Aurora Cannabis on the rebound after recent slumps

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Aurora Cannabis is rebuilding the organization and the results seem to be positive

It is time for the cannabis industry to present figures for last quarter’s numbers, and last Thursday, it was Aurora Cannabis releasing its figures for its fiscal Q2 2020. Even though the results are not the most positive to report, many positives can be extracted from these figures that can certainly benefit this marijuana stock later in the year. The company entered a revenue decline mostly due to a $10 million charge for returns and price adjustments, but now a more in-depth analysis points some good possibilities to consider.

The revenue declined sequentially another 26%, which represents $56 million. This number was particularly high due to the $10 million adjustments that had to be made. Another factor that affected the company’s revenue was a pause in the sales operations that were active in Germany, which led to a wholesale market low performance. It is a difficult decision, but it is also good to see a company in efforts of restructuring, and Aurora is working on reducing all operation costs for sales, general and administrative operations. The idea is that by the end of June this year, the expenses will be down by $40-45 million.

There is another positive that will bring benefits in the next months, starting with switching the productions to strains that are more in high demand as well as launching the Cannabis 2.0 edible products in December. During just the first week of sales, this line of products added $3.3 million in revenue, and, once the sales resume in Germany, Aurora could easily reach $62 million in earnings during this present quarter. It seems to be the company’s new strategy of targeting a more budget-dependent market is the right path to follow. This is also a good opportunity to expose this low-budget market to the high potency, but low costs, of its Daily Special brand, which can rapidly turn Aurora into a stock that it is worth investing in.