When a company issues guidance, it can be helpful for investors to look ahead to how the business might perform in the future.
But the danger in an industry like cannabis is that it’s still in its relatively early growth stages , and it can be difficult to make projections.
It was just three months earlier in August when Canopy Growth said it was still “committed” to reaching its goal and posting adjusted EBITDA profit by the end of the current fiscal year.
However, this type of disappointment is nothing new for investors, as in 2019 the company predicted its annual revenue would top CA$1 billion for fiscal 2020.
Another company that could be setting up investors for an even bigger disappointment is Tilray , which became the top cannabis producer in Canada after acquiring Aphria earlier this year.
A major concern I have is that it would involve the company more than quadrupling its annual revenue and relying on sales from a U.S.
The danger for investors here is that Tilray has made this goal well-known, and there will be lots of pressure for the company to meet it.
a year from now” as excitement was rampant in the sector after Democrats obtained control of the House and Senate, with many in the cannabis industry believing legalization was imminent.
That’s why, for the volatile cannabis sector in Canada, companies are better off just not making any aggressive forecasts right now.