It was quite a volatile week for cannabis stocks. Two of the largest cannabis companies, Aurora Cannabis and Canopy Growth, reported earnings.
Aurora Cannabis (ACB) earnings
The Edmonton based cannabis producer reported their second-quarter 2020 results before the market opened on Thursday as the stock slid another 4% in pre-market trade. When it comes to the numbers Aurora Cannabis reported net revenues of $66.6 million, excluding provisions of $10.6 million.
Net cannabis revenues excluding provisions came in at $63.2 million which was in line with recently revised guidance. The company’s cash cost to produce per gram sold was $0.88, a slight increase from the previous quarter of $0.85. Aurora Cannabis successfully launched its cannabis 2.0 products across Canada. Consumer cannabis net revenue which excluded provisions grew at 11% from the prior quarter. Aurora Cannabis closed in the green on Thursday up 2% after earnings.
It’s currently trading just 5% over it’s 52-week low that was set on Wednesday.
Canopy Growth (CGC) earnings
Canopy Growth’s sales shot up to $124 million in the company’s fiscal third quarter of 2020. This beat analyst estimates while the company also posted a narrower than expected loss. The main reason for this earnings increase was due to 140 cannabis stores being opened. Canopy Growth’s net revenue for the three months ending Dec. 31, 2019, represents a 62 percent increase from the $76 million reported in the previous quarter. The company shrunk its EBITDA loss to $92 million, compared to $156 million in the prior period.
Canopy Growth’s stock rallied on this news, at one point trading up 20%.
MedMen continues to slide
Last week MedMen announced that their CEO would be leaving the company and the stock took a hit. Since then it’s been a very volatile week for the company as it continued to slide down another 20%. We saw the company hit fresh 52 weeks lows this week as well while they search for a new CEO. MedMen has been having issues reigning in their expenses and attempting to turn a profit.
The HMMJ hits a fresh 52-week low
One of the best ways investors gauge the cannabis sector has been through the Horizons Marijuana Life Sciences ETF (trades on Canada’s Toronto stock market). It has been a way to determine the overall health of the sector due to its majority holdings in most of the large-cap cannabis companies. As the sector continues to slide, HMMJ hit a fresh 52-week low this week. This has marked 11 straight months of declines now for the sector as we move into March.
ACB shares were trading at $1.51 per share on Friday afternoon, up $0.04 (+2.72%). Year-to-date, ACB has declined -30.09%, versus a 4.51% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaron Missere
Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...
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