike other regulated markets and other categories.
So I think Israel is a bit of a one-off, but all the other markets are there. You also don't see the margin degradation as we talked about in these medical markets because there is really no incentive to do it.
Operator
Thank you. And our next question comes from Andrew Carter with Stifel. Please state your question.
Andrew Carter -- Stifel Financial Corp. -- Analyst
Hi, thanks. Good afternoon – good evening. I wanted to ask, so you said -- so I guess, instead, I want to ask about the Canadian consumer business. You've reiterated the positive EBITDA.
What does that consumer business have to do? Does it have to stabilize, or conversely, could you just go with a 100% medical focus? And would you be able to -- with some incremental savings and be profitable? Thanks.
Miguel Martin -- Chief Executive Officer
Great question. So right now, as we mentioned, the Canadian rec business is completely irrational. You're seeing core SKUs that are selling a significant negative gross margin you're seeing exceptional amount of over inventory and you're seeing a situation like with Quebec right now with the vaccine mandate where you're seeing 16% to 20% drop in sales. So it's a weird market.
I talked about the 250 LPs that are there. And so then the question becomes, why stay in it. And I believe, and we were one of the first companies who recognize that overall market share was not the arbiter of success in the Canadian rec business. It's the share of the profit pool, which is something I was always trained.
The issue in exiting the rec is that there are other ancillary benefits that we opt out. So I want to stay in the rec business, albeit at a proper size for a couple of reasons. First, it's going to get there. It might take nine or 12 months, but it's not sustainable.
And when that happens, it's going to be for a smaller group of companies, and we're going to be in a really strong position. Secondly, that experience in the largest federally regulated rec market is invaluable in other places, i.e., in the Netherlands where we're going to be going into a rec market there and at some point in the U.S. And there are a lot of learnings that you only get by staying there. It's only four years old.
We've talked about that. And also when you think about the market potential, there is going to be a slowing of that legacy market. Right now, the legal market represents 53% of sales and the legacy market is 47%, that continues to move. And I think with all of that, there are still some places where you can find some profitability, premium flower, concentrates, extracts and all those make sense.
The other point is we got efficiencies from being able to share products, share facilities, share regulatory, share genetics and some of that overall fixed overhead for our medical business by having at least some of the rec business. Now right now, we have roughly a 4 share of the rec business. It's about right. I think share of profit pool is more important.
So those are all the reasons why you just don't get out of it, but you don't chase unprofitable share, and you don't rent unprofitable share, and you use your resources to spend against growth areas which for us is Canadian medical and, more importantly, international medical.
Andrew Carter -- Stifel Financial Corp. -- Analyst
Thank you.
Miguel Martin -- Chief Executive Officer
Welcome.
Operator
Our next question comes from Frederico Gomes with ATB Capital Markets. Please state your question.
Frederico Gomes -- ATB Capital Markets -- Analyst
Good evening guys. Thanks for taking my question. I just had a question on your ATM. So you guys finished the quarter with over $200 million in cash.
You have one of the strongest balance sheets in the sector. So could you just provide some more color on the rationale for raising that much money after quarter end? Do you have any specific use in mind for those proceeds? Is it M&A, or was it more about building that war chest further? Thank you.
Miguel Martin -- Chief Executive Officer
Sure. Frederico, essentially great question. so just a couple of things. I want to tack a point on to your question.
Bert, I also want to highlight that we also bought back about $20 million, $20.5 million of convertible debt. That was, I think, important for us, and we're going to continue to be opportunistic when we can do that, we bought it below par and we'll continue to monitor the convertible market. Why is that important as you mentioned, the balance sheet. And as I talked historically, just to go back in time, when I first got in the seat, I thought it was critically important that the company had a proper cash position to really be there and sort of weather the storm of this whole situation.
And clearly, we did that. You mentioned the specifics of us raising it to over $440 million, and what we've said previously on the restate, so it's going to be a bit of an unsatisfying answer for you, Frederico, but I think it will get to it. We consider the ATM to be utilized for strategic purposes. We're always looking for deals that are accretive on EBITDA basis.
