The summer might be over, but the sizzle and slump that plagued the season is certainly far from complete. Especially in the marijuana industry. Cannabis companies have been plagued by both a downturn in the markets, as well as the end of the hype over speculation of huge gains.
Now, companies have to actually prove the investment is worth it. No easy feet.
Some are on the way, with a few major companies announcing a profit during the latest economic reports. However, others managed to swing the other direction, warning investors it could get worse before it gets better.
In the next month, we could see a few interesting things happen, especially as legalization of the derivatives market becomes only a month away. With that in mind, let’s look at three companies who could have some major news this month.
Aurora Cannabis Let’s start with the obvious. Aurora Cannabis Inc. (TSX:ACB)(NYSE:ACB) came out a few weeks back with some good news just as other cannabis companies were posting profits. The company has been down in the dumps pretty much since bringing strategist Nelson Peltz on board, as it still has a lot to prove to investors.
But by Sept. 15, Aurora announced it would provide its quarterly update that ended June 30, and investors should look for some positive signs. Aurora believes it will see net revenue between $100 million and $107 million, a 59% increase from the previous quarter even they hit just the mid range of that estimate.
The company also expects to hit the high end of production estimates between 25,000 and 30,000 kilograms of marijuana for the quarter. Finally, it’s likely investors could see positive adjusted earnings during this report. So all in all, Aurora investors could finally see some good news come their way.
Canopy Growth Then there’s Canopy Growth Corp. (TSX:WEED)(NYSE:CGC). While Canopy shares have reduced to half the all-time high, investors are still wondering if that makes them a bargain. The company recently reported a loss of $2.28 billion, due mainly to the extinguishing of warrants of $1.18 billion from partner Constellation Brands (NYSE:STZ).
So now, investors are watching this stock very closely for any signs of life. After all, Canopy was known for making new acquisition, research, licensing and production announcements almost constantly about a year ago. Today, investors need to know all that money is actually going somewhere.
In the month leading up to the derivatives market, Canopy might start announcing some of the changes investors should have in store during the next quarter. Shareholders are eager to hear how this mega-cannabis company is going to right the ship and how the company will hit profit in the next three to five years as planned.
Cronos With profits being more of a focus for analysts these days, that leaves Cronos Group Inc. (TSX:CRON)(NYSE:CRON) in a precarious position. The company has all this cash from its partnership with Altria (NYSE:MO), but hasn’t done much with it. Instead, it’s been seeking inorganic growth through acquisition, mainly in the cannabidiol (CBD) market.
So while Canadian cannabis is still very much in need, Cronos has hardly increased its production at all. However, these acquisitions have proven beneficial to the upcoming derivatives market.
Cronos’ focus on CBD and movement into the United States means it’s trying to set itself up as the top dog of the CBD industry in Canada, while also having a major presence in the lucrative U.S. As derivatives moves closer, investors could expect some major CBD news from this marijuana producer in the next month.
Fool contributor Amy Legate-Wolfe owns shares of Aurora Cannabis and Canopy Growth.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019