Investors largely shunned them as they were battered by numerous challenges, including market saturation and the consumer taste for lower-margin product, not to mention a resurgent coronavirus pandemic.
So there are a comparatively high number of producers and retailers serving a market that’s quite limited, at the end of the day.
Meanwhile, since marijuana is still a Schedule 1 drug at the federal level in America, foreign companies can’t directly import product into this vast and highly tempting market.
That’s why the bottom lines of most Canadian weed players are, more often than not, written in deep red.
Canopy Growth has at least posted one profitable quarter over the past year-plus, but that’s really not much to write home about — particularly if we look at the more consistent profitability of selected U.S.
It’s telling that in its most recent quarterly earnings report, Aurora led off by touting its “transformation plan.” This is its ongoing effort to trim costs through measures like facility closures and worker layoffs.
First, if a company is leading off an earnings report by talking about the apparent effectiveness of its cost-cutting effort, it probably has little else to cheer about.
Third, even in Aurora’s rosiest scenario it’s going to take over a year to hit this goal.
federal law that would allow pot imports, or a sudden explosion in medical marijuana legalization elsewhere abroad, are both pipe dreams for now.
I don’t know if Aurora stock is necessarily going to crash in 2022.