Everything that I'm focused on is the sustainability and the focus on this being a profitable and sustainably profitable company. And so that EBITDA is always important. And so the cash is also looking at significant strategic or operational upside. This is an important line, and I know people always want to hear it, but I think it's important for people to hear from me constantly.
We do not expect to use any of the cash from our ATM program to pay for the day-to-day operational expenses of the business. We're in a strong position today to consider strategic M&A. But I think our restraint, particularly as it pertains to the U.S. should give shareholders a good indication.
I mean the valuation of assets that people have purchased in the U.S. are a fraction of what they were a year ago. So we're cautious into that, and we're going to continue to be sensitive to purchase price valuation and always making sure that there's a strong strategic rationale and any potential target. But things are moving fast.
We want to be able to be opportunistic, and that's really why the cash position currently.
Operator
Thank you. Our next question comes from John Zamparo with CIBC. Please state your question.
John Zamparo -- CIBC -- Analyst
Thank you very much. I wanted to ask about the new science program and your ability to license genetics and IP to others. And specifically, have you started monetizing this to date? And if not, when do you take that might happen? And could you give us a sense of how material that might be for the business? Thanks.
Miguel Martin -- Chief Executive Officer
Sure. So John, it's a great question. We have started to monetize it, albeit in a small way, and we expect that to accelerate. So let me give you some specifics around that.
First, you saw the announcement about our biosynthetic assets and the partnership with Cronos. We're thrilled about that. We believe that we have the most efficient pathway as it pertains to biosynthetics, those IP assets pertain both in the plant and outside the plant. So there were -- there was compensation connected to that.
Secondly, we have had some small deals with some smaller craft companies. We announced North 40, which is an extremely well-known high-quality craft grower, which we sold genetics under the cultivar named Farm Gas. We utilized that both as a sale, as well as a marketing tool, and we're now selling farm gas into the San Rafael. We'll continue to announce the sale of genetics.
We believe we have the -- one of the largest, if not the largest genetics library and many, many people are looking for high-quality, high-potency genetics, and so we'll continue to do that in a variety of different ways, and I think you'll see that. We also have the ability through our facilities to grow for others and economic scale, and so we'll continue to do that. So the short answer is we've had a couple of deals. If you look at other folks and you look at the people that we brought on to staff up OCO, they come from other categories where it's clearly a relevant and material piece of their overall financial profile.
And clearly, the margins are -- will be significant given that we've already made all those investments. So that's where we are today, a lot more to evolve. We'll continue to announce deals, both large and small as they come out. But genetics will be a big piece.
The only thing the other piece I'll add to that, John, is there is a misconception, let me say, among growers and LPs, both domestically and internationally, that you cannot protect or own the genetics around, in particular, cultivar. That's completely untrue. And so we are licensing unique genetic markers of these cultivars that we develop, and we are able to identify those that are infringing upon that. And clearly, the law is very clear on this issue, and we'll have a very strong case.
You'll start to see litigation around that as well as those that we believe have infringed on some of our biosynthetic assets, and that's also an additional revenue stream for the company.
Operator
Thank you. Our next question comes from Tamy Chen with BMO Capital Markets. Please state your question.
Tamy Chen -- BMO Capital Markets -- Analyst
Hi, thanks. I was just wondering, at one question on the consumer business. Your volumes, I think the press release said was down 18% sequentially. And I'm just thinking back, I think the last two, maybe three quarters, your consumer business was holding in decently.
So I was just wondering if you could elaborate on what drove the 18% sequential decline in volume? Thank you.
Miguel Martin -- Chief Executive Officer
So Tamy, I think the simple answer is we're not going to chase. You're seeing an acceleration of irrational pricing, particularly on discount flower, and we've made the determination that we're going to get out of certain categories that don't make sense and lose money, and we're also not going to chase. So if you look at the ASP, and I know you follow all that, and you can see your body day or headset data, the average pricing, you've seen that dramatic decline across some key categories, particularly in the value segment. And so again, overall market share is not as much of a focus for us.
