Strong economic activity
In the previous part, we discussed the Organization for Economic Cooperation and Development’s expectation of significant GDP growth from the cannabis industry. Strong economic activity translates into the companies (MJ) having a strong financial performance. Most of the major cannabis companies (HMMJ) are expected to see revenue growth in the upcoming quarter.
Revenue growth expectation
Aphria (APHA) is scheduled to report its earnings next week. The company is expected to report growth of nearly 356% YoY (year-over-year) in the second quarter ending in November to 38.8 million Canadian dollars from 8.5 million Canadian dollars in the same quarter last year. To learn more, read Aphria’s Earnings: Analysts’ Expectations Next Week.
Canopy Growth (WEED) (CGC) is expected to report revenue growth of 314% YoY. Cronos Group (CRON) is expected to report 448% revenue growth, while Aurora Cannabis (ACB) is expected to report 475% revenue growth for the quarter ending in December. These numbers are analysts’ estimates—they aren’t set in stone. Even if these companies report half of the growth estimate, it’s still significant. The upcoming quarter will be the first quarter that the companies record recreational sales growth.
Next, we’ll discuss why global medical cannabis will be important.