Is Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB) a global growth story?
We asked ourselves this question on countless occasions and continue to have mixed feelings when it comes time to provide an answer.
Although Aurora Cannabis is actively selling cannabis in several countries outside of Canada, the revenue from this side of the business does not account for a significant share of the amount of net cannabis revenue that is generated by the entire business.
We believe the success of Aurora Cannabis’ business is based on what happens in the United States (US). A few years ago, the company acquired a US cannabidiol (CBD) business and the management team expects this vertical to play a key role with how it capitalizes on the US cannabis industry.
When it comes to the US asset that is owned by Aurora Cannabis, we are not that excited. We believe its peers like Canopy Growth Corp. (Nasdaq: CGC) (TSX: WEED) or Tilray Brands Inc. (Nasdaq: TLRY) (TSX: TLRY) have acquired more attractive US cannabis and beverage brands and consider these businesses to be more attractive.
Last week, Aurora Cannabis announced the expansion of its portfolio in Germany with the launch of two new cannabis flower products for patients. When it comes to the international cannabis market for Aurora Cannabis, we expect Germany to play a very important role in the business. We are favorable on the assets that it owns in Germany and consider the EU to be a major potential market for the business over the long-term.
Over the next year, we expect the percentage of net cannabis revenue from international markets to increase for Aurora Cannabis. We believe Germany and Israel will be the biggest contributors to the amount of its international cannabis revenue and will monitor how this aspect of the business advances in 2023 and beyond.
During the last year, Aurora Cannabis has been under massive pressure and this is a trend that we expect to continue in the near-term. Going forward, we expect the stock’s performance to be based on regulatory developments in the US and company achievements.
If you are interested in learning more about Aurora Cannabis’ international cannabis vertical, please send an email to support@technical420.com with the subject “Aurora’s International Cannabis Vertical” to be added to our distribution list.
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