So we're going to really spend most of our time in looking at those categories that are problem where there's margin, but where we see certain categories where it's single digit or in certain provinces like Ontario where you see negative margins, you're not going to get there. And because that accelerated in the quarter, and we didn't chase that's why you'll continue to see that. Listen, if people want us to sell a lot of cannabis and lose more, I think we're the wrong company. I'm not saying that's what others are doing, but it is going to take a bit longer for these inventories to rightsize, and in that place, I think you see a lot of folks willing to sell stuff at a significant loss as opposed to just taking it out or giving it away.
Glenn Ibbott -- Chief Financial Officer
Tammy, I'll just add -- just second to that. I said in prepared remarks at San Raf, I mean in using it as an example of investing in the right places. San Raf is quite profitable for us. And we saw an 18% increase in pre-rolls and flower over the last two quarters because we launched some nice new cultivars into that.
And as Miguel stated in his remarks, we've got a lot of innovation coming, a number of new cultivars under a bunch of different brands and then profitable category. So we're focused there where the profit pools are. If that means market share going away, fine, but gross profit is what's going to drive us to profitability overall, and that's our focus. So I think we're trying to get away from that, what's the market share and what's happening on the revenue side and really focusing on driving in the areas -- winning in the areas that allow us to be profitable in the Canadian consumer market and add that to the existing really strong portfolio we've got in the medical market and create quite a company here.
Operator
Thank you. Our next question comes from Glenn Mattson with Ladenburg Thalmann. Please state your question.
Glenn Mattson -- Ladenburg Thalmann -- Analyst
Hi, thanks for taking the question. So just building on some of that stuff on consumers. So you talked about why you want to be there for a variety of reasons or for when you move into new markets or where the market turns around. But more maybe to the one of the second parts of Andrew's question was like, can you give us some sense of like how you see that market just kind of shaping up over the medium term? I know it's maybe irrational now, but you lay out kind of the idea for profitability in fiscal '23, first half in your forecast that you have internally, do you have that segment kind of growing or still shrinking, or what's your general sense for how long that this continues?
Miguel Martin -- Chief Executive Officer
Sure. So Glenn, I think first and foremost, let me highlight the critical province for Canadians is Quebec. They have a vaccine mandate in order to go in either an alcohol store or cannabis store and sales in Quebec are down 16% to 20%. Now the province is indicated by the end of the month, some of that stuff will be listed.
So the current market is continue to be impacted by COVID. And obviously, the LPs also have impacts because of labor. Short term is defined by the next three to six months, you're seeing an acceleration of pricing downward. You're seeing that in discount flower, you're seeing that in vapor.
You're seeing that in a lot of the core segments. As Glenn mentioned, there are bright spots, premium flower is holding up and concentrates and resins and rosins and things like that, there is still decent margin to be made as defined by, I don't know, 35%, 45%. And I think this market given we just went through the harvest and a variety of different things, I think you're going to probably see this go on for the next six to nine months. And it will only be with the absence of capital, which we're starting to see for some of the midsized to smaller LPs and with some repricing.
But again, 250 LPs, 125 a year ago, that's a bit of a challenge. There's really no barriers to entry. Now I would also mention that the provinces are making some subs and changes. We've been encouraged by what we've heard out of the interim CEO of the OCS, Steve Lobos, Good Guy about where Ontario is starting to go.
We are seeing some acknowledgment about some different aspects on the retail side that will create a bit of a healthy environment. But until pricing gets normalized, and you're not seeing big brands that have 100 basis points or 200 basis points of sale being sold at a negative margin, I think you're going to be in this irrational sort of situation. So our methodology, and I've been really pleased to hear some of our competitors echo this, that people are going to start to focus on profitability and thoughtfulness. Now why do I hope that any of this is going to turn around because it's not dissimilar to what you saw in California and Colorado in the early days.
And by all indicators, they seem to be 18 months ahead of us. You're seeing brands articulate, brand equity scores go up in those markets, you're seeing premium market shares be much more relevant. You're seeing manufacturers make money, and I know the economics are different in the U.S. But I think the Canadian rec business is going to get there.
It's just too big a business, is growing too much to not get there. I just think through all of those things plus a greater focus on the legacy market, and you're going to see a probability. The point is timing. And I think chasing right now doesn't make any sense.
