As the Canadian cannabis market continues to fail to meet sales projections, the licensed producers (LPs) with the best balance sheets are poised to lead a market rebound. With both Aurora Cannabis and Tilray implementing restructurings, the industry could see a void in certain markets providing opportunities for companies with the ability to fund growth initiatives.
Based on the Aurora restructuring, the company is exiting several international markets along with shifting a focus to a value brand. Along with cutting cultivation goals from close to 700,000 kg to only 150,000 kg, the company plans to strip out over C$60 million in quarterly operating expenses. The disruption from removing so many expenses should leave some voids in the market allowing opportunistic moves by companies with the ability to continue investing.
In a smaller manner, Tilray is cutting 10% of their workforce. The company hasn’t detailed their plans regarding exiting any businesses, but a business the size of Tilray cutting 140 employees will leave an inevitable void. The move will allow a better funded business to capture more market share as the job functions of the exiting employees aren’t fully absorbed within the smaller workforce.
We’ve delved into these three Canadian companies poised to lead a market rebound as other companies restructure and focus on survival:
To find out which stocks, click on https://finance.yahoo.com/news/3-marijuana-stocks-poised-lead-194643265.html