Aurora was left red-faced after missing its own forecast and sales projections, which it had released only a month earlier. Aphria's market cap of $1.3 billion and Aurora's valuation of just over $1 billion would make the combined company significantly larger than the total value of the now-abandoned Harvest-Verano merger.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Aurora's total assets, excluding goodwill, total 2.3 billion Canadian dollars; that's more than the CA$1.9 billion that Aphria has after factoring out its goodwill.
Despite their historic difficulties in generating cash, paying off debts, and avoiding massive writedowns, Aphria (NASDAQ: APHA) and Aurora Cannabis (NYSE: ACB) could be poised to claim shares of the rapidly expanding marketplace. In second-quarter earnings, released Aug. 12 for the period ending June 30, the company said it planned to enter the Massachusetts market next year. Even if COVID-19 does materially affect Aphria's business, I'm confident that the company will be able to thrive. And during the second quarter, which ended June 30, revenue from the nationwide legal market finally finished ahead of the black market: That's the first time the licit market has come out on top since the Canadian government legalized marijuana in October 2018. Combined, the companies could be well on their way to hitting the CA$1 billion mark next year.
Such a move would create a definitive leader in the Canadian cannabis industry, accelerating Aphria's growth while providing Aurora with the financial stability it needs.
Martin has been Aurora's chief commercial officer since July, when he transferred over from Reliva, a company that makes hemp-based cannabidiol (CBD) products with a strong presence in the U.S. Reliva was acquired by Aurora in May. Better Marijuana Stock: Aphria vs. Aurora Cannabis. And once one deal happens, others could soon follow suit, as the arms race in the cannabis industry may get going again in a hurry. These are two of the largest cannabis companies in Canada with very different things to offer one another, and both of their shareholders would benefit. On Aug. 17, Curaleaf reported its second-quarter results for the same period; its pro forma revenue, including pending acquisitions, totaled $165.4 million. Whether you're a long-term investor or just risk-averse, Aphria is the better overall buy with stronger financials, a better track record, and worldwide hopes for its future. If another industry merger does come, it's likely to be much larger than that.
Cannabis legalization is sweeping over North America – 11 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. Many cannabis companies today are valued at more than $1 billion. @themotleyfool #stocks $ACB $CURLF $APHA $TCNNF $HRVSF, The High-Growth Industry Robinhood Investors Are Missing Out On, Why Aurora Cannabis Stock Is Sinking Today, The Scariest Number in Aurora Cannabis' Q4 Results, Why Aurora Cannabis Stock Is Flying High Today, Pot Stock Aurora Cannabis' 3 Biggest Question Marks, Copyright, Trademark and Patent Information. Gallery: 11 Best Value Stocks for This Overpriced Market (Kiplinger), Like us on Facebook to see similar stories, FDA requires stronger warning label for Xanax, Valium and other similar benzodiazepine drugs. building the future Aphria Inc. is setting the standard as a worldwide leader in the cannabis industry through a diversified approach to innovation, corporate citizenship, strategic partnerships and … Aurora will release its results for the fourth quarter ended June 30 on Sept. 22 -- and it will be a pivotal moment for the company. While nothing ended up materializing from those talks, I still wouldn't rule it out. Combined, that would put both companies at about $286 million in revenue; even with no further growth, they could reach the $1 billion mark in sales for a full year. But right now, there's no telling when that will be.
Investors may recall this period as one of embarrassment. While that was up from second-quarter revenue of CA$56 million, it was barely above first-quarter sales of CA$75.2 million. Market data powered by FactSet and Web Financial Group. In March, Harvest Health and Verano backed away from a deal that would've seen the two companies come together in the largest merger in the U.S. cannabis industry to date, valued at $850 million. In Canada, the need for cash flow and some long-term stability is what may drive Aurora to make a deal happen with Aphria or another large company. For Aphria, meanwhile, a merger would make the company a lot bigger a lot quicker. In a Sept. 8 update, Aurora announced that it expects Q4 net revenue to come in between CA$70 million and CA$72 -- well below Q3 numbers.