You're seeing market shares move 100 and 200 basis points in a week. I'm used to seeing that move in a quarter. And so in that market, you don't need to be first, you can wait a little bit. And so we're rightsizing our effort.
We're focusing on those things that we can bring to both the patient and a rec consumer, as well as internationally, and we're going to have our spots. And when we come out of it, there'll be a much smaller subset of LPs. There'll be much better operators, and there'll be a really large market where people can make money. It's just going to take a bit longer than I think some would hope.
Operator
Thank you. And that's all the time we have for questions today. I'll turn the floor back to Miguel Martin for closing remarks.
Miguel Martin -- Chief Executive Officer
Well, first and foremost, let me thank everybody for taking the time and the coverage that you provide to our stock. We really appreciate it. We're really pleased with the quarter. Once again, we've put a plan out our transformation plan has three key components, which is growth in the markets where we can make money, particularly in medical.
We've done that, focus our cost structure on the opportunities as they present itself, and we've done that, raising our guidance on the $60 million to $80 million, and three, everything we're doing focused on being sustainably EBITDA positive, and you've seen that progress with the 22% compression from last quarter to this quarter. So we really appreciate it. I hope everyone is safe and well, and I look forward to seeing people in person in the near future. All the best.
Operator
[Operator signoff]
Duration: 61 minutes
Call participants:
Ananth Krishnan -- Vice President, Corporate Development and Investor Relations
Miguel Martin -- Chief Executive Officer
Glenn Ibbott -- Chief Financial Officer
Vivien Azer -- Cowen and Company -- Analyst
Mike Lavery -- Piper Sandler -- Analyst
Pablo Zuanic -- Cantor Fitzgerald -- Analyst
Andrew Carter -- Stifel Financial Corp. -- Analyst
Frederico Gomes -- ATB Capital Markets -- Analyst
John Zamparo -- CIBC -- Analyst
Tamy Chen -- BMO Capital Markets -- Analyst
Glenn Mattson -- Ladenburg Thalmann -- 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) Q2 2021 Earnings Call Feb 10, 2022, 5:00 p.m. Operator [Operator signoff] Duration: 61 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glenn Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Mike Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst Glenn Mattson -- Ladenburg Thalmann -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Highlights include three new cultivars from our breeding program launched under our refreshed Drift brand, our first offering of infused pre-rolls in hash and a bevy of new vape edible and concentrate flavors which we expect to hit the market in March. | Operator [Operator signoff] Duration: 61 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glenn Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Mike Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst Glenn Mattson -- Ladenburg Thalmann -- 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) Q2 2021 Earnings Call Feb 10, 2022, 5:00 p.m. The revenue decline is primarily attributed to price adjustments in our core and premium products, intended to improve sales velocity by reflecting the continuing price compression in the market. | Operator [Operator signoff] Duration: 61 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glenn Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Mike Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst Glenn Mattson -- Ladenburg Thalmann -- 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) Q2 2021 Earnings Call Feb 10, 2022, 5:00 p.m. If you look at key markets such as Germany and France and the U.K. and Israel and on and on, those are big markets where you're seeing medical cannabis grow in a significant place. | Aurora Cannabis Inc. (NASDAQ: ACB) Q2 2021 Earnings Call Feb 10, 2022, 5:00 p.m. Operator [Operator signoff] Duration: 61 minutes Call participants: Ananth Krishnan -- Vice President, Corporate Development and Investor Relations Miguel Martin -- Chief Executive Officer Glenn Ibbott -- Chief Financial Officer Vivien Azer -- Cowen and Company -- Analyst Mike Lavery -- Piper Sandler -- Analyst Pablo Zuanic -- Cantor Fitzgerald -- Analyst Andrew Carter -- Stifel Financial Corp. -- Analyst Frederico Gomes -- ATB Capital Markets -- Analyst John Zamparo -- CIBC -- Analyst Tamy Chen -- BMO Capital Markets -- Analyst Glenn Mattson -- Ladenburg Thalmann -- Analyst More ACB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. That's what we're seeing in other markets, and we'll see it there. |
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