ACB Aurora Cannabis Inc

Even though the US cannabis industry continues to make strides toward legal acceptance, 2022 wasn’t a good year for most marijuana stocks, primarily because cannabis companies have failed to turn growth into profits. E-commerce solutions could dramatically impact margins and lower customer acquisition costs.

With the increased adoption of e-commerce by dispensaries and cannabis retailers, the legal marijuana market was valued at $17.50 billion in 2021 and is estimated to reach $80.1 billion by 2031, growing at a CAGR of 16.9% from 2022 to 2031, according to recent research. The main drivers for this expected growth are growing consumer demand, increasing legalizations in various countries and regions, and changing perceptions of cannabis use for medicinal and recreational purposes, with adult use (recreational) comprising 54.6% of the cannabis market.

Multichannel and omnichannel support let cannabis e-commerce websites maintain consistency no matter how a customer interacts with the brand. Creating a unified customer experience is especially important given the requirement for cannabis brands to operate across multiple channels, such as physical stores, different branded e-commerce websites, and government-regulated marketplaces. Privately held Leaflink is one of the leaders in cannabis e-commerce. Leaflink has raised $479 million in funding over eight rounds, with the latest round of $100 million having closed on February 1, 2023.

Cannabis companies that could benefit from the future growth of the cannabis market and e-commerce solutions include: Tilray Brands, Inc. (NASDAQ: TLRY), CannaPharmaRx (OTC Pink: CPMD), Aurora Cannabis, Inc. (NASDAQ: ACB) and Canopy Growth Corporation (NASDAQ: CGC). 

Tilray Brands, Inc. (NASDAQ: TLRY) is a global leader in cannabis research, cultivation, processing and distribution. According to its website, Tilray is the first GMP-certified medical cannabis producer to supply cannabis flower and extract products to tens of thousands of patients, physicians, pharmacies, hospitals, governments and researchers on five continents.

For the second fiscal quarter ending November 30, 2022, Tilray's gross profit rose to $40.1 million, a 22% increase, year over year, while adjusted gross margin held at 29% compared to the year-ago quarter. Tilray's gross profit on cannabis increased 37% to $18.6 million from $13.5 million in the prior year quarter, while the gross margin percentage increased to 37% from 23%. Tilray had adjusted EBITDA of $11.7 million, marking the 15th consecutive quarter of positive adjusted EBITDA.

CannaPharmaRx (OTC Pink: CPMD) is focused on acquiring and developing state-of-the-art cannabis grow facilities in Canada. CannaPharmaRx recently announced it added to its revenue stream by purchasing the e-commerce and financial platform LTB Management. LTB has direct experience developing online website applications for various customers, including medical cannabis deliveries for pharmacies, distributors, and producers on an international scale. According to a recent press release, this acquisition will augment CannaPharmaRx's anticipated cannabis sales, which the company expects to produce and deliver at an annual run rate of nearly $30 million.  

During 2023 CannaPharmaRx plans to further accelerate its E-commerce applications. The company plans to complete its first harvest during Q1 2023 and additional offtake agreements in multiple countries.

Aurora Cannabis (NASDAQ: ACB) is an Edmonton, Alberta-based cannabis company serving the medical and consumer markets. Aurora's adult-use brand portfolio includes Aurora Drift, San Rafael '71, Daily Special, Whistler, Being, Greybeard, and CBD brands, Reliva and KG7. Medical cannabis brands include MedReleaf, CanniMed, Aurora, and Whistler Medical Marijuana Co. Aurora also has a controlling interest in Bevo Farms Ltd., North America's leading supplier of propagated agricultural plants.

Aurora recently posted revenues of $50.95 million for its second quarter that ended December 31, 2022, versus revenues of $48.07 million. The company had a quarterly loss of $0.14 per share versus a loss of $0.42 per share a year ago. These figures are adjusted for non-recurring items. The current consensus EPS estimate is -$0.06 on $48.38 million in revenues for the coming quarter and -$0.34 on $176.58 million in revenues for the current fiscal year. 

Canopy Growth Corporation (NASDAQ: CGC) is a North American cannabis and consumer packaged goods company focusing on premium and mainstream cannabis brands including Doja, 7ACRES, Tweed, and Deep Space. Its CPG portfolio features sugar-free sports hydration brand BioSteel, targeted 24-hour skincare and wellness solutions from This Works, gourmet wellness products by Martha Stewart CBD, and category defining vaporizer technology made in Germany by Storz & Bickel. Canopy Growth has also established a comprehensive ecosystem to realize the opportunities presented by the U.S. THC market through its rights to Acreage Holdings, Wana Brands, and Jetty Extracts.

Canopy Growth recently announced net revenue of $101 million for the third quarter of its 2023 fiscal year, a 28% decline from the same quarter in fiscal 2022. The company posted a net loss in Q3 FY2023 of $267 million, which was a $151 million increase from Q3 FY2022. Company Growth announced a cost reduction program of $140-$160 million over the next 12 months.

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