Tilray, Ayurcann, Aurora Cannabis - When will the boom 2.0 come?

Change of favorites in the cannabis industry

While the stars of the industry half a decade ago were the aforementioned Tilray, Aurora and Canopy Growth, new companies such as Ayurcann, founded in 2018 and based in Pickering, Canada, are now pulling ahead. Unlike its peer group, its revenues grow quarter over quarter with positive operating income and consistent profitability. For the three months ended September 30, 2021, the Canadians reported net sales of CAD 1.9 million, up from CAD 0.8 million for the three months ended September 30, 2020, a 137% increase on the same quarter the previous year.

Those looking for new cannabis products will come across Ayurcann's exclusive partnerships with national and international brands, including the UK-based Xplor. It offers highly potent active components in both THC and CBC at an exceptional value, making it unique in the market. Other international customers using Ayurcann's current product portfolio of over 40 products include Green Bee, Her Highness from the USA and Innocan Pharma from Israel. Recently, the market launch of the THC vape with high active ingredient content of the brand "Fuego" was announced.

High demand leads to capacity expansion

Ayurcann is white labeling and taking on the role of one of the leading B2B post-harvest solution providers to deliver scalable custom processes and pharma-grade products to Canada's recreational and medical cannabis industries. To meet increasing demand, the Phase 2 expansion of the Pickering facility was completed, increasing extraction capacity to up to 300,000 kg of input biomass and 2 to 3 million cannabis 2.0 and 3.0 products filled and packaged.

Another distribution channel the Canadians have embarked on is the Ayurcann Marketplace. Qualified Canadian patients can easily access various products there while receiving privacy, security, support staff and medical professionals to help educate and prescribe cannabis to meet patient needs.

The experienced management has a lot to live up to in this market. Yet the Company's stock market value, which is also traded in Frankfurt, is a manageable EUR 14.36 million.

Convincing figures

In contrast to the up-and-coming Ayurcann, Tilray, based in Nanaimo, British Columbia, has already established itself as a global player with a market capitalization of around 475 million. Tilray is one of the leading companies in the field of medical cannabis production and research. In the process, Tilray is one of the first GMP-certified manufacturers to export medical cannabis to 18 countries on 5 continents.

The Canadians were able to deliver an encouraging set of results with the release of their fiscal 2022 second-quarter numbers. In the process, revenues were USD 155.15 million, up from USD 129.46 million in the same period last year. The results were below analysts' estimates, who had expected USD 170 million. However, earnings per share were better than expected with a black zero. The majority of analysts expected a loss of USD 0.084.

The reaction to the strong figures was an increase of the share by more than 15% to USD 7.90. However, this level could not be held, so the support area at USD 6.88 is likely to be tested again. In general, the big players like Aurora Cannabis and Canopy Growth are still stuck in the correction cycle despite the horrendous losses.

Although cannabis stocks remain in correction, the market is growing at double-digit rates, especially in Canada. Ayurcann stands out for its white label strategy of high growth while maintaining profitability. Lower prices are not unlikely for Aurora Cannabis and Tilray.