Canada-based cannabis company Aurora Cannabis said that they produced more than 11,000 pounds of cannabis over the last twelve months, a 400% increase from the year before. The company also announced that revenue had jumped by 260% in the last year. Canadian-traded shares of Aurora have also nearly doubled over the last twelve months. The radical success of Aurora Cannabis is on par with other major cannabis companies in the wake of increased normalization of cannabis. Canada recently legalized recreational use nationwide and multiple other U.S. states have voted to legalize cannabis recently.
Tipping Point for Large Cannabis Businesses
Aurora Cannabis stocks, like other major cannabis companies Constellation and Tilray, are very hot among cannabis investors. CNBC reports that Aurora’s gross margin on cannabis rose “12% compared to the first quarter of 2019.” The rise in gross margin is due in large part to a hike in average selling price per gram of cannabis and an increase in the proportion of cannabis oil sales.
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Businesses like Aurora Cannabis will begin to see massive profit hikes and huge market-share increases as the normalization of cannabis continues to occur. Michigan recently became the first major Midwestern state to legalize recreational cannabis use while Missouri and Utah voted to legalize the medicinal use of cannabis. Though cannabis is still illegal federally in the United States, Michigan is now the 10th state to completely legalize cannabis. If this legalization trend continues, the federal government will have no choice but to rethink its antiquated drug policies. While Canada is still only a month into its recreational cannabis program, it is likely to be a huge economic success, with revenue projections in the billions.
Success of Cannabis Economics
The financial success of cannabis is likely the most important reason as to why federal and state governments are opening up to the idea of legalization. It remains to be seen just how far the sweeping normalization of cannabis will go. What is known though is that this trend will most likely continue for years and even decades to come.