Aurora Cannabis is back in the news and moving the Canadian marijuana sector higher. On Monday the company reported it had begun selling cannabis oil to pharmacies in Germany. Long sought after and hyped by many in the industry, Germany is a very desired market. For medical marijuana, Germany is one of the largest outside North America.
Aurora Cannabis Stock Continues Rally
Despite the Canadian Marijuana Index being relatively range bound lately, Aurora’s stock remains hot. Check out the 3-month chart below:
Aurora Cannabis – 3 Month Chart
Aurora closed well off its highs Monday, but still up 2.5% to $10.62 per share. Its share price is close to its market cap now sits at about $10.75 billion.
Only Aurora and Canopy have market caps more than $10 billion with Tilray falling way behind at $6.7 billion.
Aurora | A True Global Cannabis Play
Aurora is establishing itself as a global leader in cannabis. The company has sales and operations (in varying degrees) in 14 countries across five continents.
In A Pass For Pot Producers, we wrote about Canopy and Aurora delivering on early revenue numbers.
“Aurora released its second quarter results ended December 31st, 2018 on February 11th. While mixed, they are very telling. The company’s revenue increased to CAD$54 million, a gain of 363% year over year or 83% more than last quarter. But…
The company disclosed a quarterly loss of CAD$237.8 million. Why?
According to Jeremy C. Owens from MarketWatch,
“Large losses were expected due to a decline in marijuana-related equities last quarter, as Aurora has invested heavily in other companies in the industry and must track their performance as part of its earnings — Aurora said that those adjustments accounted for about C$190 million of its losses.”
No different than investors who’ve been on a wild ride the past 24 months, Aurora (and likely other LPs) is currently underwater on some marijuana-related equities.”
The Canadian Marijuana Index has performed well since Aurora released its Q2 results through December 31, 2018.
If the CMI continues to build support and mounts a comeback, Aurora’s C$190 million earnings loss in Q2 could be reversed.
So, Aurora still has a ways to go before fully justifying its $10.75 billion market cap; however, with its ongoing global expansion and rising revenues, the company is on its way.
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