Which Company Will Become Profitable First: Canopy Growth or Aurora Cannabis?
Canadian cannabis companies Aurora Cannabis (NASDAQ: ACB) and Canopy Growth (NASDAQ: CGC) have been rivals even before the recreational market in Canada opened in 2018. While the companies are still trying to get bigger and generate more sales, growing competition has made it difficult to dominate in a saturated Canadian market. As a result, their shares are down 80% and 72%, respectively, this year.
The companies have shifted their focus toward profitability to give investors something positive to rally around. Both businesses aim to become profitable on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis -- but which one will get there first?
On Aug. 5, pot producer Canopy Growth released its first-quarter results for fiscal 2023. For the period ending June 30, the company reported that its net revenue of 110.1 million Canadian dollars was down 19% year over year. Its adjusted EBITDA loss also swelled to CA$74.8 million -- up from a negative CA$63.6 million in the prior-year period. The company blamed the worsening bottom line on a decline in gross margin, which it says was offset by a reduction in selling, general, and administrative expenses.
Source Fool.com
