Close menu

October 26th, 2021 | 11:37 CEST

Tilray, Ayurcann, Aurora Cannabis, Canopy Growth - Sow first, then reap

  • Cannabis
Photo credits:

After the hype around cannabis companies like Aurora Cannabis, Tilray and Canopy Growth in 2018, consolidation followed, and it continues. But the industry is moving mightily. Smaller companies disappeared from the price list, while big players expanded their market power through mergers and acquisitions for the next few years. The cannabis industry is predicted to grow tremendously in the future. The fantasy is fueled by government legalization plans in several states, including Germany.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: TILRAY INC. CL.2 DL-_0001 | US88688T1007 , AYURCANN HOLDINGS CORP | CA05476A1012 , AURORA CANNABIS | CA05156X8843 , CANOPY GROWTH | CA1380351009

Table of contents:

    Canada as legalization pioneer

    While Scholz, Habeck and Lindner are negotiating the next steps regarding the legalization of cannabis, among other things, during talks on the traffic light coalition, the intoxicant has already been legal in Canada since 2018. Even before legalization, Canada was the country with the most cannabis users in the world. A quarter of the population regularly consumes hashish, marijuana or cannabis-infused edibles recreationally or for medical reasons. According to Stats Canada and Equity Research, the Canadian legal cannabis market was worth USD 3.1 billion in 2020 and is expected to triple to USD 10.1 billion by 2025. The global legal cannabis market is expected to grow up to USD 66.3 billion during the same period.

    The reasons for the vast growth rates can be explained in the broader product range. In 2018, legal consumption was limited only to flowers, oils, plants and seeds. A year later, Cannabis 2.0. took the next step and expanded for over-the-counter marijuana to include cannabis derivatives, including beverages, edibles, e-cigarettes, and so-called vapes. With the emerging third wave, the billion-dollar healthcare sector, in particular, is now to be fed with cannabis products. Here, bath products, skincare creams and lotions, and ointments are increasingly hitting store shelves.

    White label the solution

    For smaller cannabis companies, the expansion of the product range is becoming an ever-greater challenge and cannot be managed alone for reasons of cost, capacity and licensing. White labeling, which is becoming more prevalent in the industry, allows companies to focus on establishing their brand and accelerating the expansion of their product line without investing in infrastructure, processing labs, and production facilities required to manufacture these products.

    The manufacturing of each product will be handled by one of the leading B2B post-harvest solutions providers, Ayurcann, which focuses on providing scalable custom processes and pharmaceutical-grade products to Canada's recreational and medical cannabis industries. In doing so, customers can choose from 40 products ranging from creams to vape pens to balms developed by Ayurcann and bring them to market under their brand. It is subject to a flat fee or a percentage of product sales. More than 20 customers are currently using the white-label services, including the Israeli companies Bazelet, Fuego and Vida or the US company Green Bee, which specializes in women's products.

    Enormous potential

    In doing so, the Ontario-based licensed cannabis extraction company is focused on the Canadian market. It is seeking strategic partnerships with international brands to help them distribute in the North American country. The Company's operations are close to more than 200 cannabis producers, allowing for efficient product transportation. The Company has a 10,845-square-foot facility used for co-packing, white labeling and high-purity extract processing, and the production of proprietary oil distillates for Cannabis 2.0 and 3.0 products. The production capacity is 200,000 kg of biomass per year and is planned to be expanded to 300,000 kg due to increasing demand, which corresponds to 30,000 kg of distillate production.

    Figures inspire

    The quarterly figures of the debt-free Company already show the significant economies of scale. Net sales for the third quarter of 2021 increased 67% quarter-on-quarter to USD 2.6 million, with an adjusted EBITDA of USD 1.1 million. Sales of the Company's oil distillates were the primary revenue driver, accounting for 84% of the total with a gross margin of around 35%. In comparison, the fast-growing white label business contributed 16% of revenue with a margin of 60%. Further increases are expected in the fourth quarter. Ayurcann's stock price in Frankfurt is currently EUR 0.12. The analyst firm Fundamental Research Corp. sees the Company as a buy candidate with a price target of the equivalent of EUR 0.49.

    Anticyclical positioning

    Despite a brief flare-up of euphoria and sharply rising prices, the price increases were used again to sell-off at the end of the week in cannabis stocks. The market is currently not yet at the end of the correction. In the long term, the segment should again be one of the winners. Due to this, the current correction offers an anti-cyclical entry in the big players such as Canopy Growth, Tilray and Aurora Cannabis. For all three stocks, the setback potential is between 10 and 15%.

    With legalization plans in several states and the expansion of products to Cannabis 3.0. the industry should face a prosperous future in the long run. In addition to the Big Three mentioned above, Ayurcann is attractive due to its market leadership in white label solutions.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.

    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

    Related comments:

    Commented by Nico Popp on February 2nd, 2023 | 18:04 CET

    Bulging pipeline at BioNTech, Cardiol Therapeutics - what is the problem at Aurora Cannabis?

    • Biotechnology
    • Cannabis
    • Cancer

    He who heals is right. It is not quite that simple with active ingredients that are about to be approved. Drugs and vaccines must undergo extensive studies and, last but not least, have to prevail against the existing competition. We look at the pipelines of three hot stocks and venture a forecast: Where is the greatest potential for investors?


    Commented by Fabian Lorenz on December 1st, 2022 | 11:55 CET

    Comeback stocks: Nel, Aurora Cannabis, Barrick Gold, Tocvan Ventures

    • Mining
    • Gold
    • Hydrogen
    • Cannabis

    Gold, cannabis and hydrogen could be among the top trends of the coming year - also on the stock market. Due to full order books, Nel could be poised for a comeback in 2023. At least sales are already secured until mid-2024. Now, all that is left is to cut the loss to reach analysts' price targets. Aurora Cannabis has largely completed its turnaround and is also hoping for legalization in Europe and the US. Driven by a strong gold price, mining stocks have already jumped. Now exploration companies should follow. Tocvan Ventures is one of them. And with the gold explorer, investors can look forward to a regular news flow in the coming year. Are the three candidates comeback stocks in 2023?


    Commented by Stefan Feulner on November 28th, 2022 | 10:41 CET

    SynBiotic SE, Cardiol Therapeutics, Canopy Growth - Like hitting the jackpot

    • Cannabis
    • Investments

    The final draft of the German government's key issues paper on the legalization of cannabis in Germany is ready, and final approval is likely to be a mere formality. For the companies concerned, this is equivalent to winning the lottery. The global cannabis market is expected to grow by 13.9% annually to USD 64.91 billion between 2022 and 2027. However, these profit increases have yet to reach the stock market. Some companies, for example, are trading below cash, while others lost more than 90% of their value in the correction that has been underway since 2019.