Aurora Cannabis stocks has been struggling recently in Canadian cannabis market. The pot sales in the home country have not materialized for the company in a meaningful way.
The company can materialize the US market where great global opportunity exists as stock valuations promise the best relative value. The stock currently is back trapped below $9 and desperately needs access to the massive US market.
The company would be reporting its fiscal third quarter results soon. Q3 will be crucial for investors as they want to sense how the Canadian recreational marijuana market is trending.
There are concerns surrounding the Aurora stock and there are a lot of expectations as well. As the cannabis opportunity in Canada is in nascent stages, the forecast mentioned here is more of an educated guess.
Aurora Cannabis has signed an agreement for the acquisition of Chemi Pharmaceutical which is a private lab operating from Ontario. The lab primarily focuses on analytics for the cannabis and Pharma industries. The lab would be merged with Anandia Laboratories, which is a subsidiary of Aurora Cannabis.
Aurora has announced that it purchased the remaining shares of Hemco, which is a leading provider of hemp-based nutraceuticals, fiber and foods. The company is investing in commissioning a hemp processing facility as well for the extraction of CBD.
The company also acquired Whistler Medical Marijuana Corporation, which is a premium cannabis brand in Canada. This deal will help in the expansion of both consumer and medical markets for Aurora. The company has also obtained approval from German Pharmacies for selling cannabis oils.
Aurora Cannabis Stocks (NYSE:ACB)
The company has managed to scale its operations recently and the production is expected to go for 500,000 kilos per year by 2020.
The company has over 40 clinical trials and has managed to build a strong distribution footprint in Latin America and Europe. With Nelson Peltz as the Strategic Advisor, ACB can find major strategic partners that can help propel the company’s growth. Analysts are of the assumption that things may soon progress for the company.
Shares of Aurora Cannabis were down by 3 percent ahead of the release of Quarterly earnings. The company announced that it received the first delivery of finished cannabis derivatives from Radient Technologies.
Both the companies established a partnership during 2017 for utilizing the cannabidiol extraction technology of one company to create cannabis derived products. The CEO of Aurora, Terry Booth, believes that the investments made will pay rich dividends once operations are fully scaled up.
He also stated that the addition of Radient’s technology would increase the ability of Aurora to deliver high-value cannabis products thereby complementing the existing internal extraction capabilities.
Strong Revenue Growth
Ben Isaacson and Oliver Rowe, Scotiabank analysts are of the opinion that the cannabis industry in Canada is experiencing initial hurdles. They also said that one can expect a strong revenue growth by Aurora in Q3 because of positive investment deals.
Cam Battley, the Chief Corporate Officer, said that an increase in product availability for sale may also surge for fiscal Q3. Although Aurora posted a net loss of CA$237.8 million during Q2, the company has managed to make a decent recovery through its derivative investments.