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The Cannabis stock rally after the Aurora posts were the first quarter earnings of December



Cannabis stocks are higher across the board on Tuesday, while investors are catching the first weather earnings reports and a first look at the pottery bill that Democrats expect to pass in 2019 .

Aurora Cannabis Inc.

ACB, + 3.32%

ACB, + 3.37%

shares returns early trading losses to 3.7%, after the company said it almost quadrupled profits and gained strong market share in its second fiscal quarter, but also had major losses due to lowering marijuana-related equilibrium. Aurora has invested heavily in other companies in the sector and should monitor their performance as part of its revenue. Those adjustments provide about C $ 1

90 million ($ 143 million) of its losses and come after a selloff in the sector.

The figures reflect the first quarter since the launch of legal cannabis benefits in Canada in October, the first industrialized country to allow the sale of substance nourishment. Aurora said that C $ 21.6 million of its total sales of C $ 54.2 million came from Canada, which resulted in the deficiencies in the beginning of the new regime.

For more on Aurora, see: Aurora Cannabis revenues show great growth in pottery sales, but surprisingly profit

Supreme Cannabis Co. Inc.

Fire, -2.05%

SPRWF, -0.69%

shares will climb 1% after the company posted revenue for its second quarter of the financial year. The company had a net loss of C $ 1.55 million, or 1 cents a share, in its second quarter on December 31, more narrowly than C $ 2.03 million, or 1 cents on one side, posted on the previous year. Earnings rose to $ 7.72 million from $ 1.68 million.

The company can be extremely optimistic in estimating the cannabis plants before the sale, however. The prime said that changes in fair value in the growth of its biological assets have come to C $ 10 million, but the changed changes in fair value of inventory sold or with a disability are C $ 6 million. The inclusion of C $ 6 million to C $ 4 million of production costs exceeds the C $ 7.72 million revenue number.

Read now: Marijuana IPOs in 2019: These companies may be the next hot rice stocks

Under International Financial Reporting Standards, or IFRS, the standard Used in Canada, companies need to report the value of a biological asset at different stages of its development as a way to smooth revenue over time. For cannabis companies, this means that they should book the theoretical amount of the crop before they sell it, according to Mike Miller, director of finance at private-equity firm White Sheep Corp. If they end up selling it for less than the amount they have set it, they need to make arrangements in the next quarter.

"The cannabis market has seen massive volatility in prices, which makes it difficult to predict what the value of biological assets," he said. In the industry still in its infancy, there are no futures markets to help with pricing and many price estimates are based on medical electricity prices higher than the prices of retailers who can get for recreational cannabis, said he is.

"If this is 100% accurate, the amount of revenue should be equal to the cost of production and the adjustment and zero out. This will be an issue for many companies this period of income, and up to industry matures, "he said. [197909002] Read more about the topics: How to get marijuana companies without pottery

Cannabis earnings preview: Cannabis earnings: Can be drowned of the downturn of the pot stock Aurora and others in the red ink

Meanwhile, the leaders of the Democratic Democratic Congress issued a draft of a bill that would allow cannabis companies to put their profits on the bank, according to Marihuana Moment, a website working with activists, industry representatives and policy makers who are affecting cannabis.

The lack of access to banks – and capital markets-due to federal prohibit cannabis has been hampered by sector development. The bill was released by the Financial Services Committee before a meeting scheduled for Wednesday on the subject. Democrats are looking at other legislative measures in 2019 to promote the sector, including fair taxes, medical access for military veterans and the elimination of current medical research barriers, according to Marihuana Moment.

In case you missed it: Cannabis stocks fell across the board as Aphria rejected the bid, crackdown on CBD spreads

Elsewhere in the sector, Canopy Growth Corp.

CGC, + 3.82%

WEED, + 3.52%

shares reach 3.3%, Cronos Group Inc.

CRON, + 4.53%

CRON, + 4.02%

shares reach 3.4%,

APHA, + 8.83%

APHA, + 8.72%

shares are 8% higher and Tilray Inc.

TLRY, + 1.94%

has reached 2.6%.

Hexo Corp shares

HEXO, + 5.65%

HEXO, + 4.85%

is 4%, Aleafia Health Inc.

ALEF, + 9.86%

ALEF, + 9.86%

is up to 6%.

ETFMG Alternative Harvest ETF

MJ, + 3.13%

has reached 2.6% and the Horizons Marijuana Life Sciences ETF

HMMJ, + 3.49%

has reached 3.2%.

For all MarketWatch coverage in the cannabis sector, click here.


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