The coronavirus pandemic has wreaked havoc across the globe, and while some businesses are slowly returning to normal, most sectors have suffered huge losses.
Surprisingly, the marijuana sector isn’t one of them. The pandemic increased demand for both medical and recreational cannabis, and marijuana was declared an “essential item” during lockdowns. That boosted revenues for U.S. cannabis companies in particular.
Their Canadian counterparts also saw rising revenue numbers, but Canada is still challenged by a lack of legal stores, which has led to supply issues and increased competition from the black market. The most popular players, Canopy Growth (NASDAQ:CGC) and Aurora Cannabis (NYSE:ACB), had already seen a lot of damage in 2019; this year, both companies are making desperate attempts to recapture the market. Canopy, in particular — while it is struggling — has much brighter prospects than most of its peers. Its revenue is even growing, albeit not rapidly, and not enough to show (yet) on the bottom line.
But management at Canopy is making efforts to reduce costs and achieve profitability. The company has exited operations in South Africa and Lesotho and closed some facilities in Canada,…
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