A Detailed Look at How Aurora Cannabis Generates Revenue
Over the next four years, there’s arguably no industry that’s expected to grow faster and more consistently on a global scale than the legal marijuana industry. Between 2018 and 2022, Arcview Market Research and BDS Analytics have called for a compound annual sales growth rate of 26.6%, leading to $31.3 billion in revenue by 2022.
Looking even further down the road, a handful of investment banks foresee global cannabis sales hitting $50 billion to $75 billion by the end of the next decade, with Jefferies issuing an optimistic outlook (albeit without a time frame) of $130 billion in annual sales. This would allow marijuana to potentially make double the soda industry in annual revenue.
Pot stock investors are enamored with Aurora Cannabis
This growth is a big reason why marijuana stocks have been so popular. Of course, no pot stock has been more popular or polarizing than Aurora Cannabis (NYSE:ACB), which is a favorite among millennial investors. When operating at full capacity, Aurora is very likely going to lead all growers in peak annual production, with yours truly forecasting 700,000 kilos a year, assuming ICC Labs’ existing projects in South America continue to be developed.
This is also a company that has managed to expand its operations, either through distribution or production, into 24 countries, which is far more than its peers. Moving into overseas markets might seem like no big deal for the time being, especially with growers struggling to meet the demand needs of the Canadian market, let alone international markets. However, when other growers are operating at peak capacity by 2021 or 2022, there’s a very good likelihood that we’ll see dried cannabis oversupplied and commoditized in the Canadian market. These overseas sales channels will ensure that Aurora Cannabis isn’t ransacked by a decline in domestic per-gram dried cannabis flower prices.
But what you may not realize about Aurora Cannabis is that is that its business model isn’t as cut-and-dried as you might think. In other words, it has a lot of ways, and geographic means, by which to generate revenue. Let’s take a closer look at the company’s fiscal second-quarter operating results to get a better idea of how all of these sales channels tie into…
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