Aurora Cannabis, Tilray, and CannTrust all report solid earnings and growth
A few big cannabis companies have announced their quarterly results, and the news is not terrible, but not exactly idea. Aurora Cannabis is one of the biggest companies in the industry — after Canada legalized last year, they were one of the main beneficiaries. But while business is good overall, with the company announcing that revenue grew up C$16 million to C$75.2 million, Aurora is also feeling growing pains as losses were higher than expected. Aurora lost C$77.6 million from operations, and a whopping C$160.1 million overall.
That’s not necessarily bad — Aurora simply underestimated how much money it would need to spend to grow and scale up, presumably to meet demand. But the losses did slow investors on the company a bit, resulting in a stock price drop of about 2%, to $8.38 from a yearlong high of around $9.96.
Aurora wasn’t the only company with an earnings update, however. Tilray is another Canadian cannabis producer, and that company announced sales ahead of expectations, and losses below expectations (sales were up to $23 million instead of the expected $21.4 million, and losses were about $2 million less than the $16.7 million the company expected). That’s good news from Tilray, and the company’s stock was up about 7% as a result.
CannTrust also reported a nice profit, with total revenue of C$16.9 million, and announced that its production has doubled to 9,400 kilograms of product per quarter (Aurora, by comparison, is making about 150,000 kg of product in its facilities).
But while these companies aren’t exactly where they want to be, the future is still pretty rosy — all of these companies are posting growth, and if they’ve made a mistake, it’s likely just expanding a bit faster than the market currently allows. Considering that the market for cannabis will almost certainly continue to grow, those investments will likely pay off down the line anyway. If anything, these reports just show that companies and investors need to manage their expectations, and be smart about taking advantage of a developing market for the product.