What people say and what they do often does not match. But that is not the case when it comes to Aurora Cannabis (NYSE :), (TSX 🙂 CEO Terry Booth.
The director of the Edmonton-based marijuana producer – one of the largest players in the field of cannabis – has made his intentions clear in both ways over the past week.
First, according to a report in Canadian Insider, Booth bought 270,000 common stock from his company on November 25. He bought them on the open market for a price of $ 3.68 for a total of $ 993,600.
Then, four days later, Booth reiterated his optimism about the future prospects of his company during an interview with BNN Bloomberg, acknowledging that more turbulent times are ahead, especially for Canada-based cannabis companies.
According to Booth, there will be what he & # 39; massacre & # 39; massacre for growers who are unable to control the costs of producing weed, especially because the industry is faced with a growing oversupply. calls. Aurora has managed to keep its costs under control. Said Booth:
“I think you will see some slaughter in the production area when people breed it for $ 4 and $ 5 per gram. We do it for less than a cent. "
"We will not want to enter into price wars, but if the market falls in prices due to oversupply, we are best prepared to deal with it."
Viewing the future through that single lens raises a red flag for other major Canadian producers, including Canopy Growth (NYSE :), (TSX 🙂 and Tilray (NASDAQ :). Both have seen their production costs fluctuate in the upper edges.
But many lenses are needed to see the full kaleidoscope of this fast-growing industry.
Here is another lens to consider: acknowledging that the share price of Aurora was hit in the last part of 2019, the recent purchase of Booth asks the question: is it now time to buy? There is speculation as to whether many cannabis stocks hit the bottom and would rebound.
Aurora Cannabis weekly price chart
Aurora added Monday to its first approval to supply medicinal cannabis oil to Ireland. The product is now available through the Irish medical cannabis access program.
Aurora shares were closed yesterday at US $ 2.44 (C $ 3.22), a decrease of 2.4% on the day.
CannTrust Still Reeling
The Toronto Stock Exchange has formally CannTrust Holdings Inc (19459004) ] NYSE :), (TSX 🙂 assessing the ability of the company to disclose its common shares due to a failure to submit audited financial statements as of December 31, 2018. This includes interim financial statements for the first, second and third quarters for 2019.
The notification to the controversial cannabis grower is a warning that states: "If the company is unable to restore these default settings by March 25, 2020, the company's effects will be removed 30 days after that date."
CannTrust shares are expected to continue to trade normally until the March deadline.
CannTrust weekly price chart
In August, CannTrust issued a statement following Health Canada's decision to suspend its growing licenses, stating that it would have to review and possibly reformulate revisions of previous disclosures. Those adjustments have not yet been provided.
Health Canada had suspended CannTrust's licenses after discovering that it had grown marijuana in unlicensed rooms at its facilities in Ontario. This led to a cascade of consequences, including the dismissal of his CEO, suspension of his license to sell and process products, becoming the subject of class-action lawsuits and an order for more than C $ 75 million (US $ 56.4 million) ) to destroy products. Since April, the company's shares have lost more than 90% of its value. It closed nearly 3% on Monday, at US $ 0.704 (C $ 1.03).
One To Watch: OrganiGram Holdings
A small Canadian marijuana grower quietly wins on a small scale. In a sector flooded with bad news, OrganiGram Holdings Inc (NASDAQ: ), (TSX 🙂 tries to balance itself with some good news.
The New Brunswick-based grower has "one of the lowest cultivation costs per gram" compared to other growers. At a time when large companies are struggling with their production costs in a market that sees prices fall due to oversupply, this is no small feat.
It was a small beacon because the company reported its last income last week.
The figures showed a net loss of C $ 22.5 million (US $ 16.9 million), while net sales for the quarter ended August 31, C $ 16.3 million (US $ 12.3 million), considerably more than in the same quarter last year, where the figure was linked to just C $ 3.2 million (US $ 2.4 million). But last quarter revenues were lower than the C $ 24.8 million (US $ 18.7 million) that it realized in the previous three-month period.
Organization chart weekly price chart
Despite the loss, the company offered guidelines to improve revenue and outlined its plans for the so-called 2.0 cannabis products, which will be revealed in the coming months.
The company has announced that it plans to roll out sheep pens in December, chocolate with cannabis in the first three months of 2020 and powdered powdered beverages in the second quarter of 2020.
In addition to the results, Raymond James analyst Rahul Sarugaser reportedly stated in a research paper that the company is "very well positioned to survive the impending turbulence of the industry and become a sector leader."
The shares closed close to US $ 2.69 (C $ 3.55) yesterday.
Recreational weeds now legal in Michigan
The state of Michigan started the legal sale of recreational cannabis on Sunday and expectations are high.
For the first fiscal year, starting October 1, 2021, state budget planners set the target of US $ 1 billion (C $ 1.3 billion) as revenue. It is expected that the revenue forecasts from there will grow to US $ 1.5 billion (C $ 2 billion) in three years. But not everyone will have easy access, as around 1,400 of the 1,773 cities, towns, and villages of the state have chosen not to allow recreational cannabis companies to operate within their limits.
StatsCan report out for Friday
On Friday, Statistics Canada will publish its latest study: "The retail cannabis market in Canada: a portrait of the first year."
