Written by Chris MacDonald at The Motley Fool Canada
Back in October 2018, Canada became one of the first countries that legalized cannabis for medicinal and recreational usage. As per the country’s Cannabis Act, the production, distribution, possession, and sale of cannabis became permitted for all adults, including those looking to consume cannabis for recreational purposes.
The size of the recreational Canadian cannabis market is expected to grow to US$4.9 billion in 2023, with the country’s largest markets being Alberta and Ontario. Many experts see this market growing to a whopping US7.6 billion by 2027, suggesting there’s plenty of upside potential for investors in this sector.
One of the top ways to play the Canadian cannabis surge is Aurora Cannabis (TSX:ACB). Let’s dive into whether it’s time to add some exposure to this name, given how hard the company has been hit in recent years and the expected growth of this sector.
Aurora Medical to launch a fresh lineup of products this spring
Aurora Cannabis has recently announced the launch of a new lineup of innovative medical goods. The products will be available for the patients at Aurora Medical and at retails for consumers all across the country.
The newly developed portfolio of the cannabis company will include strain-specific gummies, aromatic vapes, and developed cultivars. There will be an addition of two new flower products as well: Pink Diesel ’71 and Moon Berry by Occo.
These value-added products could improve the company’s margins and bring Aurora closer to breakeven sooner than expected. Of course, the company continues to burn cash at an incredible rate, which is the main concern among many investors. Thus, the success and speed of this rollout will be paramount to its success.
THC patients in Germany about to get new flower varieties from Aurora
The cannabis-producing company that opened the world to cannabis is mostly famous for manufacturing and supplying dried flowers for medicinal purposes worldwide. Now, Aurora’s ever-expanding and evolving portfolio will cater to Germany’s medical requirements.
Patients who require the THC drug for medical purposes in Germany are about to receive new flower varieties from Aurora. It has now extended its portfolio to Germany by launching two new flower products for patients: Pedanios 27/1 FRG CA and Pedanios 29/1 SRD CA. These two products are dried cannabis flowers with high saturation of tetrahydrocannabinol (THC) content.
More product innovation is great. However, Aurora will need to prove that the company can achieve bottom-line profitability at some point in the near future.
Like its peers, Aurora Cannabis is certainly behind many investors’ initial expected trajectory for profitability. Over the trailing 12 months, the company has lost $8.50 per share, despite trading at less than $1 per share at the time of writing. Not much more needs to be said with respect to the company’s fundamental position right now.
Of course, if Aurora can show a path toward profitability the market can get behind, this is among the leading Canadian cannabis stocks worth considering. Right now, I remain skeptical of the sector. However, this is certainly a high-growth stock to look at if and when we get near-zero interest rates.
Before you consider Aurora Cannabis, you'll want to hear this.
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