For most market sectors, a company's earnings report allows investors to assess performance and measure how management has performed. And for that reason, these reports are awaited with great anticipation.
In the cannabis sector, however, the release of revenue is sometimes viewed slightly differently. Example: Aurora Cannabis (NYSE :), (TSX :).
When the Edmonton-based company sets its doors later in the day after the closing bell, the information will be used to assess how well the company has managed expectations. That alone is what investors will respond to.
The main financial headlines about the marijuana grower's fourth quarter results are already out, although they have not yet been officially reported. This is one way to avoid the shock of bad news – tell investors carefully.
The results were essentially revealed a few weeks ago when the company announced its new CEO, Miguel Martin. Aurora took the opportunity to share news and would also take a write-off of C $ 1.8 billion (US $ 1.368 billion). This is on top of a previous $ 1 billion write-off it had taken earlier this year.
The only measure still expected to be expected is revenue growth. But from a strategic standpoint, investors are eager to learn all the details about Aurora & # 39; s plan to move further into the US market. This is where the company is hoping it can turn its numbers.
While other Canadian-based cannabis companies have sought to increase revenues in the derivatives markets – commonly referred to as the 2.0 products – Aurora has chosen to focus on US markets. How quickly it can convert that strategy into sales isn't entirely clear.
Trulieve Increases Its Footprint
Florida-based cannabis company Trulieve Cannabis (OTC :), (CSE 🙂 announced last week that it is increasing its footprint in the US expand with the purchase of two marijuana companies in Pennsylvania: PurePenn and Solevo Wellness.
The deal for PurePenn, a medical marijuana grower and processor licensed by the Pennsylvania Department of Health, includes a payment of $ 46 million – $ 27 million in Trulieve stock and $ 19 million in cash, with possible additional $ 60 million if certain financial goals are met.
Trulieve has agreed to pay $ 20 million for Solevo, which operates three Pittsburgh medical marijuana dispensaries, divided equally in cash and stock, with a possible additional payment of $ 15 million upon reaching agreed financial benchmarks.
While Trulieve's shares have fallen about 11% since the deal was announced, their value has risen more than 110% in the past year.
Hexo Continues To Disappoint
For corporate marketing heights, the legal marijuana trade has not produced too much in the past year. In the absence of positive news, analysts have been looking for the next best thing: signs of good news. Even in this category, one Canadian cannabis grower continues to disappoint: Hexo (NYSE :), (TSX :).
Yesterday, shares of the Ottawa-based cannabis company closed just over 8% as it continues to struggle to gain a foothold. Hoping to send an uplifting signal last week, HEXO announced the appointment of a new chief financial officer.
But the move fell flat because analysts were unimpressed. One reason: It's the company's fourth CFO named last year.
The new CFO is Trent MacDonald, a former president of the Rx Drug Mart pharmacy chain, the Canadian bookstore Indigo (TSX 🙂 and the supermarket chain Sobeys.
Another reason the news failed to impress was outlined by Jefferies analyst Owen Bennett, who pointed out MacDonald's lack of experience in the consumer goods world. As Bennett said, the choice does not inspire confidence.
In the past year, Hexo shares have lost more than 80% of their value.
