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Cannabis stocks gathered after Aurora posted its first profits in December



Cannabis stocks were higher on Tuesday after investors first mastered the earnings reports of the season and the first look at bank accounts that Democrats hope to pass in 2019.

Aurora Cannabis Inc.

ACB, + 1.95%

+ 1.47%

Shares last traded 2% after the company said it had increased nearly four and gained strong market share in its second fiscal quarter, but also had large losses due to declines in marijuana-related shares. Aurora has invested heavily in other companies in the industry and should monitor their performance as part of its revenue. These adjustments amounted to about $ 1

90 million ($ 143 million) of losses and came after a sale in the sector.

Figures reflect the first full quarter after lawful cannabis sales in Canada in October, the first industrialized nation to sell the substance for recreation. Aurora said C $ 21.6 million of total sales of C $ 54.2 million came from Canada, which suffered a shortage at the start of the new regime. Aurora Cannabis's revenues show a big increase in pot sales but a worrying trend

Supreme Cannabis Co.

-1.38%

Shares declined by 3% after the company reported a profit for its second fiscal quarter. The company had a net loss of $ 1.55 million, or 1 cent per share, in its second fiscal quarter to December 31, which is less than $ 2.03 million, or 1 cent per share published in the previous period. Revenues rose to $ 7.72 million from $ 1.68 million.

However, the company may have been too optimistic about the valuation of its cannabis plants before the sale. The supreme thinker estimates that the change in the fair value of the growth of his biological assets reached 10 million USD, but the realized changes in the fair value of the sold or impaired inventories were 6 million. The combination of C $ 6 million with the cost of production of C $ 4 million exceeds the revenue of C $ 7.72 million.

IPO of marijuana in 2019: These companies could be the next available stocks

According to International Financial Reporting Standards or IFRS, the standard used in Canada, account for the value of a biological asset at different stages of its development as a way of smoothing revenue over time. For cannabis companies, this means that they have to book the theoretical value of the culture before they sell it, according to Mike Miller, CFO at White Sheep Corp. If they ultimately sell it for less than the value they have provided, they will have to make a correction in the next quarter.

"The cannabis market has seen tremendous price volatility, making it difficult to guess how valuable biological assets are," he said. Since the industry is still in its infancy, there are no futures markets to help pricing and many price estimates are based on medical cannabis prices that are higher than the prices that retailers can get for cannabis for recreation, he said.

"If it was 100% accurate, the revenue count should be equal to the production cost and the correction, and zero. This will be a problem for many companies this season of profits and while the industry is developing, "he said. [19459109] [19459109] Cannabis Profit: The Decrease in Stocks of Cannabis: Cannabis Profit: The Decrease in Cannabis Income the pot can drown Aurora and others in red ink

Also Tuesday, MedMen Enterprises Inc.

Executive Director Adam Berman issued a statement stating that he defended himself from charges made by former finance director James Parker in a lawsuit. Parker, who left office in November against a half-pound increase in capital, sued the company in Los Angeles for a breach of contract and unlawful termination, among other things. At that time, MedMen declined to comment on the resignation of the CFO and said that the cut in funding was almost halved due to a "significant sell-off" on the global market.

Burman said that Parker had worked at MedMen for less than 18 months before resigning last November and has now "filed an unfounded, unlawful trial for his financial gain. We will fight vigorously in court, "he told MarketWatch in a statement.

Parker's suit claims to have been constructively suspended for no reason, and that it was supposed to become "eye closure and deafness for unlawful and illegal behavior." company. In addition, the CEO claims to be "confronted with racial, homophobic and misogynistic epithets and insults, drug and alcohol abuse, personal humiliation triggered by the words and actions of the Chief Executive Officer and the company's president."

Beerman said he was married to a Latina woman in the last 15 years, while MedMen co-founder Andrew Modlin is an open-ended gay man. MedMen shares fell by 5%. Meanwhile, US Congress Democrat leaders have drafted a bill that will allow cannabis companies to make their profits in banks, according to Marijuana Moment, a website that works with activists, industry representatives, and politicians on cannabis-related trends.

19659002] Lack of access to banks and capital markets for the federal ban on cannabis hinders the sector's development. The bill was released by Parliament's Financial Services Committee prior to the meeting scheduled for Wednesday. Democrats are seeking other legislative measures in 2019 to promote the sector, including tax justice, medical access for veteran veterans, and removing current barriers to medical research, according to Marijuana Moment. If you missed it: Cannabis stocks fall on board after Aphria rejects the offer, CBD

Other replantations in the Canopy Growth Corp. sector

+ 2.50%

shares increased by 3.3%, Cronos Group Inc. CGC, + 3.48%

CRON, + 2.09%

CRON, CRON, + 2.83%

APHA, + 8.83%

APHA, + 7.64%

Shares were 8% higher and Tilray Inc.

TLRY, + 1.43%

is up 1.3%.

Hexo Corp.

HEXO, + 4.41%

HEXO, + 4.41%

rose by 4.9%, Aleafia Health Inc.

ALEF, + 9.39%

ALEF, + 9.39%

is up 9%.

ETFMG Alternative Harvest ETF

MJ, + 2,71%

is up 3% and Horizonte Marihuana Life Sciences ETF

HMMJ, + 2.63%

is up 3.2%.

Additional reporting by Max Chern

For the full scope of MarketWatch in the cannabis sector, click here.


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