Currently trading at $7.02, Canada-based cannabis operator Aurora Cannabis (NASDAQ:ACB) has been expanding its portfolio and making significant advances in the international medical business. However, the company has been struggling to generate revenue growth in the consumer cannabis market. In addition, since there are still substantial hurdles to federal-level legalization of cannabis, is ACB a risky bet now? Read more to find out.Based in Edmonton, Canada, Aurora Cannabis Inc. (ACB) is a vertically integrated producer and seller of medical cannabis worldwide. While ACB’s medical businesses in Canada and Europe delivered high revenues and growth in the third quarter of 2021, it suffered in other markets due to COVID-19 headwinds. Its consumer cannabis net revenue declined CAD20.5 million ($16.43 million) to CAD18.0 million ($14.43 million) from the prior-year period, due primarily to a reduction in orders with slower demand in the consumer cannabis market and a decrease in cannabis derivative sales.
ACB’s share price has slumped 15.5% so far this year and 22.4% over the past month. Closing yesterday’s trading session at $7.02, ACB’s stock is trading 63% below its 52-week high of $18.98, which it hit on February 10. Although the cannabis operator has been making substantial progress in diversifying its portfolio by launching new proprietary cultivars and expanding its footprint in the rapidly growing medical cannabis market in the U.K., it has been struggling to generate consistent revenue growth.
While investors remain optimistic about the positive momentum in legalizing cannabis at a federal level, uncertainty surrounding the Senate’s stance on the Cannabis Administration and Opportunity Act, which was introduced earlier last month, could lead to volatility in cannabis stocks in the coming months. So, ACB’s shares could retreat further in the near term.