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Money 10 Reasons It's Way Too Soon to Give Up on Aurora Cannabis

16:40  17 november  2019
16:40  17 november  2019 Source:   fool.com

Cirque du Soleil founder arrested in Tahiti for cannabis

  Cirque du Soleil founder arrested in Tahiti for cannabis Cirque du Soleil founder Guy Laliberté has been detained on the island of Tahiti on suspicion of trafficking cannabis after growing the drug on his private island in French Polynesia. This comes after local authorities intercepted someone close to Laliberté for the possession of cannabis, and allegedly found pictures of the plantations on his mobile phone.Laliberté is expected to appear before a judge on Wednesday. In a statement, Laliberté's company, Lune Rouge, said that he grows and consumes the cannabis for medical reasons, but does not sell it.

That's why it ' s a good idea to spread your money among many different assets. Mutual funds are a simple way to do this because they're bundles of many stocks and bonds, so no single stock or bond can affect your Related Articles. 10 Reasons It ' s Way Too Soon to Give Up on Aurora Cannabis .

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a man in a white shirt: A series of wood blocks spells out the word impossible. A man turns over the M block to make the blocks spell the words it's possible.© Getty Images A series of wood blocks spells out the word impossible. A man turns over the M block to make the blocks spell the words it's possible. You might be ready to abandon hope for Aurora Cannabis(NYSE: ACB). That's understandable after the company's ugly fiscal 2020 first-quarter results.

The Canadian cannabis producer's revenue is falling. Its bottom line is deteriorating. Don't let seemingly positive net income resulting from accounting for derivative liabilities fool you on that front. Aurora continues to burn through its cash.

Aurora's path to success might seem next to impossible, but it's way too soon to give up on the company. Here are 10 reasons why.

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However, Aurora Cannabis has been acquiring competitors like crazy, and that has it nipping at Canopy Growth's heels. The two companies are both plowing big money into their grow facilities to increase yield, though, so it ' s too soon to say Aurora Cannabis can close the gap.

Here are 10 reasons to encourage you to never give up : 1. Everyone struggles at some point. Every success story is accompanied by some form of People will try to talk you out of your goals. They will tell you it ’ s not possible, that it ’ s too risky, and that you’re wasting your time. Don’t listen to them.

1. Retail headwinds are only temporary

Aurora Cannabis Chief Corporate Officer Cam Battley readily acknowledged in the company's Q1 conference call that there have been some big challenges stemming from the lack of retail cannabis stores in Canadian provinces. He admitted that "these issues will take a little time to resolve," But taking a little time to resolve is a different animal altogether than not being able to resolve the issues. The reality is that these retail headwinds are only temporary. As more stores open, particularly in Ontario, Aurora's sales will soar.

2. Aurora's brands enjoy strong popularity

It's important to understand just how popular Aurora's recreational cannabis brands are. The three top-selling dried cannabis flower products in Ontario's online retail store all belonged to Aurora. Battley said Aurora's brands "remain either No. 1 or No. 2 in all the major markets across the country."

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Aurora Cannabis (NYSE:ACB) bulls are looking tired. Aurora in particular looks to have too much supply given the weak demand trends. But it isn’t working out that way . Aurora has a unique pitch for investors with its focus on medicinal and international markets, but that brings its own share of risks.

I’m much less interested in sports than I am in the constantly evolving dynamics between professional athletes, the fans who love (or hate) them, and the journalists who cover them. Montreal just got a master class in those often dissonant allegiances with the recent drama surrounding the trade of

3. Medical cannabis sales momentum should pick up

One positive for Aurora in the first quarter was that its medical cannabis sales in Canada increased 3% quarter over quarter. The company's number of active medical cannabis patients in the country jumped 8% from the prior quarter. Aurora is actively trying to take medical patients away from other licensed producers with some temporary pricing incentives. It seems quite likely that the company's medical cannabis sales momentum will pick up.

4. Rumors of a supply glut are greatly exaggerated

You've no doubt heard some saying that a supply glut is already beginning to show up in the Canadian market. But Aurora's average net selling price per gram in the adult-use recreational market rose 7% quarter over quarter in Q1. Aurora CFO Glen Ibbott stated that this increase shows "that demand for high-quality recreational cannabis is strong." He's right. There could be oversupply scenarios for certain types of cannabis products, but the rumors of an overall supply glut are greatly exaggerated. Aurora's higher average selling prices prove it.

