Aurora Cannabis focuses on the US CBD market

On September 12, Michael Singer, president of Aurora Cannabis (ACB), met with CNN Business. "We expect to have a significant footprint in the United States in the coming quarters," he said. The company also highlighted its "laser-centric" position in the hemp-derived CBD (Cannabidiol) market in the United States on its fourth quarter results. call.

BDS Analytics and Arcview Market predict that the combined cannabis and hemp CBD markets in the United States will reach more than $ 20 billion by 2024. Based on CBD sales of $ 1.9 billion in 2018, this estimate indicates a compound annual growth rate of 49%. Cowen also expects total CBD sales to reach $ 16 billion by 2025. Nielsen expects the US hemp-derived CBD market to reach $ 6.0 billion by 2025.

The company is striving to exploit this opportunity by becoming one of the first to enter the underfed CBD market in the United States.

Aurora Cannabis highlights US CBD strategy

Aurora Cannabis has made its first official entry into the US hemp-derived CBD market by forming a clinical research partnership with the UFC (Ultimate Fighting Championship). According to its call for results, the company will evaluate the potential of CBD in the treatment of pain and overall recovery of athletes.

According to his press release, ACB focuses on product development and brand building in the CBD space derived from American hemp. The company aims to launch products based on robust scientific data. This could prove to be a key differentiator in comparison to untested CBD products. To find out how important scientific discussion becomes in the cannabis industry, read the article Medical Cannabis: A Hot Topic at Events Around the World.

How changing regulations can affect Aurora Cannabis

Aurora Cannabis's enthusiasm for this opportunity was evident in her call for results. Cam Battley, General Manager, pointed out the possibility that the company is entering the hemp-derived DBC business landscape before the FDA's expected clarification on the Farm Bill. However, this could expose the company to significant regulatory risk. To learn more about the Farm Bill, read the Farm Bill paves the way for cannabis companies.

The cannabis sector as a whole, however, awaits clarification from the government on issues related to interstate trade in hemp plants. According to Marijuana Business Daily, the lack of a standardized test mechanism for THC (tetrahydrocannabinol) in all states can lead to legal problems for companies. The FDA also uses it to assess the regulatory frameworks governing CBD-based products marketed for non-drug use.

According to its fourth quarter financial results, Aurora Cannabis is primarily concerned with the FDA's policy on ingestible CBD-based substances. The company does not expect a negative response from the FDA. Instead, he expects indications on the use of broad-spectrum CBD or CBD isolates in ingestible materials.

According to its fourth quarter financial results, Aurora Cannabis predicts that the FDA could require that the ingestibles contain only CBD isolate. According to hempika.com, CBD isolate is the purest form of CBD of natural origin. The company believes that this conclusion makes sense, since the cannabis plant contains about 112 to 113 cannabinoids. The World Health Organization has also indicated that only pure CBD is safe for ingestion. Aurora Cannabis therefore employs to align its US strategy with advance FDA rulings.

Competition in the US CBD space

According to the results of its first quarter, Canopy Growth (CGC) has already planted thousands of acres of hemp in the United States. The company has also secured raw material resources and processing capabilities for the upcoming launch of the product.

Based on the results of its first quarter, Canopy Growth plans to expand its extraction and production capacity at its production facility in Kirkwood, New York, by 2021. The company also plans to increase number of manufacturing facilities to support its CBD based vape and processing systems. beverage production by 2021. It has also invested in building a strong team to support its future CBD activities in the United States.

To learn more about the latest launch of Canopy Growth in the US CBD market, read Martha Stewart and Canopy Launch Cannabis Products.

How Analysts Evaluate Aurora Cannabis

In the fourth quarter, Aurora Cannabis posted revenue of $ 74.98 million, a 407.02 percent year-over-year increase, but $ 3.26 million lower than the consensus estimate. The company also reported non-GAAP EPS of $ 0.04, an increase of $ 0.04 over the consensus estimate. Subsequently, the Aurora cannabis stock fell 9.24% and closed at $ 5.89 on September 12th. To learn more, read the stock Aurora cannabis, fallen to about 9%: it's time to buy?

Despite this setback, US analysts maintain a 12-month consensus target of $ 8.5 for the company. This indicates a potential upside of 42.86% based on its closing price of $ 5.95 on September 13th. Six US analysts currently cover the company. Of these, two give him "solid purchases", two give him "purchases" and the other two give him "reservations".