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Now, it ' s up to the company's fundamental business operations to live up to the hype and prove that In any event, Aurora Cannabis has the potential to rebound from its losses so far in 2018 if things However, it will have to be more efficient in raising capital and finding ways to grow if it wants to give

Give it time. The effects will wear off within a few hours without lasting effects. Marijuana does not kill. It ’ s enough to make you sneeze and shift your attention from your anxiety. Others recommend using fresh lemon or lemon oil in the water you use for hydration because the citrus terpenes act

5. Aurora's gross margin remains the best in the industry

Aurora reported a gross margin in the first quarter of 58%, the best in the Canadian cannabis industry. The company is able to deliver such an impressive gross margin because of its low production costs. Because of its strong gross margin, Ibbott stated, "Aurora can compete strongly in any market situation and would still deliver healthy returns at pricing that would not be sustainable for others." That isn't just spin. If a supply glut does come, Aurora would be in a better position to weather the storm than most of its peers. And if demand continues to grow faster than supply, Aurora will be able to make more money than most of its peers.

6. The Cannabis 2.0 market has yet to fully blossom

Although the Cannabis 2.0 cannabis derivatives market technically opened on Oct. 17, sales won't begin until mid-December because of the 60-day notification period required by Health Canada for new products. This market won't really begin to take off until well into next year. Larger companies such as Aurora should be able to benefit more from the coming growth in the Cannabis 2.0 market than smaller cannabis producers.

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This could give Aurora a competitive advantage in the important German medical cannabis market Even if Aurora does find a partner, it might not involve a sizable equity investment like Canopy There are definitely several reasons to like Aurora Cannabis ' prospects. But, for now at least, I think the

For that reason , it 'll be a great catalyst for Aurora Cannabis in the short-term, as will other countries it competes in that offer the same opportunity concerning recreational sales, such as Uruguay. But that' s only a secondary reason to invest in Aurora . The primary reason should be its potential on the

a group of palm trees: Shadow of a dollar sign on top of a pile of cannabis leaves© Getty Images Shadow of a dollar sign on top of a pile of cannabis leaves

7. International markets are ripe for growth

Aurora's international medical cannabis sales jumped 11% quarter-over-quarter in Q1 and now generate 7% of the company's total net revenue. The company expects even higher growth rates in international markets in the future.

8. The company is cutting its capital expenditures

Although Aurora took a step in the wrong direction in Q1 toward achieving profitability, the company's management appears to be serious about its commitment to become profitable. Aurora decided to halt efforts to complete construction at its Aurora Nordic 2 and Aurora Sun facilities. These moves will cut the company's capital expenditures by around $190 million in Canadian and will improve its bottom line.

9. Aurora is largely defusing its "ticking time bomb"

I warned a few months ago about Aurora's "ticking time bomb" -- CA$230 million in convertible debentures that mature in March 2020. The company appears to be largely defusing this time bomb, though, with a plan to allow investors to convert their debentures to Aurora stock earlier than the maturity date at a 6% discount to a five-day volume-weighted average trading price. Aurora has already lined up support for the plan from investors owning around CA$155 million of the debentures. This move helps Aurora in that the company won't have to scramble to raise a ton of cash to pay off debenture holders in 2020.

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It ’ s like a drug that you have gone so long without you can feel the withdrawal lingering in your It ’ s easy to feel like we are either going too quickly or not quickly enough — that the trajectories of all 10 . It isn’t actually something you can give up on . In all honesty, we are only kidding ourselves when we

It can be configured to make backups and keep backups for customized to your liking. In fact, your regions are completely saved in your backups. Region WindLight : With recently implemented region WindLight on SecondLife, Aurora -Sim has processed the code and has made it to where can set

10. A U.S. CBD partnership shouldn't be too far off

Aurora still hasn't announced a major partnership deal with a U.S. company like some of its peers have. However, Executive Chairman Michael Singer said in the Q1 call that Aurora is "actively involved in negotiating a long-term relationship" with multiple consumer packaged goods companies. He added that Aurora isn't just looking at entering the U.S. CBD market but is also hoping that its partnership(s) will be "a springboard" for international expansion.

Hold on to those towels

Am I saying that Aurora Cannabis is a great stock to buy right now? No. There will almost certainly be a tremendous level of volatility for marijuana stocks, in general, that will affect Aurora as well.

However, I do think that it's way too soon to predict a doom-and-gloom scenario for the company despite its admittedly disappointing Q1 performance. Hold on to those towels instead of throwing them in the ring: Aurora isn't done yet.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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